As of 1 July 2018, it is obligatory to provide data of the invoices containing charged value added tax at least of HUF 100,000 (EUR 313) issued of the transactions between domestic taxpayers.

As of 1 July 2018, the data disclosure regarding the data of the invoices issued (and documents to be regarded as equivalent to invoice) shall be fulfilled after the issuance, within a short period of time, by electronic means. In case of invoicing with the use of billing/accounting software the invoice data shall be transmitted to the National Tax and Customs Administration (NTCA) without human intervention, via the public internet immediately, after the preparation of the invoice.

Data of the invoice shall be recorded on web interface in case of invoicing with the application of form, e.g. invoice pad (accordingly manual invoicing). The data report shall be fulfilled within five calendar days. This deadline
is shortened if the invoice contains charged tax of HUF 500,000 (EUR 1565) or more than this amount. The data of the invoice containing of HUF 500,000 or more charged tax shall be recorded on web interface on the day after the day on which the invoice was issued.

The data disclosure liability in principle is covered by such an invoice issued on the transactions between domestic taxpayers in which there is HUF 100,000 (EUR 313) or more charged tax.

The objective of the introduction of the online data report and of the establishment of the data management system is to further whiten the economy by discouraging tax frauds. This is complemented by the free online
invoicing function, as a service of the NTCA. With this development a large amount of invoice turnover become visible and traceable for the NTCA consequently the risk management can be more effective and the VAT revenues
can be significantly increased.

Within the system of online invoice

• real-time data on the issued invoices arrive to the NTCA,
• issued invoices can be queried by recipients of invoices and issuers of invoices as well,
• large amount of the invoice data is rapidly available for the purpose of effective risk analysis and audit which is assisting the detection of tax frauds,
• with the automation of the data report, the administrative burdens are reducing for users of billing/invoicing software,
• the new system substitutes the consolidated data report of issuers of invoices.

The basis of the solution is such a combined IT system which is able

• to receive and to control the invoice data that were sent in an electronic standard message as well as to confirm the sending, with the application of a system-system connection provided to taxpayers,
• to support manual recording of invoice data on a web portal,
• to trace economic activities and processes via the immediately available invoice data.

The online invoice assists the tax audit work of the NTCA, it makes the economic processes more transparent and broadens the group of the compliant taxpayers.

The obligation to supply data covers all taxpayers resident for tax purposes in the country. As such, all VAT registered taxpayers have to perform data-supply of their invoices with an output tax amount of least HUF 100,000
(EUR 313) issued to another resident taxpayer.

Pursuant to the VAT Act effective from 1 July 2018 concerning invoices made out with invoicing programs, electronic data supply must be made – as defined in separate law – of the changes where the tax charged to the other domestic taxpayer reaches or exceeds HUF 100,000 (EUR 313) after the change. In the case then, if the amount of tax charged in the invoice modified by a rectified invoice (i.e. the original invoice and its previous  rectified invoices) increases to or is higher than HUF 100,000, the rectified invoice is subject to reporting requirements (i.e. data supply).

There could be a question that will the issue of invoices by hand become forbidden in the case of invoices exceeding the tax amount threshold of HUF 100,000? Such a provision is not expectable. As of the 1st July 2018, data
disclosure must be provided on every invoice [issued to domestic (Hungarian) taxpayer], which contains charged (output) tax amounting to HUF 100,000 or even more, no matter how the production of invoice takes place.

In the case if the invoice issued to the other taxpayer, which contains at least output VAT of HUF 100,000, was produced as a handwritten invoice with the application of a form (for instance a block of invoices), the data
disclosure must be performed within 5 calendar days in such a way that data must be recorded on a dedicated website. However, if such an invoice contains output tax of HUF 500,000 (EUR 1565) or even more, the data
disclosure must be performed on the day following the day when the invoice was issued. If recording the data content of a handwritten invoice, which is prescribed by the VAT Act, on the dedicated website causes too
big administrative burden for the taxpayer it can be expedient for him to go for applying billing/ invoicing software.

It is not obligatory to perform an online data-supply on data of invoices issued by billing/invoicing software on tax exempted supply of goods to other Member States or third countries. The obligation of submitting recapitulative statements (Form ’A60) is not affected by introducing obligation of providing invoice data online.

It is expected that the recipient of invoice can also interrogate the data of those invoices also after 30 June 2018, on which the issuer of the invoice has performed a data disclosure. Availability of invoice data provided by
the issuer of the invoice can make easier for the recipient of the invoice to compile the itemized data disclosure (summary statement) on invoices, which has to be submitted in his VAT return. Furthermore, knowledge on
the invoice issuer partner’s practice and completeness (or incompleteness) of online supply of invoice data can also be suitable for judging business partner’s behaviour and reliability. With regard to all of these circumstances,
getting acquainted with invoice data provided by the invoice issuer is expedient even after 30 June 2018 as well; however, the recipient of invoices will not be obliged by legal rules to check the obligation of online supply of
invoice data to be performed by the issuer of invoice.

It must be noted that a default penalty for each invoice affected with failure may be imposed upon private individual taxpayers up to HUF 200,000 (EUR 625) and upon other taxpayers up to HUF 500,000 (EUR 1565) for
non-compliance with the obligation of data disclosure (or for its late, incomplete, erroneous performance as well as for perming data disclosure with false data).

In the event if the online program was unable to provide data by 1 July 2018, the NTCA did not fine when the data of the invoice arrived by the end of July 2018.

Contributed by
Andrea Kuntner, andrea.kuntner@vgd.hu
Julia Veress dr., julia.veress@vgd.hu
VGD Hungary