Real-Time Information Reporting (RTIR) took effect in Hungary on 1st July 2018. This directive was issued for domestic invoices with a minimum of 100,000 HUF (250 EUR) VAT.
Later, on 1st April 2021, the tax authority mandated that all B2C and B2B transactions be reported in real-time, irrespective of the amount.
Electronic invoicing is not mandatory in Hungary, but the country relies on the NAV (Nemzeti Adó és Vámhivatal) system to collect VAT data.
This system allows the National Tax and Customs Administration of Hungary (NAV) to validate transactions in real-time. It is called Online Számla, a web portal that requires data to be transmitted in XML format.
Even though invoicing is not mandatory, the RTIR requires some invoicing specifics that help the tax administration in data collection.
In this post, we’ll discuss e-invoicing in Hungary, including who it is mandatory for, the platform used, requirements for electronic invoicing, and the process of transmitting a compliant e-invoice.
Is electronic invoicing mandatory in Hungary?
Electronic invoicing is not mandatory for B2G and B2B transactions in Hungary. However, the Hungarian tax authorities have developed a way to acquire all VAT-related data from buyers and consumers.
The NAV system, Online Számla, allows all those affected by the law to provide their transaction data in real-time. This makes it easier for the tax authorities to monitor tax compliance and other relevant data.
Electronic invoicing in Hungary became a reality in 2018. The government has made progress towards making e-invoicing accessible for all businesses.
Let us look at the major actions the Hungarian government took over the years:
July 2018
The government mandated all Hungarian taxpayers to issue an invoice for VAT amount greater than or equal to 100,000 HUF and report the invoice to the tax authorities in real-time.
This was the first significant step towards mandatory e-invoicing in Hungary. All taxpayers issuing an electronic invoice had to use the NAV system.
January 2021
Online Számla is a portal and electronic invoicing system that has been operational since January 2021. It came into use at the same time the government made it mandatory for B2B and B2C transactions to be reported in real-time.
April 2021
The Hungarian tax authorities made it mandatory for all taxpayers to use the then-new NAV Online 3.0. The NAV system has undergone various upgrades and changes to make it more user-friendly.
The most recent version is the NAV Online 3.2, which was released in November 2022. This version amended various issues, including:
- Technical cancellation via the machine interface of invoice data recorded on the web interface
- Automatic rejection of technical cancellations after 30 days
- Technical cancellation of electronic invoices made in the Online Invoice system
- The requirement to display the personal data of primary users so that the system will no longer show personal data such as name at birth, date of birth, mother's name, etc.
What is the e-invoicing platform and management solutions in Hungary?
Hungary relies on a centralized system for VAT and tax purposes. The RTIR model was initially introduced in 2018 as an anti-fraud e-invoicing measure.
The current NAV Online 3.2 RTIR system is the newest version of the Hungarian electronic invoicing platform. It requires documents in XML format, which you can input using the Online Számla.
What are the requirements for e-invoicing in Hungary?
When sending an electronic invoice in Hungary, there are requirements set by the Hungarian tax authority that you have to adhere to. This also applies when providing invoice data in the NAV system.
Let us look at the requirements for e-invoicing in Hungary:
Information required
You must include the following basic information when sending an electronic invoice in Hungary:
- Issuance date
- Unique sequential number
- Supplier’s VAT number
- Supplier’s and customer’s full names and addresses
- Clear description of goods or services in question
- Quantity of goods
- Date of supply if it is different from the date of issuance
- The total taxable value of the supply
- VAT rate
- Full details supporting zero VAT, for example, intra-community supply or reverse charge
- The gross value of the invoice
Format
The accepted format for sending electronic invoices in Hungary is XML or signed PDF documents. However, the XML format is the most recommended as it is available in the Hungarian tax authority’s online system.
Digital signature
A digital signature is only mandatory in Hungary if you send an invoice in PDF format. The NAV system instantly validates invoices in XML format as real-time reports are transmitted through the RTIR.
Archiving
Invoices sent for business conducted in Hungary must be archived for at least 8 years from the annual financial statement. This makes it easier for the tax body to conduct audits and consider information that goes several years back.
What is the e-invoicing process in Hungary?
