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 also introduced a “NAV Online 3.0”, an updated version of the Hungarian online invoice reporting system. Now, 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 new version of the NAV became mandatory from 1 April 2021.[2]

eInvoicing platform and management solutions

The Hungarian Tax Authority has released an updated version of its 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 April 2021, National Tax and Customs Administration of Hungary [3] it is mandatory for all taxpayers to use the new “NAV Online 3.0” system to submit their invoice data. This new version of the VAT declaration includes the following changes:

• 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) [4].

In addition to this update, the Request Tracker for Incident Response (RTIR - “Online Számla”) fiscal calendar has also been adjusted:

• The version 3.0 of the NAV system has been available since 1 January 2021, following a test phase that started in October 2020.
• The version 2.0 was accepted until 31 March 2021 (“grace period”).
• As of 1 April 2021, the NAV system are no longer accept data created in version 2.0.

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.

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.

Monitoring eInvoicing implementation 

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. (WTS global, 2021)

With the changes brought to Hungary’s eInvoicing law in 2021 (Act LXXXIII of 2018), the Hungarian Government has taken a significant step forward on the path to invoicing digitisation. A possible next step could be the adoption of a mandatory CTC model inspired by Italy. However, the Hungarian Government would first need to obtain the EU Council’s authorization to introduce a special measure derogating rules from the EU VAT Directive. [1] 

[1] (Duarte, 2020), [2] (Killinger, 2020), [3] (NAV - the Nemzeti Adó- és Vámhivatal (HU TA), in Hungarian), [4] (Edicom group, 2020)

Last updated:  Jun 29, 2021 12:44