Hungary Adopts Real-Time Reporting Regulations

Steve Sprague
April 4, 2017

Hungary’s tax authority announced in late 2016 that it would implement mandated real-time reporting starting July 1, 2017. As that date draws near, one certainty exists – companies with VAT liability in Hungary need to prepare now so they can nimbly adapt to new process and reporting requirements.

As European governments trend toward electronic invoicing mandates to gain visibility into corporate tax liability, all eyes are watching Hungary. The NAV, Hungary’s tax authority, announced in late 2016 that it would implement mandated real-time reporting starting July 1, 2017. As that date draws near, technical specifications for the program have yet to be released, but one certainty exists – companies with VAT liability in Hungary need to prepare now so they can nimbly adapt to new process and reporting requirements.

What we do know about this program from Hungary’s initial announcement is that business-to-business transactions in which VAT of at least HUF100,000 (approximately €320) is charged will be impacted. Hungarian businesses, as well as foreign entities that are VAT registered in Hungary, must comply with the legislation. These taxpayers will be required to have a direct data connection from their ERP to the NAV, as they must report sales invoice data in real time. It is likely that Hungary will require businesses to submit e-invoices to the NAV for approval before issuing the final invoice with a verification ID.

We also know that the penalties associated with errors are going to be stiff. Failure to adequately comply with the legislation may result in a fine of up to HUF500,000 (approximately €1,700) per invoice, the loss of “trusted” taxpayer qualification and/or even the Authorized Economic Operator (AEO) classification – which would cause a severe disruption to business processes.

Hungary, like many countries throughout the E.U., has been inching toward this legislation for a few years now. It began by placing requirements on the invoicing software that Hungarian businesses use, most recently requiring the ability to export data both by invoice issue date and by invoice number. The goal of these requirements, of course, was to make it easier for the government to gain access to tax liability details in addition to its regularly required tax reports.

As this new real-time reporting compliance mandate in Hungary looms, businesses are relying on Sovos’ depth and breadth of experience in VAT reporting and determination, e-invoicing and fiscal reporting to maintain compliance around the globe.

Take Action

Stay tuned to our blog as details about Hungary’s legislation emerge and to learn about our pilot program. Contact us with any questions.

Sign up for Email Updates

Stay up to date with the latest tax and compliance updates that may impact your business.

Author

Steve Sprague

Como director comercial, Steve Sprague dirige la estrategia corporativa, las iniciativas de penetración de mercado y de field enablement para el negocio del impuesto sobre el valor añadido global (GVAT) de la empresa. El estilo de liderazgo de Steve se basa en su convicción de que, para que las organizaciones tengan éxito, deben comprometerse e invertir en los tres pilares estratégicos de la empresa: las personas, las prácticas y los productos.
Share This Post

North America ShipCompliant
May 25, 2023
Out-of-State Breweries Gain Self Distribution, DtC Rights in Oregon

Under a settlement agreement, breweries located outside of Oregon now have more options for selling into the Beaver State, including direct-to-consumer (DtC) shipping and self-distribution to retailers. The settlement arose out of a lawsuit filed by a group of Washington breweries last year challenging Oregon laws that limited beer self-distribution to in-state breweries and DtC […]

EMEA VAT & Fiscal Reporting
May 24, 2023
VAT and Art: What you need to know

Significant inflation increases have impacted most of the world’s economies, with the UK still above 10% in 2023. This increase means a reduction in the purchasing power of consumers. Together with increases in the cost of raw materials, this has created uncertainty regarding growth of entire industrial departments and reduced profit margins for companies. The […]

North America ShipCompliant
May 23, 2023
Top 5 Myths Surrounding Retailer Direct-to-Consumer Wine Shipping

By Tom Wark, Executive Director, National Association of Wine Retailers Politics breed myths. This has always been the case as politics is, at its most fundamental, a form of storytelling. So it should be no surprise that myths have arisen as various elements of the wine industry have fought against consumers and specialty wine retailer seeking […]

EMEA IPT
May 23, 2023
IPT: Location of Risk and Territoriality

Much of the discussion on the Location of Risk triggering a country’s entitlement to levy insurance premium tax (IPT) and parafiscal charges focuses on the rules for different types of insurance. European Union (EU) Directive 2009/138/EC (Solvency II) set out these rules. However, a related topic of growing importance in this area concerns territoriality, i.e. […]

Asia Pacific E-Invoicing Compliance
May 23, 2023
Japan: New e-Invoice Retention Requirements

Japan’s new e-invoice retention requirements are part of the country’s latest Electronic Record Retention Law (ERRL) reform. Along with measures such as the Qualified Invoice System (QIS) and the possibility to issue and send invoices electronically via PEPPOL, Japan is implementing different indirect tax control measures, seeking to reduce tax evasion and promote digital transformation. […]