Invoicing and Tax regulation in Hungary
Invoicing Regulation in Hungary
In Hungary, invoicing regulations are enforced rigorously and all companies must adhere to them. It is mandatory for every business transaction to be followed by a legal invoice to ensure financial transparency. The invoice should contain essential details such as unique invoice number, date of issue, company name and address, VAT number, description of goods and services, and the total price.
Real-Time Reporting / Fiscalization in Hungary
Real-Time reporting or Fiscalization is compulsory for all businesses in Hungary. From 1st July 2020, all companies are required to provide real-time invoice data reporting to the National Tax and Customs Authority in case of domestic B2B transactions, immediately after the invoice has been issued. Invoices not complying with these requirements can result in heavy fines.
E-Invoicing in Hungary
Commencing 1st April 2021, it's mandatory for suppliers to use e-Invoicing for all transactions with the government (B2G). However, e-Invoicing is optional for B2B and B2C markets. Hungary has a structured e-Invoice system based on XML format and it's expected to become compulsory for all businesses soon to ensure efficient tax administration.
VAT/GST/Tax Compliance in Hungary
In terms of VAT/GST/Tax Compliance, Hungary has introduced a general VAT rate of 27%, which is one of the highest in the world, with reduced rates applicable to certain goods and services. Businesses are required to register for VAT if they are providing taxable supplies. GST registration is also compulsory for foreign businesses if they supply goods or services in Hungary. Comprehensive tax compliance measures are in place and strict penalties are enforced for non-compliance. Transparency and a well-documented record of all transactions are essential in ensuring tax compliance in Hungary.