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Tax Alert

Tax Alert

Grace period regarding new requirements for online reporting

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Online data provision: increasing requirements, grace period

According to the changes effective from 1 July 2020 on, all invoices issued to domestic taxpayers must be reported online to the Tax Authority, thus the current reporting threshold of HUF 100,000 will cease.

However, according to a statement by State Secretary Norbert Izer published on 2 June, the Tax Authority will not levy penalties on taxpayers who are not capable of meeting the new reporting requirements until 30 September 2020. Those previously not obligated to provide such data should register in the Authority's official online reporting system before the issuance of the first invoice after 1 July in order to be eligible for the penalty exemption.

We also note that relief from penalties would only apply to new requirements coming into force from 1 July, therefore in case of non-compliance regarding invoices above the HUF 100,000 threshold, the Tax Authority may still fine taxpayers.

It is important to note that not only the online reporting liabilities of taxpayers will increase significantly, but also the number of items to be included in VAT returns' domestic purchase lists. The penalty exemption set out by Mr. Izer in his statement presumably will not apply to domestic purchase lists, therefore it is recommended to pay special attention to making sure such declarations are completed accurately due to the increased obligations.

Online reporting 2.0

As we have informed you previously, the government originally set the introduction of version 2.0 of the Tax Authority's online reporting system for 1 April 2020; however, given the current pandemic situation, the application of the new version will become mandatory only from 1 July 2020 on. It is important to emphasize that from that exact date, data provided based on the previous version will no longer be accepted by the Tax Authority’s system.

Please read our summary on the version 2.0 changes here

KPMG's VAT technology solutions provide effective assistance in online reporting and in the fulfilment of VAT compliance obligations. Please learn more about our solutions by clicking here

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