Performing online invoice data disclosure in case of self-invoicing with a foreign customer
According to the VAT Act, the taxpayer may also fulfil the obligation to issue invoices by an authorised representative, which in practice is considered self-invoicing. The buyer, as the authorised representative, issues the invoice on behalf of the seller on the basis of a written agreement with the seller. The parties shall be jointly and severally liable for the fulfilment of their statutory obligations relating to the issue of the invoice. In the case of self-invoicing, it is also the seller who is obliged to submit online invoice data, but technically this can only be done via the customer's invoicing system.
This is particularly difficult where the invoice is issued by a foreign partner instead of the domestic taxable person, given that the foreign customer faces significant and disproportionate administrative and IT difficulties in fulfilling the obligation to provide invoice data in relation to invoices issued on behalf of suppliers in the absence of a tax and economic presence.
The recent amendment of the NGM decree regulating the online invoice disclosure obligation has slightly eased some of the rules on the online disclosure obligation for self-invoicing with foreign customers.
One relief is that, if the authorised representative is a person or entity purchasing the goods or services who (or which)
- is not established in the domestic territory, and
- is not a taxable person registered in Hungary in relation to the transaction on the basis of which the invoice is issued in the capacity of authorised representative,
then the online invoice data supply may also be carried out from a computer system other than the authorised representative's invoicing software, provided that it is carried out electronically via a computer-to-computer connection.
This can be achieved by having an external third party provide the data disclosure instead of the authorised representative or, if the parties so agree, by the nominee itself.
Another relief is that taxpayers using the self-invoicing scheme have 6 calendar days to comply with the reporting obligation.
It is therefore not mandatory for the indicated group of authorised representatives to provide data from an invoicing software, but it is sufficient to provide data via a computer-to-computer connection that reports invoices to the tax authority's system within six days of the invoice being issued.
Due to the unfavourable situation for taxpayers, the Ministry of Finance has granted a grace period until 30 June 2021 for those concerned to provide invoice data.
Please note that from 1 July there is no longer a grace period, so invoices issued under self-invoicing must be reported to the tax authority, even if the authorised representative is a foreigner.