The Final Countdown to Hungarian Real-Time Reporting?

Sovos
April 27, 2017

[UPDATE – June 2017]
The likely decision to postpone the implementation of changes in VAT reporting has now finally been announced. Hungary has now postponed the entry into force of this requirement by one year until July 2018 for two reasons:

  1. To actually get the technical specification published well in advance
  2. To give taxpayers and service providers some time to implement and test their solutions

Original post
Last year the Hungarian government announced changes in regards to VAT reporting: as of 1 July 2017 it will be mandatory for taxpayers to electronically report data in real-time regarding supplies of domestic B2B sales for which the VAT reaches or exceeds HUF 100,000 (corresponding to roughly 320 EUR). When considering developments previously reported in this forum in other countries (Italy, Poland, Spain), we’re spotting an EU-trend.

This reporting requirement builds upon the existing ‘data export functionality’, which has been mandatory for invoicing systems in Hungary since 2016, but takes it one step further by requiring the data to be reported in real-time to the tax authority. Similar to the data export functionality, the real-time reporting is expected to be handled by the ‘invoicing system’, which is the system that should also perform the sequential numbering – likely the service provider’s system in many outsourced scenarios.

The implementing legislation with technical specifications around this requirement was supposed to have been introduced already but has been delayed, which leaves many fundamental questions unanswered and not much time for taxpayers to prepare before the entry into force. One of the most relevant questions concerns the definition of ‘real-time reporting’; have the Hungarians glanced at Clearance countries and truly require the data to be reported in real time at the time of issuance? Or does real time in this context instead mean reporting the VAT data after the issuance but with a very short deadline?

Without further clarifications from the authorities, all discussions on the topic remain speculative, but there’s good reason to believe that the entry into force of the reporting requirement will be postponed – or at least ought to be.

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Author

Sovos

Sovos is a global provider of tax, compliance and trust solutions and services that enable businesses to navigate an increasingly regulated world with true confidence. Purpose-built for always-on compliance capabilities, our scalable IT-driven solutions meet the demands of an evolving and complex global regulatory landscape. Sovos’ cloud-based software platform provides an unparalleled level of integration with business applications and government compliance processes. More than 100,000 customers in 100+ countries – including half the Fortune 500 – trust Sovos for their compliance needs. Sovos annually processes more than three billion transactions across 19,000 global tax jurisdictions. Bolstered by a robust partner program more than 400 strong, Sovos brings to bear an unrivaled global network for companies across industries and geographies. Founded in 1979, Sovos has operations across the Americas and Europe, and is owned by Hg and TA Associates.
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