Invoices in Hungary
Invoices in Hungary must comply with some rules that you must be aware in case you wish to keep your Hungarian company compliant.
If you are planning to start a business in Hungary, or you already have formed a company and started the activity you should be aware of the rules of issuing invoices in Hungary.
How to issue invoices in Hungary orderly?
You must issue an invoice for any activity after completion (whether the provision of services or the sale of products, trade, agency), which includes the net consideration (this is the turnover or revenue of your business) and the value added tax if it is for a domestic company or individual.
If you issue an invoice into another company of the European Union or into a third country company outside it, different rules apply, you can invoice Hungarian VAT free under certain conditions.
These are the general rules
Mandatory content elements of an invoice in Hungary:
– supplier / Seller (company) name, address, tax number, (bank account number)
– buyer / Buyer (company) name, address, tax number
– Invoice name (invoice, proforma, advance invoice, credit invoice)
– sequence number (it is generated automatically by the invoicing software)
– invoice date / date of issue
– date of Completion / tax point date
– payment deadline / due date
– method of payment (bank transfer / card / cash)
– name of the product / service, quantity, unit price, net value, VAT value (if any), gross value
– other details (reference number, PO, conditions of delivery, etc.)
– in case of an invoice issued in a foreign currency, the currency, the daily rate of the Hungarian Central Bank (MNB) officially notified to the tax authority, the VAT value in Hungarian forint.
– In case of a tax-free invoice, reference to the relevant section of the Hungarian VAT Act.
Compliant invoicing software
A Hungarian company can only invoice with an invoicing software reported to the tax authority in accordance with the Hungarian Accounting Act and the current taxation rules.
The invoice must be issued upon completion of the delivery of the product (delivery of the product to the buyer / end user) and provision of the service, but no later than within 8 days from the completion.
On 1st July, 2018, the Hungarian rules of invoicing were tightened, according to which the invoicing program used by the Hungarian company must have an online connection with the Hungarian tax authority.
Immediate Tax reporting obligation
From 1st July 2020, all invoices issued to Hungarian companies must be reported immediately and automatically to the Hungarian Tax Authority without any human intervention. If you use an invoicing software, the developers have already built this feature into the program, and the report will be made automatically as soon as the invoice is issued, regardless of the amount of the VAT.
If we issue a tax free invoice (material-free or subject-free) to a domestic company, the reporting obligation still applies.
Invoices issued to individuals are still not subject to reporting obligations.
Replace your manually issued invoices today!
For customers who have still been using manual invoices in Hungary, we recommend switching to billing software to reduce administrative burdens.
Don’t you have billing software yet and you don’t know how to start your search? Ask ProacTeam Hungary for help in your selection. Contact us and ask for a quote today.
We connect your existing invoicing software with the NAV, our experts have their technical knowledge at your disposal, we can connect any invoicing programs with the Hungarian Tax Authority. Ask for our help, ask for a quote today.
Do not forget, to reduce risk of non-compliance, engage a qualified and experienced Hungarian accountant who is aware of all aspect of HAS (Hungarian Accounting Standards) and can navigate your company through the bureaucracy of taxation rules. We at ProacTeam are all fluent English speaker accountants and tax advisors in Hungary with impressive experience in accounting and taxation field, so you are at the best place.
