High financial penalties await any business that fails to correctly use NAV – the online electronic portal of the Hungarian tax authorities. Amended rules governing the accounting and invoicing of value added tax (VAT, i.e. sales tax) become effective July 1st, 2018.
Hungarian business enterprises as well as foreign companies registered for value-added taxation purposes in Hungary are obligated to submit specific information contained in their outgoing invoices via NAV to the Hungarian tax authorities within 24 hours.
How is NAV supposed to be used?
Anyone wishing to avoid doubling their manual data-entry work needs an automated method of transmitting data to NAV. It’s possible to transmit data electronically in a fixed, defined XML format to the new NAV system (the Nemzeti Adó- és Vámhivatal, in Hungarian) – and with a certain quantity of records which need to be submitted an automatic transfer becomes the only realistic option.
NAV must be used for:
- Invoices that include a billed VAT amount of HUF 100,000 / EUR 320 or higher
- Invoices in which the service recipient (the purchaser) is registered in Hungary for VAT purposes
- Adjusting entries for invoices that meet the prerequisites defined above
Reasons for introducing NAV
The benefits to the Hungarian tax authorities are plainly evident: NAV enables the Hungarian tax and customs authorities to view the transmitted invoices and settle accounts by automated means. In this system:
- Data on the invoices generated are transmitted to the national tax and customs authorities in real time;
- The recipients as well as the invoice issuers can access and review the invoices generated;
- A large volume of invoicing data is made available quickly for effective risk analysis and review, which enables reports on tax fraud.
NAV thereby serves to roll back the country’s shadow economy and stem tax fraud.
What deadlines apply for NAV?
The companies affected must submit their VAT information electronically to the Hungarian tax authorities within 5 days or, in many cases, within just 24 hours.
- Invoices with a transferred VAT amount of HUF 100,000 / EUR 320 or more within 5 days
- Invoices with a transferred VAT amount of HUF 500,000 / EUR 1,600 or more within 24 hours
This underlines once again how important automated data transfer is, as a manual processes not only means extensive effort, but also increases the risk of missing the specified deadlines.
What happens if you fail to comply with the reporting deadlines?
Noncompliance between now and July 31st, 2018 will not be penalized.
However, from August 1st 2018 onwards, the tax authorities may levy penalties on persons or entities subject to mandatory VAT reporting who submit information late or not at all. Hence, private persons can be hit with a late-reporting penalty of up to HUF 200 000 HUF / EUR 640, and other taxable entities with penalties of up to HUF 500,000 HUF/EUR 1,600. Further details about NAV can be found at https://onlineszamla-test.nav.gov.hu/
Let SEEBURGER help you simplify the complex NAV process quickly to avoid incurring any penalties as of August 1, 2018
The NAV process is complex and time-sensitive – particularly with regard to any adjustments needed to previously reported data. In order to design your system implementation efficiently and minimize risks, it’s highly recommendable to collaborate with a partner who knows the requirements in Hungary and other countries. Such an experienced partner can skilfully and professionally support your system introduction and accomodate your growing volume of international reporting and e-invoicing obligations. Thereby you can ensure uniformity and standardization. It’s also recommended to begin these efforts by contracting a cloud-based service for cost-effectiveness.
Reporting requirements like those in Hungary can be technically complex and cause high initial costs within your own company’s operations. These difficulties can be avoided with an immediately useable, preconfigured cloud-based service to which the invoicing information is reported in a clearly defined interface format.
With its SEEBURGER Cloud Service for e-invoicing in Hungary and many other countries, SEEBURGER gets you onboard with a secure, reliable, convenient, scalable and highly-performant system which gives you complete cost transparency. We generate the XML formats in their currently valid versions as specified by NAV, and transmit these files to the Hungarian tax authorities. This Cloud Service is non-ERP-system-dependent, and can be expanded if needs be to include legally compliant archiving.
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Written by: Andreas KillingerAndreas Killinger joined SEEBURGER in 2014 and is a product manager, responsible for EDI services and software applications. He specialises in SAP solutions, as well as electronic invoicing (e-invoicing) for globally active customers. Following an apprenticeship as an industrial mechanic and a degree in law and administration, he had various roles in the public sector. He then worked for IBM as an SAP Senior Consultant and SAP Project Manager in international SAP projects from 1999 to 2013. Born in Berlin, Andreas has lived in the Black Forest since childhood, and loves the area all year round, whether mountain biking or skiing. He enjoys exploring the Rhine and the many lakes in the area on his yacht. He lives with his family and his dog in a former inn from 1749, which he has been lovingly renovating over the past couple of years.