Changes in the Hungarian National Tax and Customs Administration’s (NAV) online invoice data reporting system

Software developments can start

The documentation of the Online invoice data reporting 3.0 system is already available on the website of the Hungarian National Tax and Customs Administration (NAV), the developers of invoicing software can start developing the new data provision software version.

With the introduction of the version 3.0 XML schema, from 2021 new requirements and new opportunities will come up for taxpayers and service providers in Hungary. The Hungarian NAV online invoice data reporting will change in two major aspects:

the scope of invoices to be reported will be extended (covering all invoices on supplies), that is invoices issued to private persons will have to be reported, as well as intra-Community transactions and export transactions outside the EU;
the new XML schema (3.0 XSD) will have to be applied for sending data to the online invoice data reporting system, with changes both in the scope of data to be reported, as well as the structure of the dara files.

As a result of these changes the online invoice data reporting system will be comprehensive as the tax authority will see all invoices issued by companies.

There will be a grace period from January till the end of March in relation to version 3.0, with no penalties charged for failing to comply with the new rules.

Some major issues regarding the new regulation:

Entities reporting data have to make sure that invoices potentially already detected as containing personal data of private persons are reported in the online invoice data reporting system in compliance with GDPR rules.
Companies mostly having Community and export transactions (which may have so far reported domestic invoices manually) should now convert to an automated solution and conform to the requirements of the online invoicing data reporting system schema 3.0.

A substantial change is coming in electronic invoicing as, according to the plans of NAV, the new 3.0 XML schema can already qualify as an e-invoice! If the taxable person makes a declaration in this regard, an electronic invoice will be sent as an XML file during data reporting. In this case, it will no longer be necessary to print and deliver paper invoices as well.

However, data, such as names and addresses, must be shown on the invoice but, for private persons, the importing of these to XML and their reporting is expressly prohibited for data protection reasons. So, NAV will differentiate in this regard: the XML data of invoices issued to private person customers will not qualify as an electronic invoice.

Steps in the transition process

The invoicing systems have to be prepared for also reporting invoices issued to private persons as well as exports and EU supplies to the tax authority from January.
Conversion to the new NAV 3.0 XSD schema is necessary, which contains a number of changes, which require not only IT development capacities but also staff with expertise in finance.
In B2B relationships it will be possible to consider the XML file based on schema 3.0 itself as an invoice if the taxable person declares for invoice data reporting purposes that it sends electronic invoices. The relevant terms and conditions are not only determined by the legal regulation but also the internal processes of the company, its contractual relationships with partners, and the content of their cooperation.