When New York first passed its law defining what constitutes a “vendor” subject to collecting sales tax in the 1980’s, the idea of online shopping sounded like science fiction. In retrospect, NY may have effectively enacted the first “economic nexus” law when they drafted their definition of “vendor” to include a person who regularly or […]
Hungary VAT Reporting Is Here: Are You Ready?
In June of this year, the Hungary VAT Reporting requirement went into effect. The country’s approach is unlike most other reporting mandates found throughout the world, as it is based on invoice amount – not company size.
All companies that make business-to-business transactions in Hungary are impacted.
With this requirement now live, companies operating in Hungary need to make sure they comply not only with the current regulation, but also with potential future updates and a wave of similar requirements rolling out throughout the world.
Hungary VAT Reporting is here. Is Your Company Ready?
- Does your VAT compliance process eliminate manual, human intervention? If not, it is in violation of Hungary’s law, which mandates that submissions be automatically triggered and that invoices cannot be amended or corrected.
- Are all your invoices submitted to Hungary’s tax authority within 24-hours of issuance? That’s the time frame mandated by the NAV, and late transmissions may incur a penalty of up to 500,000 HUF.
- Does your solution deliver seamless, automatic updates in the event of a regulation change? Spain introduced real-time VAT reporting in 2017, and its requirements have already undergone several major updates. Change management is the name of the game when it comes to VAT reporting, and companies must be prepared to constantly monitor such changes and update their systems accordingly.
- Is your ERP your centralised source of truth? VAT reporting done right requires a central system of record in order to have a bulletproof audit defense trail, which means compliance should be maintained within your ERP. No data should be housed or amended outside of this system.
- Is your data secure? Critical customer and company data is exchanged during real-time reporting. Data should be encrypted not only in transit to the tax authority, but also within the solution during data extraction and manipulation.
- Do you have an archiving system? The NAV requires invoices to be stored for eight years, and your archiving method should maintain the integrity of invoices to ensure no manipulation can occur.
- Is your data automatically verified? Your VAT compliance solution should automatically map data to the appropriate government-mandated XML field, analyse and validate data inputs, provide error reports and reconcile data with VAT forms. Only by automating this process can you ensure accuracy and full compliance.
If you answered no to even one of these questions, you are at an increased risk of audits, fines and penalties. Sovos ticks each of these boxes, and more, with our Intelligent Compliance solution. Contact us to evaluate your current risk and safeguard your business in Hungary and beyond.
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