Electronic invoice in Hungary

In Hungary, electronic invoicing (e-invoices) plays a crucial role in the VAT system and is actively promoted by the tax authority to optimize tax collection and combat tax fraud. The legal basis for electronic invoicing in Hungary includes national laws as well as EU regulations.

1. Hungarian VAT Act (Act CXXVII of 2007 on Value Added Tax – Áfa törvény)

The Hungarian VAT Act (Áfa törvény) serves as the foundation for regulating electronic invoicing in Hungary and governs the requirements for issuing invoices, whether in paper or electronic form. The law contains specific provisions for electronic invoices:

• Section 169 of the Áfa törvény states that electronic invoices hold the same legal status as paper invoices as long as they meet the requirements for authenticity and integrity.
• Electronic invoices are recognized for tax purposes if they are created and transmitted in accordance with the technical and security requirements.

2. Decree 34/2014 (VIII. 1.) of the Ministry for National Economy

Decree 34/2014 (VIII. 1.) of the Ministry for National Economy regulates the requirements for electronic invoicing in Hungary. It establishes that all electronic invoices must meet the requirements for authenticity and integrity to be recognized for tax purposes.

• The decree requires businesses that issue electronic invoices to ensure that they meet technical standards and are reliably archived.
• For electronic invoicing, specific format requirements and procedures for electronic transmission must be adhered to.

3. Electronic Invoicing and the Hungarian Tax Authority (NAV)

The Hungarian Tax Authority (NAV – Nemzeti Adó- és Vámhivatal) plays a central role in overseeing and managing electronic invoices in Hungary. One of the key developments in recent years was the introduction of mandatory e-invoicing for all businesses operating in Hungary.

• Mandatory Electronic Invoicing (2018): Since 2018, all businesses in Hungary are required to submit invoices over 100,000 HUF (approx. 270 EUR) electronically to NAV. These invoices must be submitted in a special XML format.
• Businesses that issue invoices exceeding 100,000 HUF must transmit invoice data in real time to NAV. The tax authority processes this data to prevent tax evasion and optimize VAT collection.

4. Electronic Invoice Submission System (Online Invoice Data Transmission)

Since 2018, the online invoice data transmission (Online Számla) system has become a key component of Hungary’s tax system. The NAV provides a platform through which electronic invoices and invoice data are transmitted in real time.

• Online Számla: The NAV platform enables businesses to transmit the relevant data of electronic invoices to the tax authority in real time. This applies to all invoices exceeding 100,000 HUF (approx. 270 EUR).
• Real-time Data Transmission: Businesses are required to submit invoice data such as invoice number, tax amounts, customer details, and total amounts to NAV within 24 hours of issuing the invoice. The platform helps businesses increase tax transparency and prevent fraud.

5. Electronic Invoice Formats

The Hungarian Tax Authority requires that electronic invoices be submitted in a specific XML format recognized by NAV.

• The XML format is standardized to transmit data in a uniform manner. Businesses must ensure that their invoicing software is compatible with this format to ensure proper submission of the data to the tax authority.
• In addition to XML data transmission, the use of electronic signatures may be required to ensure the authenticity and integrity of the data, particularly for invoices submitted to the tax authority.

6. Archiving Requirements for Electronic Invoices

As in most EU countries, Hungary requires that electronic invoices be stored for a specific period:

• Archiving Obligation: Businesses must retain electronic invoices for at least 5 years. This archiving must ensure that invoices remain readable, unaltered, and accessible at all times.
• Invoices must be archived in a format that is secure and immutable so that they can be presented during a tax audit.

7. Penalties for Non-Compliance

The Hungarian Tax Authority closely monitors violations of electronic invoicing regulations:

• Penalties for Non-Compliance: Businesses that fail to submit their invoice data to NAV within the prescribed deadlines or fail to meet the technical requirements for electronic invoicing can be fined.
• Violations of the archiving obligations for electronic invoices can also lead to penalties. Incorrect or erroneous data submissions may also result in legal consequences.

8. Collaboration with the EU (Peppol and eIDAS)

Like other EU countries, Hungary implements the EU Directive 2014/55/EU on electronic invoicing, which promotes standardized electronic invoicing in the public sector. Hungary participates in Peppol, an international network that enables the secure exchange of electronic invoices between businesses and public administrations.

• The Peppol standard facilitates the exchange of electronic invoices between businesses and public authorities within the EU.
• The eIDAS Regulation of the EU, which sets standards for electronic identification and trust services, is also followed in Hungary, particularly with respect to electronic signatures and trust services.

Summary of Key Legal Foundations in Hungary:

• Hungarian VAT Act (Áfa törvény): Electronic invoices are recognized for tax purposes if they meet the requirements for authenticity and integrity.
• Decree 34/2014: Regulates electronic invoicing, format, and transmission requirements.
• Online Számla System: Mandatory real-time transmission of invoice data for invoices over 100,000 HUF to NAV.
• Archiving Requirements: Electronic invoices must be retained for at least 5 years.
• Peppol and eIDAS: Hungary implements the EU directive on electronic invoicing in the public sector, particularly through Peppol.
• Penalties for Non-Compliance: Failure to comply with data transmission or archiving obligations can lead to penalties.

Conclusion:

In Hungary, electronic invoicing has been mandatory for invoices exceeding 100,000 HUF since 2018, and businesses must submit these invoices in real time to NAV. The NAV provides a central Online Számla system for the transmission of invoice data. Companies must ensure they meet the technical requirements for electronic invoicing and comply with archiving obligations to avoid penalties.