As announced recently on our website, from 1 January 2013 taxpayers have to submit a summary report for domestic product supplies (purchase of products) and service supplies (use of services) where the amount of value added tax charged is at least HUF 2 million; such reports must be broken down to invoice level, while the invoices must contain the tax number of the customer. This means it is worthwhile stepping up preparations now to ensure that international accounting software and systems are capable of coping effectively with this increased data provision obligation.
Preparing domestic summary reports represents an extremely high administrative burden for companies which have a large number of incoming/outgoing invoices. This increased administration can under certain circumstances be reduced by linking the bookkeeping programme with the tax authority’s software for completing tax returns.
A draft version of the new tax form is available on the folowing link (only in Hungarain language):
It is not difficult to realise that due to the characteristics of the Hungarian VAT Act, the domestic summary report framework will most certainly generate differences. For example, before the end of the period of limitation the recipient of an invoice can use its deduction right in any subsequent tax return, while the invoice issuer must report the items in the period of performance. Additionally, the HUF 2 million threshold is different at the vendor/service provider and the buyer/service user. So the question is how will the tax authority treat the differences in the domestic summary reports, and will this result in more tax inspections?