Thursday, 7 January 2016

2016 amendments to the VAT and invoicing legislation in Hungary

The new year brought several changes connected to VAT too.

Periodically settled transactions

Transactions falling under periodical settling include all continuously supplied services, such as lease, cleaning, bookkeeping or supply of goods (car industry, food industry, trade in medicines, etc.) where the parties apply periodical – e.g. monthly, quarterly – settling. Up to now, in such cases the due date of payment was the VAT point date of the transactions, but as of July 2015, the rules relating to bookkeeping, tax advisory and auditing services have changed, which shall apply to all periodically settled transactions from 2016.

As planned earlier, the new rules become general as of January 2016 and from that date they are applicable to all periodically settled transactions.

As a general rule, the date of supply is the last day of the period falling under periodic settlement/payment, however, exceptions from this general rule are probably applicable even more frequently. The date of supply is the invoice’s date of issue if the invoice’s date of issue and the due date for the payment of the consideration are both before the last day of the period concerned. Deferred tax payment (maximum 60 days) continues to be applied if the due date for the payment of the consideration is later than the last day of the period concerned.

Change in the right to deduct VAT

VAT deduction right may be exercised form the VAT period in which the deductible VAT was charged. As a restriction, however, from 2016 only VAT charged in the current period or pre-charged in the preceding the year can be deducted within the framework of the normal VAT return. In all other cases, VAT deduction can be exercises by means of self-revision.

VAT refund deadline

The tax refund deadline will change hand in hand with the classification of taxpayers which the Tax Authority applies. As of 2016, the 75-day VAT refund deadline cannot be shortened for taxpayers classified as „risky”, whereas other taxpayers may take advantage of the significantly shorter deadlines of 30 or 45 days under the already known circumstances.

Changes in the rules regarding invoicing 

The requirements relating to invoicing programmes are also extended from 2016, the most important amendment is the data export. By this, each invoicing program must have a function called data supply for tax authority auditing. It is a function which is built into the system and operates independently and which is suitable for exporting data on invoices. 

Data export means that data on the invoices issued from 2016 must be provided to the tax authority upon request, in the data structure specified in a decree, relating to a specified period or to a given range of serial numbers.

Since date export is needed within the tax authority audit only, therefore data supply obligation occurs only on ad hoc basis. Although - apart from that - the idea to ensure online connection of invoicing programs to the tax authority has also been raised.

Data export is not mandatory for invoices issued prior to 1 January 2016 (except in connection with the modification or annulation of an invoice issued earlier), but the taxpayer may opt for applying this function even to earlier issued invoices. The invoicing programs must; however, be able to perform data export from 1 January 2016 and the user document (which does not necessarily have to be in Hungarian) must contain the description of the given function.

LeitnerLeitner is for your assistance not only in VAT advisory but we are also ready to review the compliance of self-developed or foreign invoicing softwares according to the Hungarian requirements.

For our services offered in the fields of VAT, please visit our website or contact us via e-mail at

You can find more information about Hungarian VAT system in the article of "Guidlines to taxation in Hungary" chapter and in the articles of our Hungarian blog.