Online data reporting for invoicing was launched in Hungary on 2 July, though we may still see some technical problems in the course of the reporting. WTS Klient Hungary believes it would be useful if the penalty grace period of 1 month, i.e. until 31 July, were somewhat longer, given the processes at companies working with non-Hungarian invoicing systems.

Practical experience with online data reporting for invoicing

Parallel to the system that went live from 2 July, the test system for online data reporting for invoicing is also available, so special-case invoicing can still be run through the test system first to see whether the taxpayer receives a positive or negative response. (Don’t forget that providing incorrect data can leave taxpayers facing substantial default penalties.

Initially there were differences between the invoicing software programmes developed by Hungarian software developers. Most of the developers were successful in their endeavours, and the online data reporting for invoicing worked well right from the outset; others experienced problems with communications in the first weeks. And in some cases it is not easy to identify where the problem is. We feel it is important to note that the law only requires reporting on the data content of invoices, which means the obligation does not relate to other documents, pro forma invoices and receipts produced by accounting systems.

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Technical and secondary registrations

The online data reporting for invoicing system resembles the EKÁER system in that here too it is the company’s representative or authorised representative who can set up the primary registration, and they can configure the technical registration as well, which is a prerequisite for M2M communication. Separate technical registration is also recommended for self-billing and in the case of all self-billing structures, while requesting separate technical registrations is advisable too when using various invoicing programmes at the same time. Two types of authorisation can be set during a technical registration:

1. invoice management and invoice queries, or
2. invoice management and own invoice queries

The primary user can also give access to secondary users, and can define the activities that these secondary users can perform.

Access to the Hungarian government portal is not required for secondary registrations, which means, for example, a foreign finance director or foreign experts at international companies can also view the system, check the data reporting, query the list of invoices issued for their company, and authorise their invalidation if mistakes have to be corrected.

Correcting errors

If an original invoice has been issued incorrectly, for example the wrong tax number, VAT rate or net amount, etc. is stated, then in line with Hungarian invoicing regulations a correction document must be issued that refers to the number of the original invoice for the transaction. The system has to record the data content of the original invoice and the correction invoice.

What is important is that errors can be corrected in cases that deviate from the above as well. For example, if the data reporting cannot be processed or if a technical error slips in to the online data reporting for invoicing, then the mistake must be corrected. First of all, the data reporting must be repeated electronically in that the correction must be approved online either by the primary user or by a secondary user authorised for such tasks (i.e. the error can only be corrected [technical invalidation] after a manual step). If the developer cannot resolve the problem within 3 working days for whatever reason, then the data can be reported manually. Do not forget that the manual data reporting also has to take place on the https://onlineszamla.nav.gov.hu/ website in Hungary if the taxpayer uses a printed invoice book to issue invoices instead of invoicing software.

Grace period for penalties

According to information from the Hungarian Ministry of Finance the NAV will not impose penalties until 31 July if taxpayers register themselves in the system for online data reporting for invoicing before issuing their first invoice, and then subsequently load the invoices in by 31 July. The penalties are not to be sneezed at since at any given taxpayer they can total up to HUF 500,000 (roughly EUR 1,500) per incomplete or failed data transfer or invoice.

We will keep our readers updated of the initial lessons learned from the roll-out of the online invoicing system. Please feel free to contact us if you have any questions or comments. Together with our developers we will work on finding solutions for even the most challenging of situations.

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RELATED ARTICLES:

Online invoicing in Hungary: you can register in the live system from 18 June

Online data reporting: only 2 months to go!

New draft decree on live invoicing, or online data reporting

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A Online data reporting for invoicing bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.

It looks like the live system of online data reporting will finally be introduced in Hungary from 1 July 2018. Any further extension to the deadline seems quite unlikely, especially given that the EU has accepted the system too. Therefore the documentation available on the NAV’s online test page is not expected to change, and the applicable government decree will soon be announced as well.

What can be expected?

Things will pick up pace in the next few months. This period will be important for developers as well as taxpayers, and we are confident we will only find out how prepared everyone is once the live data reporting system is turned on. We can safely assume it will not be 100% perfect.

