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Hungary: VAT reporting under electronic system, EKAER and real-time reporting

Hungary: VAT reporting under electronic system

Certain reporting obligations under Hungary’s electronic trade and transport control system (EKAER) have been reduced beginning 2021. However, almost all invoices with a Hungarian value added tax (VAT) number trigger a real-time reporting obligation.

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EKAER

The Ministry of Finance in late December 2020 published guidance (Decree no.13/2020. (XII. 23)) as new rules under EKAER. The decree, effective 1 January 2021, reflects:

  • The EKAER registration obligation continues to apply only for former “high-risk products”. Relevant product categories are defined by NGM Decree no. 51/2014. (XII. 31.).
  • The registration requirement applies to all transport of goods on public roads above a threshold of 500kg or with a value exceeding HUF 1 million (approximately U.S. $3,400).
  • Guarantees are no longer to be provided for products subject to the VAT rate of 5%.

In parallel with the new decree, there are changes regarding the tax rules that apply for penalties. Based on the amended regulations, the tax authority may only impose a penalty of up to 40% of the value of the consignment for a failure to register in EKAER. Also, an improper EKAER registration is subject to a default penalty of up to HUF 500,000 (for taxpayers).

Real-time reporting

Under the new rules, real-time reporting applies to 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 tax authority highlighted reportable and non-reportable transactions; for example, those to be reported include:

  • Intra-community supply of goods
  • Remote (distance) sales from Hungary to another EU Member State, provided that they are subject to VAT in Hungary and the person liable for VAT has not registered under the one-stop-shop system
  • Remote sales from another EU Member State to Hungary, provided that they are subject to VAT in Hungary and the person liable for VAT has not registered under the one-stop-shop system
  • Supplies of goods or services by a Hungarian taxpayer with a place of supply in another EU Member State subject to the reverse-charge mechanism, except in instance when the invoice is issued by the customer using a self-billing agreement
  • Supplies of goods or services by a Hungarian taxpayer with a place of supply outside of EU (regardless whether self-billing is applied or not)
  • Domestic supplies of goods or services by a non-Hungarian taxpayer 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 supplies of goods or services by a non-Hungarian taxpayer if the transaction is subject to the reverse-charge mechanism
  • Remote sales if the person liable for VAT, registered with the one-stop-shop system and in line with the harmonized EU regulations, or the VAT liability arises in a EU Member State other than Hungary
  • Supplies of goods or services by a Hungarian taxpayer with a place of supply in another EU 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 the reportable data is generally in accordance with the rules for what must be included on invoices pursuant to the Hungarian VAT law. However, in certain situations, additional data is required; for example, when the invoice amount is expressed in a currency other than HUF, the currency and the applicable exchange rate must also be reported. If the invoiced transaction falls out of territorial scope of the Hungarian VAT law, this also would be reportable information.

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

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

A grace period—from 4 January 2021 to 31 March 2021—has been provided, and penalties are not to be levied if the taxpayer fails to meet the newly introduced reporting requirements. The grace period applies on condition that the taxpayer is registered in the real-time reporting system.

Other rules on invoicing reporting

An “invoicing decree” (Decree no. 23/2014. (VI. 30.) NGM) was also amended, with an effective date of 4 January 2021.

One of the changes aims to support electronic invoicing (e-invoicing) by introducing an option that enables taxpayers to satisfy their real-time reporting obligations 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, taxpayers that are exempt from using a cash register in issuing invoices will no longer be obliged to report invoices on a PTGSZLAH data sheet (as the tax authority will receive the required information through the real-time reporting).

The amended decree withdraws a requirement for registration with the tax authority's invoicing system (the former system “SZAMLAZO”).

Read a January 2021 report prepared by the KPMG member firm in Hungary

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