Changes to EKAER and invoice reporting regulations form 2021

Changes to EKAER and invoice reporting regulations form

As anticipated in our previous Tax Alerts, the extent of obligations in regards of EKAER, the Electronic Trade and Transport Control System, starting from the beginning of the year have been reduced. Meanwhile, almost all invoices issued under a Hungarian VAT number trigger a real-time reporting obligation.

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EKAER

The Ministry of Finance published Decree no.13/2020. (XII. 23) on new regulation of EKAER on 23 December 2020. The Decree entered into force on 1 January 2021. Notable changes:

  • EKAER registration obligation remains applicable only for former high-risk products. Relevant product categories are defined by NGM Decree no. 51/2014. (XII. 31.).
  • The registration obligation applies to all carriage of goods on public roads above a threshold of 500 kg or whose value exceeds HUF 1 million.
  • Based on the new decree, guarantees shall no longer be provided for products subject to 5% VAT.
  • In parallel with the new decree, changes to Act CL of 2017 on the Rules of Taxation regarding penalties, approved last autumn, have entered into force on 1 January 2021. Based on the amended regulations, the Tax Authority may only apply a penalty of up to 40% of the value of the consignment for failing to register. Improper EKAER registration is subject to a default penalty of up to HUF 500,000 (for taxpayers).

Real-time reporting

Based on the new rules, the real-time reporting obligation covers almost all invoices issued under a Hungarian VAT number, including invoices issued to non-taxable persons (e.g. private individuals) and invoices for Intra-Community and export supplies. The guideline, recently published by the Tax Authority, highlights the transactions which follow.

Those to be reported:

  • Intra-Community supply of goods;
  • Distance sales from Hungary to another member state, provided that they are subject to VAT in Hungary and the person liable for VAT has not registered on the One-Stop-Shop system;
  • Distance sales from another member state to Hungary, provided that they are subject to VAT in Hungary and the person liable for VAT has not registered on the One-Stop-Shop system;
  • Supply of goods or services by a Hungarian taxable person with a place of supply in another member state subject to the reverse-charge mechanism, excluding cases when the invoice is issued by the customer, based on a self-billing agreement;
  • Supply of goods or services by a Hungarian taxable person with a place of supply outside of the EU (irrespective of whether self-billing is applied or not);
  • Domestic supply of goods or services by a non-Hungarian taxable person if the transaction is not subject to the reverse-charge mechanism.

Non-reportable transactions:

  • Intra-Community supply of goods and import with a place of supply in Hungary;
  • Domestic supply of goods or services by a non-Hungarian taxable person if the transaction is subject to the reverse-charge mechanism;
  • Distance sales if the person liable for VAT, registered on the One-Stop-Shop system, in line with the harmonized EU regulations, or the VAT liability arises in a member state other than Hungary;
  • Supply of goods or services by a Hungarian taxable person with a place of supply in another member state, provided that the transaction is subject to the reverse-charge mechanism and the parties apply self-billing;
  • Proof of purchase subject to flat-rate compensation in the agricultural sector.

The scope of reportable data is generally in accordance with the mandatory content of invoices, as set out according to the Hungarian VAT Act. However, in certain cases additional data are required by law. For example, where the invoice amount is expressed in a currency other than HUF, the currency and the applicable exchange rate are to be reported as well. If the invoiced transaction falls out of territorial scope of the Hungarian VAT Act, this is also considered reportable information.

At non-taxable private individual customers, the data reported is not required to contain the name and address of the customer. If there is doubt regarding the customer's status as a taxable person, this can be verified by a declaration issued by the customer. 

The reporting of the data of a final invoice (after advance payment) must include the difference between the advance payment and the total amount as well. This obligation also applies to the recipient of invoices in their domestic sales listing (as a part of the VAT returns).

The Tax Authority provides a grace period, from 4 January 2021 to 31 March 2021, and does not levy penalties if the taxable person fails to meet the newly-introduced reporting requirements. Please note that the grace period applies on condition that the taxable person register themselves in the real-time reporting system.

Other rules on invoicing reporting

Invoicing decree [Decree no. 23/2014. (VI. 30.) NGM] was also amended with an effective date of 4 January 2021.

One of the changes therein aims to support e-invoicing by introducing an option that enables taxpayers to fulfil their real-time reporting obligation by sending e-invoices to their (taxable) customers with a hash code via the Tax Authority's real-time reporting system.

In connection with the extension of real-time reporting, taxable persons who are exempted from using a cash register in the issuing of invoices on their supplies will no longer be obliged to report invoices on a PTGSZLAH data sheet (as the Tax Authority will receive the required information of the respective invoices through the real-time reporting anyway.)

The amended decree abolishes registration with the Tax Authority's invoicing system (formerly ‘SZAMLAZO’ data sheet).

We remain at our clients' disposal regarding any queries arising in relation to the changes. 

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