For some time now several EU Member States have been studying the option of introducing live reporting as a means to improve compliance and tackle tax evasion with some of them actually taking significant steps in this direction.
But it is the Eastern European Member States that have been at the forefront of the drive for more data being reported as they are plagued with relatively low rates of voluntary compliance and collection of VAT receipts compared to their Western counterparts.
Poland and Lithuania, for example are currently requiring tax payers to comply with SAF-T reporting while Romania has a introduced a similar regime in October 2016 with a heavily updated 394 form.
Hungary, one of the largest markets in Eastern Europe has been hinting on the possibility of SAF-T reporting being introduced, although only recently have more details have been unveiled with a ”go live” date set to 1 July 2018.
Under the new SAF-T reporting system, all invoices issued in relation to domestic (Hungarian) transactions of a business to business nature with VAT exceeding the amount of HUF 100,000 (currently EUR 330) would need to be reported, including all invoices that refer to them (e.g. credit notes). By live reporting the Hungarian Tax Authorities mean that an invoice which fulfils the above criteria should be reported no later than 24 hours of the time when the invoice was issued.
It should be noted that unlike Spain’s SII regime, the requirement to report such transactions is intended to only apply to a company’s outgoing invoices. Incoming invoices are not (for the moment at least) subject to the SAF-T reporting. Failure to comply with the new SAF-T regime is likely to trigger penalties of HUF 500,000 per invoice (currently around EUR 1,640).
As the new reporting system is still under development, fresh details will likely continue to be published as the “go live date” draws closer. We will continue to update on this matter whenever new and relevant details will be published.