Indirect Tax Newsletter

Significant changes in the Value Added Tax compliance procedures in 2017

Regulation background

As of 1 July 2017 stricter regulations concerning Value Added Tax (VAT) will enter into force. Based on the new regulations taxpayers will be obliged to provide real time data regarding the invoices issued by an invoicing software to the Hungarian Tax Authority (HTA). This will be applicable if the VAT amounts to or exceeds HUF 100,000. At the same time, the reporting threshold for the Domestic Sale and Purchase Listing will be reduced to HUF 100,000. Furthermore, as of January 2017 taxpayers should indicate the VAT number of customers on their sales invoices where the VAT amounts to or exceed HUF 100,000.

However, the technical details of the real time data provisions have not been published yet.

As of 1 July 2017 taxpayers will be required to introduce an electronic data provision replacing the currently applied periodically aggregated, subsequent data provision for the invoices issued by an invoicing software (including modification and cancellation). Further details (e.g. whether these electronic reports will replace the paper-based Domestic Sale and Purchase Listing reports and other technical details) will be specified in a decree, which should be issued in the near future.

Issues

Based on the fact that the invoice data must be directly provided to the HTA online there will be an increase in administrative burdens. If the Company uses centralized invoicing then these administrative burdens may be significant. In this case, the implementation of the new functionality to the invoicing system may require complex and costly software development. Furthermore, in certain cases the adjustment may be difficult or impossible. Thus the risk of default penalty may increase. In order to reduce the future administrative burdens and associated risks Deloitte Hungary would be pleased to provide alternative solutions.

Services

Deloitte may provide assistance to the Company in a reducing costs, managing risk and acquiring assurance about the manner in which it is indirect tax affairs are handled.

Deloitte is able to issue invoices on behalf of the Company, using its own invoicing system which fulfills the data export and online data provision obligations set forth with regards to the invoicing systems.

• Issuing invoices based on prepopulated data feed
  Deloitte would provide a standard template to the Company and Company would feed with information as per the preset data structure and provide the completed file as per the agreed deadline. Deloitte performs consistency check on the data file and assumes data included are final and approved by the Company. Deloitte uploads data file into the billing system and issues final invoices that are delivered to the recipient of the invoice in paper or electronic means by the agreed deadline.
• Issuing invoices manually
  Deloitte would issue draft invoices manually based on data provided by the Company within the agreed deadline and provide to Company for approval. Deloitte would issue the Company approved final invoices and deliver to the recipient of the invoice in paper or electronic means by the agreed deadline.

We would be pleased to provide customized proposal to the company upon request.