As you may know, Hungary plans to introduce a real-time invoice reporting obligation from 1 July 2018. Any Hungarian VAT registered entity that issues invoices with a VAT amount above HUF 100,000 (approx. EUR 320) to another entity VAT registered in Hungary will be required to report these invoices “without delay to the Hungarian Tax Authority (HU TA). This includes businesses established outside Hungary but registered for VAT in Hungary. Failure to report the invoices in real time mode may attract an administrative penalty of up to HUF 500,000 (EUR 1700) / invoice.
Newest developments in real-time invoice reporting
The Hungarian Tax Authority has published the draft of the implementing regulation and the specification of the RTIR.
What has changed (compared to the previous draft):
What is the legislative background?
The legislation (and the draft implementing regulation) seemed to be final, although not formally published as final. Some of the provisions of the RTIR can be found in the draft VAT Act, while other provisions are in the draft of the Implementation Regulation of the Ministry of the National Affairs.
The technical specification can be found in a separate Guidance issued by the HU TA.
Who is affected by the real-time invoice reporting?
Any Hungarian VAT registered entity that issues invoices another VAT registered entity with a VAT amount above HUF 100,000 (approx. EUR 320) is affected by the real-time invoicing obligation. This includes businesses established outside Hungary but registered for VAT in Hungary. RITR is not applicable to B2C supplies (distance sellers).
What invoices are affected by RTIR?
Not all invoices are affected by RTIR. Businesses may wish to filter out invoices that are not affected by RTIR. The affected invoices are:
What about modification invoices (debit notes, credit notes, cancellation invoices)?
What about paper-based invoices?
RTIR is extended to hand-written paper-based invoices issued from the pre-printed invoice paper forms. Hand-written paper-based invoices need to be reported electronically
While the hand-written paper-based invoices from the pre-printed invoice form are considered an old-fashioned way of issuing invoices, it is still used in some sectors. Its use is rare in B2B cases, especially in transactions with VAT value of more than HUF 100,000. The main purpose of this regulation is to discourage taxpayers to use this type of invoicing as means to avoid RTIR on the invoices issued by the invoicing software.
Why RITR needs to be taken seriously/sanctions?
The potential maximum penalty for non-compliance with RTIR is much higher than the maximum penalty for failure to submit VAT return/Intrastat/ESPL together. Failure to report the invoices in real time mode may attract an administrative penalty of up to HUF 500,000 (EUR 1700) per invoice. This means that affected businesses must make complying with the RTIR legislation its highest priority.
Does the new requirement change the layout of the invoice?
No, the layout and the minimal requirement regarding the information that needs to be on the invoice do not change. What changes is the way businesses need to collect and store invoicing data about their transactions as well as how to report this data.
How this affects domestic itemized report (recapitulative statement)?
Itemized reports will continue to be filed on the purchase invoices involved. RTIR will replace itemized reporting only for sales transactions.
What does this mean potentially to business entities?
Companies will need to acquire/adapt invoicing software which is capable of real-time data transfer by 1st of July 2018 at the latest.
For more information on the legislative background and potential IT solutions please contact Daniel Sztanko (email@example.com).
Disclaimer: The information contained in the present page is general and does not constitute legal advice. Before taking any decision or action on the above information you should take the appropriate professional advice.