In order to increase the efficiency of tax inspections and to reduce the opportunities for tax evaders in Hungary, the Hungarian tax authority is introducing online data supply, as it can be read on various forums among recent Hungary-related tax news. Online invoice data reporting will start as of 1 July 2018.
The reporting obligation covers all taxpayers registered in Hungary (domestic and foreign). Accordingly, VAT-registered taxpayers also have to provide data on their invoices issued to another taxable person in case the VAT content of the invoice is at least HUF 100,000.
Conditions of online reporting are still not final and official communication on details is still awaited by taxpayers and experts. As per current plans, online data reporting has to be provided directly by way of the invoicing system or via a separate software linked to the invoicing system if operation and data supply is manageable automatically without any direct human assistance. Invoices have to be reported immediately after the invoice content is regarded as final. In the event of a documented system error, the issued invoice should be forwarded to the tax authority within 24 hours as per recent information.
Electronic data reporting will probably cover the mandatory data required under the Hungarian VAT Act. The invoice will be issued when the programme closes the necessary data and then it will be forwarded to the authorities online. After the submission, the taxpayer will receive a confirmation code for each invoice which should be assigned to the appropriate invoice. Current rumours say if any information is not correct or missing, there may be an opportunity to modify the reporting.
If the data reporting obligation is not met or late, incomplete or incorrect information is provided, a default penalty may be imposed for each invoice affected (the maximum default penalty for companies is HUF 500,000, approximately EUR 1,600). If the reporting obligation is not fulfilled by the issuer of the invoice, the customer’s right to tax deduction should not be affected in theory. However, parties have to prove that they acted with due care.
Since the beginning of July 2017, taxpayers have been able to manually test the development XML files that were created for Online Invoice reporting purposes in the KOBAK system (External Online Submission and Reporting Framework). During the introduction phase, we highly recommend checking the operating data-export function of the invoicing software, the proper working of which should be considered a prerequisite for the online invoice reporting.
We will inform our clients of further news as soon as any official information from the tax authorities or draft decree is published.