Right now the specifications and the XSD scheme are considered final, but they can be altered slightly based on the information coming from taxpayers and testing. All the amendments to the specifications and the system will be announced by the NAV. (Hopefully this will not mean multiple notifications per year).

The online testing system will not be usable as the live system and for the purposes of obligatory data transmission, but it will still be available for taxpayers if they wish to test the system. Registration (primary, secondary and technical) in the live system will probably be available earlier than 1 July. Ideally, you will be able to register in the live system at least 30 or 15 days in advance to avoid the possibility of the first data reporting failing on 1 July due to registration problems. Data may only be uploaded to the live system from 1 July.

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[box]Registration of users

The natural persons performing the data disclosure on the platform on behalf of the taxpayer liable to data disclosure are the so-called primary and secondary users, the whole data necessary for the application of the machine-to-machine interface in case of data disclosure performed from the billing software is the so called technical user. It is common for each user that they shall be “created” in the online interface., i.e. users should also be registered, for them – depending on the types – different user rights (privileges) can (and should) be provided. The secondary users and the so-called technical user can be created by the primary user on the interface.

Source: https://onlineszamla-test.nav.gov.hu/tajekoztatas_a_regisztraciorol

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How prepared are we?

The NAV has been highlighting this new obligation on several platforms in Hungary, but the results of the survey conducted by WTS Klient Hungary at the beginning of this year clearly showed that many taxpayers are still not familiar with all the elements of the system. This obligation is nothing new for chief accountants, tax consultants and employees working in the financial field, but the decision-makers at tax-paying entities do not always know which elements will be obligatory in the final system.

It is a common misunderstanding that data must be reported within 24 hours in the case of invoices issued by a software programme. Hungarian legislation prescribes immediate data reporting with no human intervention. There were several companies in our survey who understood data reporting to be just the online forwarding of the amount on the invoice, whereas in actual fact, all the obligatory invoicing details must be forwarded to the NAV.

The situation is exacerbated at companies where more than one invoicing software programme is used, possibly alongside handwritten invoices as well. For handwritten invoices the invoice data needs to be entered into the online platform within 5 days (in the case of invoices with VAT of HUF 500,000 (roughly EUR 1,600) or more: on the day after the issuance of the invoice). Relief may come for those working with Hungarian accounting software in that the software will likely handle online data reporting by default.

Numerous respondents of the survey indicated that they use invoicing software integrated with their foreign parent company and are only users with no higher-level technical rights. In these cases compliance with online data reporting must be resolved in other ways as the system is expected to be launched, and taxpayers may face a default penalty of up to HUF 500,000 (roughly EUR 1,600) per invoice in the case of inadequate data reporting.

Moreover, the tax consultancy team at WTS Klient Hungary has found that the data exporting function of invoicing software programmes, which has long been obligatory, is often not fully operational either. According to tax consultants, perhaps the greatest problem and challenge is how warning and error messages received during individual cases of incorrect data reporting can be processed and managed.

Our advice on online data reporting

Taxpayers who use foreign accounting software need to find a solution for real-time data transmission to the NAV. Internal and external developments might be necessary to ensure the data reporting functions perfectly, which can be time-consuming, taking up to several weeks. This is why you need to find the right service provider in time.

We strongly recommend testing the online platform since this will be where you will need to make the primary registration for the live system as the managing director or representative of the taxpayer. Primary users will be responsible for registering secondary users and handling the technical registrations as well. In the case of self-billing, suppliers must also be prepared for the upcoming tasks, such as the technical registration.

Appropriate plans and programmes need to be compiled for managing warning messages received during data reporting.

One important prerequisite of successful online data reporting in Hungary is preparing your systems for the change in good time, with joint assistance from IT and tax consultants. Our expert team will gladly help you check your invoicing software.

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You can download the summary in PDF format here:
WTS Klient Newsflash 04.05.2018. – Online data reporting (PDF)

RELATED ARTICLES:

New draft decree on live invoicing, or online data reporting

Online invoicing from 1 July 2018 Electronic data reporting

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A Online data reporting: only 2 months to go! bejegyzés először WTS Klient Hungary | tax | accounting | payroll | advisory | HR services | digital solutions | state aid-én jelent meg.