From 1 July 2018, taxpayers are as stated earlier obliged to provide within 24 hours invoice data for domestic transactions with a minimum VAT amount of HUF 100,000 (approximately 322 EUR).
When invoicing takes place using an accounting/billing program, the invoice information has to be transmitted immediately from the billing program to the National Tax and Customs portal (NAV) without human intervention, via public internet, shortly after the invoice has been issued. Taxpayers who do not send the data online immediately will be subject to tax penalties.
The ERP system must be able to detect sales invoices meeting reporting requirements: the minimum VAT amount. To be able to comply with the requirements and provide the data on in time, a taxpayer needs to develop either tooling or purchase a solution.
SAP health check: data in SAP incorrect and incomplete!
Although we offer a fully SAP-integrated solution in SAP itself to submit required data in an automated way, it is essential to review whether the data in SAP itself is correct and complete. The Key Group has recently delivered its Hungarian SAP health check pilot for one of its major clients, and the outcome was that quite some changes in SAP had to be made to avoid either future questions by the tax authorities or announcement of a tax audit when data is submitted mid-2018.
Please keep in mind that the Hungarian tax authorities are aware that SAP setup itself is often not in order and that tools outside the ERP system are used to remediate and manipulate tax data outside of SAP with the purpose to improve tax reporting. The full automated legal requirement is to force taxpayers to remediate the ERP VAT setup itself and realize that taxpayers do not use workarounds as Excel sheets or similar tools outside the ERP system as human intervention is not allowed.
When the definitive EU VAT system becomes in force - expected in 2021 - these data requests become even more critical. The local tax authorities will use the acquired tax data to check whether sufficient tax revenue is received from the other Member State(s).
Based on this pilot we have designed an efficient and effective assessment process that will include not only an overview of gaps but as well our view of how to remediate these gaps in SAP itself.
The Key Group offers an SAP health check specifically on the Hungarian legal requirements defined in XML format:
- Disclose all SAP setup gaps that need remediation to avoid incorrect and incomplete data during submission of data
- Identify areas for improvement, which would be necessary for real-time invoice reporting:
- Type of billing documents
- Details of invoices,
- Etc.
Submitting all data is in practice only allowed when a risk assessment - SAP VAT health check - is performed, and any material tax risks found is remediated. Disclosing invoices without such assessment for invoice data below the VAT threshold can result in (extra) financial risks. All discrepancies will lead to incorrect data supply. According to provisions related to HU RTIR, the Hungarian tax authorities will raise tax penalties from taxpayers who fail to fulfill their obligation to submit data or delayed incomplete, erroneous or incorrect data content. The tax penalty is HUF 500,000 per invoice.
Every company that has to meet these Hungarian requirements have to ensure that incorrect and incomplete tax data in SAP itself has to be fixed first to realize that validation of submitted data via tooling results in a positive validation by the Hungarian tax authorities. Contact us if you like to know more about the executive summary of our findings of our SAP health check for own benchmark purposes.
SAP add-on for e-invoicing via clearance model
KGT SAP add-ons for SAF-T, e-invoicing and MTD UK for VAT work as a standalone application within the SAP system and does not change existing customer SAP functionality or processes. It is fully configurable with custom namespace /KGT.
KGT partnered up with SAP regarding 'SAP Advanced Compliance Reporting for SAP HANA'. The 'Advanced Compliance Reporting' (ACR) service enables you to configure, generate, analyze, and electronically submit statutory reports that contain indirect taxes, such as value-added tax.
KGT provides also S/4 HANA transformation support.
