As of 1 July 2020, a number of legal changes have become effective in Hungary that alter the day-to-day reporting obligations of companies doing business in Hungary. The most important changes are the following:
Online reporting of invoices for all domestic sales of goods and provision of services: As of 1 July 2020, all invoices issued with regards the Hungarian domestic sales of goods or the performance of services towards Hungarian taxable persons are to be reported to the Hungarian Tax Authority electronically. Before 1 July this obligation only covered those invoices that included more than HUF 100 thousand output VAT. The new obligation covers not only invoices with output VAT but also those that are issued without VAT, e.g. transactions subject to reverse charge or VAT exempt transactions. If an advance payment was received before the performance date, the advance payment invoice needs to be reported too; the final invoice should be reported in the amount reduced by the advance payment.
With regard to printed paper invoices, if the VAT content is less than HUF 500 thousand, then the deadline of the electronic reporting of such invoices is 4 calendar days (previously it was 5 calendar days). If the VAT content is HUF 500 thousand or more, then the reporting deadline remains 1 day.
As a transitional rule, invoices issued before 1 July were to be reported according to the previous rules (which were in force until 30 June), regardless of the date of performance.
Buyer’s tax number to be indicated on all invoices: In the case of transactions between vendors who have a Hungarian VAT number and Hungarian domestic taxable persons, the buyer’s Hungarian VAT number (its first 8 digits) should be indicated in the invoice. As a transitional rule, the input VAT may be deducted for invoices issued before 1 July on acquisitions that were performed later, even if the buyer’s VAT number was not indicated in the invoice.
8 days to issue invoices: Invoices are to be issued within 8 days following the performance date (previously, the deadline was 15 days).
More incoming invoices need to be reported in the domestic summary report: Incoming invoices should be reported individually in the domestic summary reports as part of the VAT return, regardless of the amount of their input VAT content. Previously, only the incoming domestic invoices with an input VAT content of at least HUF 100 thousand needed to be reported in this way. However, the new extended reporting obligation covers only those invoices that include deductible input VAT, thus, transactions without VAT, or those that include non-deductible VAT need not be reported. As a transitional rule, in the domestic summary report the invoices had to be reported based on the previous HUF 100 thousand threshold if the right to deduct VAT was exercised before July 1.
We will address some practical questions connected to the recent legislative changes in our next tax newsletter.