The Hungarian tax system operates under the “Nemzeti Adó és Vámhivatal” tax authority, known as NAV. Before introducing the electronic invoicing system, this office introduced the RTIR electronic reporting system. It is worth reading the information to know how to keep records of invoices when trading with Hungarian entities.

What is e-invoicing? e-Invoicing is a digital process of invoicing throughout the document life cycle, from issuing to archiving and exchange between entities.

What is e-reporting? E-reporting is the process of providing tax-relevant information to a hosted service designated by the tax administration without a response from such service being a prerequisite for downstream invoicing or business process or subsequent tax validity.

What are your main responsibilities?  In the RTIR model, e-invoicing in Hungary is not strictly regulated but allowed. Nevertheless, the seller must report part of the invoice to the tax authority in a predetermined format shortly after it is issued and handed over to the buyer.

From April 1, 2021, Hungary has an obligation to disclose data on all invoices, as well as corrective and invalidating invoices to which the provisions of the VAT Act apply. Data disclosure must be made via the online invoicing system (“Online Számla” platform). This also applies to business-to-customer (B2C) transactions and transactions concluded by non-residents.

Who is required to use e-invoicing in Hungary?  Unlike e-reporting, using an e-invoicing program is not mandatory. Invoices in Hungary can still be issued using printed invoice forms or an invoicing program (or cash register). However, data on invoices issued from the block (or invoicing program) must be disclosed to the RTIR System. Manual invoice data must be entered in the online invoice system (Számla platform). Public administrations must be able to receive and process electronic invoices. E-invoicing by government suppliers is still voluntary.

What is the required e-invoice format? Basically, the RTIR system requires the XML format. Version 3.0 of the tax office’s XML contains a separate field in which invoice issuers can indicate to their clients that a given XML file is used not only for reporting to the tax office, but also qualifies as an e-invoice for the client. In other cases, you can still use formats such as .txt, .csv, .dbf, .mdb, .xsl, .xml, .pdf and any other print file containing unformatted text or characters are accepted. Invoices can be issued in Hungarian or any spoken foreign language. If the invoice is issued in a language other than Hungarian, the taxable person issuing the invoice may be required to provide, at his own expense, an official translation of the invoice into Hungarian in the course of an inspection carried out as part of an administrative tax proceeding. However, bills must be issued in Hungarian.

Storage of electronic invoices in Hungary E-archiving may be conducted in any manner that meets the legal requirements (ensuring confidentiality, integrity and availability), in particular in one of the following ways:

• By electronic signature and storage in the internal archive in accordance with legal requirements (in particular, the validity of the signature must be ensured throughout the entire storage period).
• Using an electronic signature and using a trusted service provider.
• Through the use of a closed archiving system (proper documentation and self-assessment).
• By creating an invoice hash value, sending it along with the invoice to the tax office, receiving confirmation from the tax office and storing all these items.
• Using the EDI exchange system.
• Documents should be kept by: Eight years from the annual accounts Five years for tax purposes, eight years for accounting purposes