Hungary: VAT changes 2017

7. March 2017

In the followings we would like to inform you about important changes which will be effective in the near future that affect every VAT taxpayer in Hungary.

Expected changes for Hungarian VAT

Unfortunately significant details of the regulations are not yet known, but generally the followings can be expected:

  • From 01.07.2017 taxpayers subject to Hungarian VAT shall provide data of invoices issued with an invoicing software with VAT content reaching or exceeding 100.000,- HUF (ca. 320 EUR) in real-time by the invoicing software to the tax authority in electronic way. In case such invoices are modified or cancelled, this shall also be reported in the same way. The exact form and requested data of reporting will be regulated by a legal provision to be published later.
  • From 01.07.2017 taxpayers subject to Hungarian VAT shall provide data of invoices issued by way of using a pre-printed invoice form with VAT content reaching or exceeding 100.000,- HUF (ca. 320 EUR) to the tax authority, per invoice, in the due VAT return. The tax number of the customer, the payable VAT amount and its tax base, the invoice number and the date of performance shall be reported per invoice.

According to the Hungarian law in force, no invoice can be issued in other way than the above presented two. Based on the new regulations, the Hungarian tax authority will be provided with quite accurate data within a short time regarding all invoices containing 100.000 HUF (ca. 320 EUR) payable tax.

Invoices in Hungary

In order that the tax authority can check the data of the payable VAT with regards to reclaimable VAT:

  • From 01.07.2017 taxpayers subject to Hungarian VAT shall provide data of incoming invoices with input tax content reaching or exceeding 100.000,- HUF (ca. 320 EUR) to the tax authority per invoice, in the due VAT return. The tax number of the supplier, the deductible VAT and its tax base, the invoice number and the date of performance shall be reported per invoice.
  • From 01.07.2017, in case the 100.000,- HUF (ca. 320 EUR) threshold is reached or exceeded based in a number of invoices from the same supplier within a given VAT-declaration period, then taxpayers subject to Hungarian VAT shall provide data to the tax authority regarding the supplier in the due VAT return. The tax number of the supplier and the deductible VAT shall be reported.

Modified or cancelled invoices shall also be reported in accordance with the above.

Administrative burdens for taxpayers

The above, particularly strict changes in the regulations lead to serious administrative and reconciliation burden for the invoice issuing taxpayers and their accountants. Problems might immediately arise in cases, when e.g. an invoice issued by an authorized person is immediately sent to the tax authority’s system in electronic way, therefore the tax authority “sees” all the taxpayer’s payable VAT of the given period, but from the whole set of invoices relating to the given period, the last few ones are accidentally delivered to the accountant at a later time, therefore these are not included in the VAT returns of the given period. The extremely low amount of threshold regarding data provision of incoming invoices will also impose serious administrative burdens.

In case the data provision liability is not fulfilled or is incorrectly fulfilled, significant amount of penalty will be imposed.

The aim of this document is to provide general information about the upcoming changes. In order to clarify what steps shall be taken so that your undertaking properly complies with the above changes, please contact our tax experts in Hungary individually.