The penalty-free period for online data disclosure will last until 31.03.2021.

Based on the VAT Act, from 4 of January 2021 data disclosure became complete regarding the obligation of all domestically established and not established (VAT registered) taxpayers in Hungary to disclose information on all invoices and on the corrective invoices related to the supply of goods and services, issued in accordance with domestic invoicing rules.

With the expansion of the obligation to disclose data, NAV (Hungarian National Tax Authority) also modified the data structure of the Online Invoice system. Version XSD 3.0 includes legal changes as well as features that make it easier for customers to manage their administration.

In order to ensure a smooth transition to the new system, XSD 3.0, the tax authority provides a sanction-free period until 31 March 2021. The old XSD 2.0 specification can still be used during the sanction-free period, but as of April 1, 2021, data can only be disclosed via the more advanced version 3.0.

The sanction-free period was justified, among other reasons, by the fact that restrictions due to another wave of the COVID-19 pandemic may have prevented taxpayers from preparing for the new rules. The moratorium provides an opportunity to develop billing programs and complete the extended mandatory invoice data disclosure service by the end of March 2021.

In the light of the above, the tax authority will not impose a default penalty until the end of March 2021 if VAT subjects do not, or do not properly disclose data on their invoices that were newly entered in the range of invoices affected by the data supply from 4 January 2021.

Until 31 March 2021, the tax authority will not apply sanctions in the following cases:

• If the taxpayer required to disclose data on an invoice issued by the invoicing program, which is required to be reported according to the rules in force on 1 July 2020, provides data according to the old rules (i.e. using the version 2.0 scheme).
• If the taxpayer does not disclose the mandatory data provision for an invoice for which data is to be disclosed only from 4 January 2021.
• If the taxpayer discloses data on an invoice for which the rules in force on 1 July 2020 do not require data, however, the data disclosure is not appropriate.

From those taxpayers, who issue invoices and were not obliged to disclose data before 04 Jan 2021, only those will be exempted from the sanction, who register in the Online Invoice System of NAV no later than they issue the first in-voice which is the subject of the law on data disclosure.

It is important to emphasize that the subsequent replacement of data not disclosed in the period from 4 January to 31 March 2021 or the subsequent correction of inadequate data are not the conditions of receiving exemption from sanc-tions.

The most important requirements of the regulation effective from 4 January 2021

From this date the obligation to disclose data also includes the following transactions:

• invoices issued to private individuals,
• invoices issued to other non - taxable customers (e.g. condominium, association, foundation),
• invoices issued to foreign taxpayers,
• Community duty-free and export-free invoices,
• also for international reverse charge invoices outside the territorial scope of VAT.

Exceptions to the disclosure obligation are transactions carried out in another Member State of the Community, and in respect of which the taxable person complies with their tax obligation under the special rules for taxpay-ers supplying services which can be provided at a distance (in case of MOSS or OSS).

Data on the purchase ticket in the agriculture, receipt and accounting document still do not need to be disclosed.

As of 4 January 2021, the content of the data disclosure was also expanded. In addition to the obligatory data content of the invoice according to the VAT Act, also the following data needs to be disclosed regarding:

• in the case of a printed invoice: the currency and the exchange rate used for the tax base,
• in the case of an invoice issued with a program with a billing function: the currency used to determine the tax base, in the case of a foreign currency, the data converted into HUF and the exchange rate used for conversion into HUF, determined in the VAT Act (only VAT must be indicated in HUF on the invoice),
• in the case of free transactions subject to VAT: the fact that the transaction is free and whether the purchaser is obliged to reimburse the VAT,
• in the case of an advance: both the total amount and the difference (also for the domestic summary report),
• if the place of performance is not domestic: the transaction is outside the territorial scope of VAT (this is still not required for the invoice)

The first eight digits of the customer's tax number or, in case of a group VAT subject, the group identification num-ber have been a mandatory content of the invoice since 1 July 2020, therefore, if the customer's tax number is not on the invoice, version 3.0 of the Online Invoice System does not process the data disclosure, while version 2.0 only sent a warning.

In the case of a non-taxpayer customer, the name and address must also be indicated on the invoice and in the data disclosure. In case of a private person customer, the data disclosure does not include the name and address of the private person customer for data protection reasons, however, the invoice must contain these information. The tax identification number of the private customer is not a mandatory content element of either the invoice or the data provision.

In version 3.0, the VAT codes have also been expanded. In the new data disclosure, the markings of the tax codes must be given both with their codes and the text on the invoice. Regarding this matter, the VAT code indicating the 0% tax rate cannot be applied, because if it is used, the data supply will be incorrect.

In connection with the self-invoicing of foreign companies, the tax authority proposes a solution that if it is not pos-sible to develop invoicing programs in accordance with Hungarian legislation, the foreign companies should comply with the required data disclosure of invoices through the provision of cloud service companies.