The Hungarian tax office has announced changes in the real time reporting (RTR) system that will take effect in two stages with the first stage commencing from 1 July 2020.
Under the current rules, which will continue up to 30 June 2020, businesses registered for VAT in Hungary are only obliged to report the content of their invoices issued to other VAT registered entities in Hungary when the Hungarian VAT amount charged on the invoice is HUF 100,000 or above. This is usually reported through an online connection to the tax office.
Businesses registered for VAT in Hungary who deduct Hungarian VAT must also currently attach a local purchase list to their VAT return. The purchase lists the invoices declared for VAT deduction in the period, when the VAT charged on the invoice is HUF100,000 or above.
What are the changes from 1 July 2020
As from 1 July 2020, the Hungarian tax office has abolished the HUF100,000 threshold. Therefore, all invoices issued in respect of domestic transactions a VAT-registered person (B2B transactions) will be subject to the real-time invoice data reporting obligation, irrespective of the amount of VAT charged. This will include reverse charge and exempt invoices; however, intra-community supplies of goods will be excluded from this first stage.
Also, from 1 July 2020, Hungarian VAT payers must also report all invoices received in respect of domestic purchases in the Domestic Sales and Purchase Listing because the threshold related to this activity will also be reduced to nil.
The second stage of changes will commence on 1 January 2021 and will include the need to include within RTR invoices issued in respect of domestic transactions with non-taxable persons (B2C transactions) and to invoices relating to B2B intra-community supplies of goods. Invoices issued in respect of a B2C transactions carried out in another EU member state on which the supplier accounts for VAT under the Mini One Stop Shop (MOSS) scheme would not be subject to the real-time invoice data reporting obligation.
If you are a business VAT registered in Hungary making domestics supplies of goods and services, it is likely that you will be affected by the changes. Please contact one of VAT experts for further information.