Submitting an electronic invoice in Hungary is straightforward when using the provided platform. Here is how to process electronic invoices in Hungary:
Step one: Register on Online Számla
As per the Hungarian legislation, you must register on the NAV system to send electronic invoices. For this step, you will need a Hungarian Electronic Government Gate, your personal tax number, and your business’s tax number.
Visit the site (https://onlineszamla.nav.gov.hu/home) and register your business. You will insert your 10-digit personal tax number, select your business type, and add the business’s tax number.
Step two: Create a technical user and keys
After registering your business, you must create a technical user to help you connect your accounting software to the NAV system. This technical user should have a username, password, XML key, and XML exchange key.
Step three: Connect your ERP to the NAV system
Now that you have the technical user details, open your invoicing software and enter the information above in the settings. If you have a challenge filling in the information, refer to your software manual or inquire from your provider.
To make this step easier, most business owners prefer to consult a professional from the Hungarian tax authority. They can help you complete the process quickly and with minimal challenges.
You may also like: ERP Integration Process.
Step four: Create and issue an invoice from your software
If successful, you will see all invoices you have sent from 1st July 2020 in the NAV online invoicing system. You can check this from the “Outbound Invoices” section in the Online Számla.
You can now generate new invoices with your invoicing software, and the Online Számla will pick up the invoice details.
If you don’t have invoicing software or are still using paper invoices, you have to manually enter the invoice data in the platform. This is time-consuming, considering that the platform is automated to make it easier to transmit electronic invoices.
Manual entry has a five-day grace period from the date of issuance of the invoice.
Step five: Report the electronic invoice
The Hungarian tax authority requires you to report your invoice in real-time and in XML format. You can do this directly using the invoicing platform or a reliable electronic invoicing service provider like Storecove.
Who is affected by the e-invoicing mandate in Hungary?
The latest e-invoicing mandate in Hungary affects three groups, including:
- Companies located in and doing business in and/or out of Hungary
- All foreign companies with tax residence in Hungary
- Anyone sending an invoice to domestic taxable persons for transactions in Hungary
What is the penalty for not adhering to the e-invoicing mandate in Hungary?
Hungary has set aside some laws, including penalties for those who fail to comply with the set electronic invoicing regulations. The penalty for non-compliance is a fine of up to 500,000 HUF (1,280 EUR) per invoice.
How to prepare for e-invoicing in Hungary
The Hungarian government has helped businesses switch to electronic invoicing by providing reliable software. E-invoicing is not mandatory, but it can offer Hungarian companies numerous benefits.
Here are ways you can prepare for or transit to electronic invoicing:
Source reliable accounting software
Your ERP can help minimize the workload of manually inputting invoice information into the Online Számla. Find software that can generate electronic invoices with all the required details and store them for the 8-year minimum archiving period.
Such software shortens the invoicing and payment process when integrated with the NAV system.
Partner with a reliable e-invoicing service provider
Even with accounting software, business owners are prone to making mistakes that may lead to non-compliance. For example, making mistakes when entering your invoice data.
Partnering with a reputable electronic invoicing service provider such as Storecove can help ensure compliance with all set regulations. We help streamline invoicing processes for businesses by keeping up with the invoicing regulations in Hungary.
Register for the NAV system
This step has prevented many businesses from enjoying the benefits of the Online Számla. It may sound complicated, but the Hungarian tax authority has set up measures to help companies with the process.
You can visit their offices for a detailed explanation of using the electronic invoicing platform. They also help you set up and integrate your account with the NAV system.
Takeaway: Stay up to date with Hungary’s e-invoicing system
Electronic invoicing is transforming how businesses operate in Hungary. To understand and leverage its functionalities, companies must deeply understand the NAV system, including who manages it and how to use it.
The NAV system is a technology that can help businesses with real-time invoice reporting. It helps improve efficiency and mitigate risks while strengthening the collaboration between government authorities and business owners.
If you are ready to join the thousands of businesses in Hungary that have already adopted electronic invoicing, contact Storecove today. We are an e-invoicing service provider that can help ensure compliance and streamline your invoicing processes.
More information about E-Invoicing in Hungary?
Contact us for more information or schedule a consult with one of our e-invoicing experts.
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