VAT Hungary: New era in Hungarian VAT compliance

On 1 January 2024, the Hungarian Tax Authority (HTA) introduced a new electronic VAT system, eVAT (eÁFA). It offers taxpayers various electronic services to streamline and automate the preparation of their VAT returns. The Ecovis experts explain the details.

eVAT provides a range of innovations to simplify compliance, reduce administrative burdens, and enhance accuracy in VAT reporting. Moreover, the introduction of machine-to-machine (M2M) functions, enabling direct electronic data integration from taxpayers’ ERP databases, signals the beginning of a new era in Hungarian VAT compliance.

What the new M2M functions mean for companies

The new M2M functions can manage a virtually unlimited number of invoices and allow the automated, direct submission of VAT analytics to the HTA. Once received, the data can be reviewed and the HTA will provide observations in the case of any discrepancy, without imposing penalties. According to the HTA, electronic VAT compliance will not only enhance the taxpayers’ reporting process but will also contribute to the HTA’s automated risk analysis.

Our experts will implement the M2M-based electronic VAT system for you so that you can meet the requirements.

László Kelemen, Partner, ECOVIS Tax Solution Hungary, Budapest, Hungary

However, setting up the M2M link gives rise to complex tax advisory tasks and IT development which require in-depth expertise and comprehensive planning. As a result, VAT professionals have played a vital role in ensuring that taxpayers’ ERP systems are capable of handling and are compatible with the M2M framework data formats and that the schemas and VAT-codes follow the HTA’s definitions.

Although the new M2M mechanism is not mandatory, there is already significant interest among Hungarian taxpayers, as it will significantly simplify the current process. It is also expected to attract interest from other EU Member States as digital VAT compliance gains international prominence.

For further information please contact:

László Kelemen, Partner, ECOVIS Tax Solution Hungary, Budapest, Hungary
Email: laszlo.kelemen@ecovis.hu