eInvoicing in Hungary

Legislation

According to section 174 of the Act CXXVII of 2007 on Value Added Tax, an invoice may be printed on paper or issued electronically.

Section 175 of the aforementioned Act lays down the rules related to electronic invoicing (eInvoicing). According to this section, contracting authorities should accept eInvoices if the authenticity of the origin of the eInvoice and the integrity of its content are guaranteed.

Economic operators can ensure these requirements by using an electronic signature and time stamps or by making eInvoices available through Electronic Data Interchange (EDI) systems.

On 1 July 2018, the Hungarian real-time invoice reporting (RTIR) obligation came into force (Act LXXXIII of 2018 amending Act CXLIII of 2015 on public procurement) for domestic eInvoices (and later amended in 2021 to include intra-community transactions).  The 2018 obligation requires any taxpayer to register for VAT purposes in Hungary (issuing an invoice with a VAT amount greater than or equal to HUF 100,000) to report the eInvoice data immediately and without human intervention to the Hungarian tax authority (NAV). The new live reporting scheme replaces the existing domestic sales ledger listing, which is filed monthly with the VAT return. This obligation requires companies to adapt their invoicing processes and Enterprise Resource Planning (ERP) systems in order to produce the XML file that must be transmitted to the Hungarian tax authorities’ website without human intervention.

From 1 January 2021, all B2B and B2C transactions must be reported to Hungarian tax authorities in real-time, regardless of the transaction amount. The following changes to the Hungarian law on electronic invoicing (Act LXXXIII of 2018) regarding mandatory online transaction reporting are applicable:

1. The range of invoices subject to the reporting obligation has been extended to include invoices issued for domestic B2C transactions in addition to B2G and B2B invoices relating to intra-community supplies and exports[1].
2. The NAV introduced the “NAV Online 3.0”, a version of the Hungarian online invoice reporting system. Instead of sending an invoice to customers (either in hardcopy form or as a PDF invoice via e-mail) and simultaneously reporting the data to the tax authorities (this procedure remains in place), companies can exclusively report the XML file to NAV, which is then made available to customers as an electronic invoice. This version of the NAV became mandatory from 1 June 2021.
3. Effective March 31, 2022, the NAV updated the System User Manual, the Program User Manual, and the Application User Manual of the Online Invoicing tool to version 3.17. The updates include error validations as well as limitations on the browser that can be used to navigate the program. The NAV further updated the API technical documentation for the e-invoicing system to version 3.0 to introduce error warnings and validations.
4. On November 2, 2022, the NAV released version 3.2 of the electronic invoice system, which amends the following:
1. the technical cancellation via the machine interface of invoice data recorded on the web interface;
2. the automatic rejection of technical cancellations after a 30 days period;
3. the technical cancellation of invoices made in the Online Invoice system; and
4. the requirement to display personal data of primary users so that the system will no longer show personal data such as name at birth, date of birth, mother's name etc.

eInvoicing platform and management solutions

The Hungarian Tax Authority has a centralised real-time invoice reporting (RTIR) model. Initially introduced in July 2018, the anti-VAT fraud measure requires that all invoices be reported to authorities live and by electronic means.  

Those affected by the law in Hungary are:

• Non VAT liable persons or organisations;
• Foreign VAT liable persons;
• Foreign companies with VAT registration in Hungary (Kelemen, 2021).

The Hungarian tax authorities clarified that foreign distance sellers that are not established in Hungary and planning on joining the OSS regime in July 2021 will be exempt from the RTIR obligation.

As of June 2021, National Tax and Customs Administration of Hungary[2] it is mandatory for all taxpayers to use the NAV Online Invoicing System to submit their invoice data. This includes the following:

• The customer info field is adapted to allow for differentiation between invoices sent to Hungary, EU, or non-EU countries.
• It is no longer possible to provide the Hungarian, European, and non-European VAT IDs together. Only one may be used.
• B2C invoices must not contain personal data (neither name nor address).

Using a technology provider, the exported data from the Enterprise Resource Planning (ERP) system will be treated and transformed to the required format by the NAV, in accordance with the requirements specified by the NAV. 

More technical information on the NAV Online Invoicing System can be found on the NAV website, along with the technical information of the currently supported version.

Approach for receiving and processing

Hungary has a single centralised platform at the national level via NAV. Regarding the approach for receiving and processing eInvoices, sub-central contracting authorities and economic operators should decide on the solution to use in a prior written agreement with a detailed technical description of EDI data, system and format to use. In addition, economic operators should ensure that a summary document is sent to the contracting authority reporting on the eInvoices issued during the given month. 

eInvoicing implementation in sub-central level contracting authorities 

Each contracting authority and economic operator should agree on the solution to use to ensure the eInvoicing exchanges via NAV. This must be previously agreed upon between both parties. The buyer’s consent may be made in writing, orally, or by implied conduct. The supplier is always responsible for fulfilling the obligation of invoice issuance and must meet the e-invoice archiving compliance rules.

Status on the implementation of the European Standard on eInvoicing (EN)

The format required for sending eInvoice data is XML and fully compliant with the European Standard. 

Additionally, businesses should have their systems ready to send standard audit files (SAF) when required by the tax authority. This information will include (i) general accounting, customers, suppliers and VAT, (ii) accounts receivable and (iii) accounts payable data.

Digital reporting requirements 

In Hungary, since 2021 the XML file submitted to comply with the real-time reporting obligations can be delivered by the tax authority to the customer and used as an e-invoice. To this end, the issuers must indicate that it is an eInvoice, generate a hash value from the invoice data and insert it into the XML file. In addition to the data mandatory for Real-Time Information Reporting (RTIR) system, all data required for invoices must be included into the XML file.

The RTIR system was introduced as of January 2016 and applies to all businesses registered in Hungary for VAT purposes. The obligation to comply with RTIR applies to all businesses registered in Hungary for VAT purposes, including non-resident ones, for transactions whose place of supply is Hungary. Initially, only invoice data of B2B and B2G domestic sales above HUF 100 000 (about EUR 300) had to be reported. Over time, however, the RTIR scope has been widened: first, the threshold on domestic transactions was removed starting from July 2020; then, from January 2021 invoice data for intra-Community transactions, exports and B2C transactions must also be submitted. Before the introduction of the RTIR, a periodic VAT reporting obligation applied to the submission of the domestic transaction statements jointly with the VAT return. This reporting requirement only covered high value transactions, with a value of the invoice of at least EUR 6 500. In 2015 the threshold was lowered to EUR 3 250 and the requirement was then replaced by the RTIR. Information must be reported on a transaction-by-transaction basis, when the invoice is issued (or within 24 hours at the latest). Data must be submitted using the XML format through the tax authority’s portal. Submissions must be fully automated over the internet from accounting, ERP or billing systems, without manual intervention.

Additional information

Hungary’s eInvoicing regulations are part of the country’s efforts to reduce its large VAT Gap and ensure collection of indirect taxes. As reported in 2018, these efforts have reduced the country’s VAT gap by 10.7% since 2013, with a bigger reduction anticipated now that eInvoicing is in place.

These latest eInvoicing changes linked to VAT purposes aim at enabling the Tax Authority to prepare and propose draft VAT returns to taxpayers from the 12th day of the month following the tax assessment period. This will be available based on VAT data for July 2021. 

[1] (Duarte, 2020), [2] (NAV - the Nemzeti Adó- és Vámhivatal (HU TA), in Hungarian), 

Last updated:  Jun 12, 2024 20:38