Hungary: Grace Period for Real-time invoice reporting of VAT until 31 March 2021

Taxpayers will be required to apply new rules to report data to the online invoice system of the Hungarian tax authority in relation to each invoice issued under a Hungarian value added tax (VAT) number—including for invoices issued to foreign taxpayers, as well as to private individuals.

The online invoice system is effective 1 January 2021, but the tax authority granted a “grace period” until 31 March 2021 for businesses to comply with the new rules.

The purpose of the extension of the real-time invoice reporting obligation is to reduce the size of the underground economy, as well as to enable the tax authority to prepare and propose draft VAT returns to taxpayers next year. The system provides an opportunity for real-time reporting, given that electronic invoicing between business partners; and since the supplier uploads the invoice data to the tax authority’s system, the customer may download the invoices from the system.

As of 1 January 2021, version 3.0 of XSD schema is being introduced so that when invoices are issued to private individuals, the personal data of the customers will be treated anonymously. The current 2.0 schema may be used until 31 March 2021 during the grace period; however, as of 1 April 2021, only the 3.0 XSD schema will be allowed for real-time invoice reporting.

Source Credit: KPMG