Changes in invoicing and vat reporting
From 1 July: buyer's tax number needed, invoices reporting to tax office tightened, and vat report recapitulative statements tightened
Changes in invoicing rules.
From 1 July 2020, the invoices shall be issued within 8 days from the date of the completion, a reduction from the current 15 days.
The requirement for the mandatory data content of the invoices also changes. Accordingly, at least the first 8 digits of the tax number of the buyer as domestic taxable person must be shown on the invoice, regardless of whether the document contains any VAT passed on or in what amount.
According to the legal wording, the obligatory data content of the invoice is the first eight digits of the “tax number or, in the case of a group VAT group, the group identification number of the customer acquiring the service, under which the supply of goods or services was made to a domestically registered taxable person, provided that the seller or service provider is established in the country for economic purposes and, in the absence of establishment for economic purposes, is domiciled or habitually resident '.
In this regard, it should be emphasized that in the case of a transaction subject to domestic reverse taxation, the 11 digits of the tax number must be entered on the invoice, the indication of the first 8 digits is not sufficient.
The buyer's tax number shall be indicated for the first time on the invoices issued on transactions that are completed (the completion date is) after 30 June 2020, regardless of the amount of the value added tax.
Temporarily, invoices issued for a transaction that completed after 30 June 2020, which yet does not include the buyer's tax number, may still be acceptable for VAT deduction if it was issued before 1 July 2020 and the tax is less than HUF 100,000.
It is important to check before accepting an incoming invoice that your partner has also included the customer's tax number on the invoice. We encourage you to send information to all our partners, even by forwarding this email.
Reporting invoices to the tax office.
Again from 1 July 2020, data on each and every domestic transaction and invoice issued to domestically registered taxable persons shall be sent to NAV (tax office) electronically.
The change compared to the previous rule is that so far only invoices with a VAT amount of HUF 100,000 or more had to be submitted to the tax authority. This means that the threshold has been removed and subsequently from 1 July the tax office will see literally all invoices between domestic businesses.
The reporting is also applicable on transactions between domestically registered taxable person that bear reverse charge vat or exemption from vat.
If someone still uses manual invoices then they shall report all their sales invoices to domestic vat registered entities:
- in one day if the vat amount of the invoice reaches or exceeds HUF 500,000
- in four days in other cases.
From 2021, the provision of data will be extended to such an extent that only exceptions are mentioned in the legislation:
All invoices must be reported, except:
invoices issued for the supply of goods or services which are effected in another Member State of the Community and which, in respect of the supply of goods or services, satisfy the taxable person's tax liability under the special rules for taxable persons providing services which may be supplied at a distance.
Subsequently, all invoices will be subject to reporting, including:
- invoices issued to individuals (the data will not include the buyer's personal data)
- invoices issued for the supply of goods and services in the Community; and
- invoices for export sales.
According to the plan from 2021, the tax office (NAV) will prepare a draft VAT return for taxpayers based on the data provided. Details of this have not yet been published by the tax authority.
We strongly recommend businesses still using manual invoices to switch to using a billing software or online billing. These can be linked to the tax office's database directly, and so the reports would go instantly and automatically.
VAT report: change in the domestic recapitulative statements ("M-sheets").
Legislation introduced on 1 January 2013 and amended on 1 January 2015, required taxable persons to complete, as part of their VAT returns, a domestic recapitulative statement on all transactions in which the VAT content reaches or exceeds HUF 1,000,000.
The rules on domestic recapitulative statements changed in 2017 when the reporting threshold was brought down to HUF 100,000.
Currently, in line with the invoice reporting rules, the value limit of HUF 100,000 will also be abolished in the case of domestic recapitulative statements from 1 July 2020. This means all incoming invoices must be included in the recapitulative statement, on the basis of which the taxable person will deduct VAT. VAT-exempt invoices do not have to be entered on "sheet M".
The recapitulative statement must continue to show the full amount of the tax base and the value added tax on the invoice received, regardless of whether the recipient of the invoice exercises their right to deduct only partially.
This publication has been carefully prepared, but it has been written in general terms and should be seen as broad guidance only. The publication cannot be relied upon to cover specific situations and you should not act, or refrain from acting, upon the information contained herein without obtaining specific professional advice.
We, our partners, employees or agents don't accept or assume any liability or duty of care for any loss arising from any action taken or not taken by anyone in reliance on the information in this publication or for any decision based on it.