Hungary ViDA E-Invoicing Reform: Mandatory VAT Changes

At the beginning of March, the Hungarian National Tax and Customs Office published the ViDA implementation document, which outlines the approach Hungary intends to follow to transpose one of the most significant changes in the field of VAT into national legislation. The document outlines key changes ViDA brings, primarily regarding mandatory e-invoicing.

Transformation of E-invoicing

As stated in the document prepared by the National Tax and Customs Office together with the Ministry for National Economy, the ViDA package will fundamentally reshape how invoicing and tax data reporting function in Hungary. From a regulatory perspective, ViDA introduces new rules requiring taxable persons to exchange invoice data with Tax Authorities in real time, replacing the traditional approach in which invoices primarily served as static documents for record-keeping and later reporting. 

However, from a practical standpoint, the reform means that invoices will become part of a continuous digital data flow between companies and the Tax Authority, enabling authorities to monitor transactions almost immediately after they occur.  Hungarian officials emphasized that mandatory e-invoicing will apply to both domestic and cross-border transactions, covering accounts receivable and payable. 

Furthermore, the government plans to introduce a new reporting obligation for buyers, known as the AOR requirement. Under these requirements, buyers will be obliged to report supply data for received invoices within 5 days. Additionally, e-invoices must comply with the EN 16931 European standard format. Since the invoice transmission channels will support automated processing and authentication, with appropriate encryption and security measures in place, e-mail distribution of invoices will no longer be permitted.

The documents also touch on the architecture of the e-invoicing system, which will follow a five-corner model. Under this model, sellers transmit invoices to the Tax Authority via their invoicing software or an accredited service provider. At the same time, buyers receive them through their accounting systems or their own service providers. Even though service providers, as intermediaries, can assist with invoice transmission, their involvement is not mandatory, and a taxable person can exchange invoices directly through their internal systems.

Conclusion

While the ViDA implementation document outlines the main directions, it does not present a detailed implementation plan and should not be considered a final position. Nevertheless, with the publication of this document, Hungarian officials noted the transformative effect of ViDA on Hungary’s VAT system. Moreover, they laid the groundwork for future documentation that will provide a more detailed implementation timeline and technical requirements.

Source: National Tax and Customs Office