As we reported on earlier this year, from 1 January 2024 there are three possible ways to submit a VAT return in Hungary. You can still prepare form 65 through the ÁNYK system and submit it electronically, while the e-VAT system has also been introduced, offering taxpayers two submission methods: modifying and accepting the draft via a web interface, and access via a machine-to-machine connection, i.e. an M2M data exchange.
The e-VAT system
The e-VAT system is an electronic VAT return system developed by the Hungarian tax authority (ungarian HuNAV) to digitalise and simplify taxation processes. The system allows tax returns to be filed electronically, thereby reducing paper-based administration, tax errors and administrative burdens. Use of the system helps to ensure an accurate and up-to-date submission of tax data, thereby contributing towards the efficiency of the tax process. The rollout of the electronic system is also in line with the European Union’s digital transformation efforts, which are summarised in the EU’s ViDA proposals.
Conditions and preparatory work
So using the e-VAT system is not compulsory, it’s an option, but before using it, taxpayers must have the right technical infrastructure in place, including the right software. Preparation includes setting up the systems and training users. The first step for connecting to the system is to register and set up user rights. The NAV provides taxpayers with a range of support materials and guides to facilitate the transition to the electronic system. The system is constantly being improved and the NAV is regularly updating and improving the service based on user feedback.
The M2M data exchange
Of the two possible solutions for the e-VAT system, submitting tax return data via a machine-to-machine (M2M) interface undoubtedly requires more technical and software preparation work. With the M2M data exchange, the data is reported in the manner and with the data structure as published by the tax authority, and the connection enables an automated data exchange between the taxpayer’s systems and the NAV’s system. The purpose of the M2M data exchange is to enable businesses with large volumes of data to fulfil their VAT return obligations efficiently and securely. And the automated data reporting further reduces the possibility of human error and allows for faster data processing. The technical implementation includes the use of APIs and data security protocols. The M2M data exchange also implies a software module that communicates with both the administration system and the NAV database, manages the data from these systems in an integrated way, and implements and manages the workflows required for the returns.
It follows from the above and from the NAV’s information that during the M2M data exchange, the client-side administration system must also be able to handle the specific features of the e-VAT M2M system. This is why the NAV drafted development documentation, which is available to everyone on the GitHub development platform here (in Hungarian).
Despite the help from the Hungarian tax authority, if you still get stuck using the M2M data exchange or have other questions about the e-VAT system, experts at the IT / Business Automation division of WTS Klient Hungary will be happy to help. Please do not hesitate to contact us.
