Hungary – real time reporting as from 1. January 2021 and self billing arrangements, penalties to be expected as from 1 of April 2021

As of 1 January 2021, the scope of invoices to be reported was expanded, as the invoices issued to non-domestic (i.e. EU or non-EU) tax payers and non-taxable persons also have to be reported, thus the invoice data issued in relation to an intra-Community and export supplies are subject to reporting obligation as well.

In case of self-billing arrangements special requirements are to be fulfilled. As a result of this, the invoices issued by the non-Hungarian (or non-established) customer under the self-billing arrangement is subject to the online invoice data reporting obligation, therefore these invoices should also be reported to the Hungarian Tax Authority.

However if the non-Hungarian customer should not or cannot fulfill the reporting obligations, there is an alternative possibility for the recipient to fulfill the reporting obligations instead of the foreign customer. In this possible scenario the foreign customer could issue an internal document (which is not considered as a taxation document) and this internal document can be booked in their system (as in the past) and no reporting obligations would occur from the side of the foreign customer. In parallel, based on the data of the internal documents issued by the customer, supplier can issue the real invoices (which should be considered as taxation documents) and reports the related data to the Hungarian Tax Authority.

It is also important to highlight that the online invoice data reporting is subject to the joint liability of the original supplier and the authorized customer. In the case of failure to comply with the online reporting obligation, a default penalty can be imposed, which can amount to HUF 500’000(approx. EUR 1’400) / invoice (however, in practice only lower amount is imposed at first and it is increased only if the obligation is still not be fulfilled).  

Based on the official announcement of the Ministry of Finance, if certain conditions are fulfilled (eg: registered in the online reporting system) and if the taxpayer cannot fulfill the new obligation correctly, the tax authority will not assess any penalties between 1 January 2021 – 31 March 2021 in relation to the new regulation valid as of 1 January 2021. Please note that the grace period does not apply for the B2B domestic invoices – which were requested to be reported in the past as well.

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