Online Invoicing: The deadline is coming, the penalty-free period is terminating soon!

2021/03/02

Online Számla: Közeleg a határidő, hamarosan lejár a szankciómentes időszak!

As known, from January 1st of 2021, the scope of obligations to provide information to the National Tax- and Customs Administration was further extended, and the data of invoices issued to individuals must also be provided to the tax authority.

Due to the coronavirus pandemic, NTCA is not imposing a default fine until the end of March. 

Time is ticking, the penalty-free period is coming to an end. As the change affects all businesses, it is worth reviewing the billing processes and systems to see if they meet the regulatory compliance and expectations.

What does the sanction- free period means exactly?

Until the end of March, NTCA is not going to impose a default fine if VAT subjects do not, or do not properly provide data on their invoices - that has been newly included from the 4th of January 2021 - amongst the invoices with the data providing obligation.

Who is concerned by the reporting obligation?

From 2021, almost everyone will be affected by the obligation to provide information to the tax authorities. NTCA has expanded the list of taxable people obligated to provide data.

From the 4th of January 2021:

The data of invoices issued by a billing program or issued manually will also be obligatory to submit to NTCA in case of: 

  • a domestic or foreign non-VAT private person, legal person, organization,
  • a non-resident VAT entity, namely a VAT entity from another Member State or a third country 

So those who have so far only invoiced to individuals, community or non-community companies are also affected by the new rules of the reporting obligation.

From the group of taxable persons issuing invoices - who did not have to provide the online invoice data service before the 4th of January 2021 - will only be exempted from the penalty if they register in the NTCA Online Invoicing system, latest on the day of issuing the first invoice subject to the reporting obligation.

Failing to implement this obligation or incorrect supplying of data may have serious consequences.

It is worth to prepare for the change-over now, as after the sanction-free period, the tax authority may impose a penalty up to HUF 500,000 per invoice, in case of failure to provide invoice data, late, incomplete, incorrect, or false data.

So, it is necessary to prepare invoicing programs providing the required invoice data information by the end of March 2021. Those who still use the manual billing account block can switch to machine billing during this time, making it easier to provide data.

However, it is not worth to delay asking for help, as there are less than two months left of the sanction-free period. During this time, companies can migrate to the new XSD 3.0 or look for an alternative solution.

What are these alternatives?

Instead of using the company’s own billing software, the NTCA Online Billing software can be used with no charge. However, this primarily complies with the general billing needs of micro and small businesses.

Such a low- cost online invoicing solution cannot be unified with integrated corporate governance and accounting processes of larger companies. For this reason, some companies will certainly do “shadow invoicing”. The gist of this is that an invoice is issued with some external software, but only to meet the expectations of NTCA and to provide the data. At the same time, another invoice will continue to be created "in-house" for accounting purposes. This carries the risk that the tax authorities may object to the double invoicing for the same transaction, especially if the latter is being sent to their customer.

On the other hand, an external software or a web-based billing solution can be obtained that would serve the information obligation. So, the billing system currently in use can be replaced relatively quickly and at not a very high cost.

 

Régen VATapp

 

It is important to note that, a taxpayer who constantly refers to a malfunction and therefore creates invoices manually, can also be subject to penalty, because the billing program used in fact does not have a reporting feature yet.

And if no data has been provided in the recent period, even though the company was obliged to do so, it is recommended to visit both a tax advisor and a business- and IT consultant!

 

Take advantage of Régen’s accounting consulting service

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