Hungary has been a pioneer in Continuous Transaction Controls (CTC) approach in the EU

RTIR Hungary

In 2018, Hungary established a legal framework requiring taxpayers to use a designed schema to report invoice data to the tax authority (NAV) in real-time for domestic transactions above a minimum VAT amount.

Due to the success of this measure, the scope of the mandate has been extended to include a wider range of transactions, and the earlier thresholds have been abolished. The impact of the mandate is now broadly felt in Hungary where all transactions between domestic taxable persons must be reported to the NAV, regardless of the amount of VAT accounted.

In addition, Hungary has also published draft SAF-T regulations and documents for comments by taxable persons. It is expected that the new SAF-T will enter into force in late 2021 / 2022.

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Mandate quick facts

  • Immediate disclosure of data from all invoices issued under the scope of the mandate.
  • Once an e-invoice is issued, transmission of data must occur automatically using a machine-to-machine interface and must be done without human intervention
  • The transmission must include identification data and the obligatory data content as required under the Hungarian VAT Act.
  • VAT returns are filed monthly or quarterly and are due on the twentieth of the month after the end of the tax period.
  • The VAT return contains several appendices requiring additional information on transactions such as supplies of new means of transport and metals subject to the domestic reverse charge.
  • Alongside the VAT return, taxpayers must submit a summary report on all domestic purchases for which they’re claiming an input tax deduction.

Mandate rollout dates

  • 1 July 2018: Mandate applies to all taxable persons to report invoice data in real-time to the National Custom and Tax administration of Hungary for domestic transactions with a minimum VAT amount of 100,000 HUF.

  • 1 July 2020: The VAT threshold was abolished and all domestic transactions between taxable persons in Hungary must be reported regardless of the VAT accounted.

  • 1 January 2021: Reporting obligations include B2C invoice issue and B2B intra-community supplies and exports.

  • 1 January- 31 March 2021: The Ministry of Finance granted a sanction-free three-month grace period to comply with new reporting obligations and to give businesses time to transfer from the current version (v 2.0 XSD) to the new version v3.0 XSD.

  • 1 April 2021: Mandatory usage of the new version (v3.0 XSD) begins.

Penalties

  • Failure to report the invoices in real-time could lead to an administrative penalty of up to 500,000 HUF per invoice not reported.

  • Additional penalties would apply for non-compliance with the invoicing software requirements.

Sovos helps companies stay compliant with Hungary Real Time Reporting Requirements

As Hungary edges ever closer to CTC e-invoicing invoice clearance, Sovos enables businesses to stay up to date with the latest requirements and technical specifications so they can effectively connect with the NAV and honour their VAT compliance obligations.