Itemized domestic VAT return: only three months left to prepare!
An obligation to supply more detailed data and extended data content - this is what awaits Hungarian companies in VAT return filing from the beginning of next year. In June 2012, the Parliament accepted the amendment relating to the itemized tax returns, which will enter into force on 1 January 2013. Companies have three months left to prepare for the implementation of the new rules.
Itemized VAT return coming!
The main point of itemized VAT return filing is that from 1 January 2013 taxpayers will have to declare in their VAT returns the data of their invoices relating to domestic, directly taxed supplies or acquisitions of goods and services with a value exceeding HUF 2 million. Accordingly, the VAT returns will have to report in detail:
the tax number of the partner,
the serial number of the invoice,
the tax base and the recharged VAT shown on the invoice,
the date of supply shown on the invoice or, in the absence of a date of supply, the date of issuing the invoice.
The taxpayers acquiring goods and services will have to indicate the tax number of their partner and the amount of the recharged tax even if the HUF 2 million limit is not exceeded by the amount of one invoice but the aggregate amount of a number of invoices accepted during the same period from the same partner, which will require special care. The draft of the instructions of the tax return provides detailed information on how referenced business events have to be shown in the draft tax return.
The draft of the so-called itemized aggregate domestic VAT report is already available on the website of the Hungarian Tax and Customs Authority. The documentation will consist of a main sheet with the form no. 1365M and the main attachments relating to this sheet (forms no. 1365A-01-05 and main sheet no. 1365A). According to current plans, these forms will apply the so-called batch document form taxpayers are already familiar with from the tax return type %u201808.
A note to accounting managers: prepare your business administration software!
The three months left until the change is a rather short time for the preparation of the business administration software for the expected modifications as the data supply obligation may cover hundreds or, in certain cases, thousands of transactions even in the case of medium-sized companies. If the volume of data is substantial, there will be no time later for manual data recording and if the tax return contains an error, this may imply a default penalty of up to HUF 500,000. Still, we hope that the Hungarian Tax and Customs Authority will act fairly in the initial phase of the data supply.
Information is already available in relation to the itemized data supply as to the data form, which also contains the draft of both tax and common identification codes. The users of business administration software will have to make sure that the necessary developments have already started or, if they use own software, they will have to start developments as soon as possible.
Our company has already started the necessary developments in relation to our accounting outsourcing service, the cloud based services we provide will, therefore, already be suitable for automatic data supply before the end of the year.
Data content of invoices to change from 2013 also
Currently, invoices only have to show the tax number of the taxable person acquiring the goods or services if this party is obliged to pay the tax (i.e. in the case of reverse taxation) including intra-Community acquisitions also. However, from 1 January 2013, the tax number of the taxable person partner will also have to be indicated in the case of comprehensive transactions if the amount of VAT recharged in a domestic VAT transaction reaches or exceeds HUF 2 million.
Source: RSM DTM Hungary