As of 1 July 2021, one of the significant changes regarding VAT is that the Hungarian tax authority will propose undertakings a draft VAT return. The first draft VAT return will cover the VAT return period for July 2021.
The draft VAT return (eVAT) will be based on the invoice data received through the NAV Online Invoice System, so we can be sure that it will not contain all the data in such a way that it complies with the provisions of Act CXXVII of 2007 on Value Added Tax.
There are various reasons for this.
Only invoices with a place of supply of goods and services in Hungary are uploaded to NAV Online Invoice System. Accordingly, the draft return will include the payable tax and tax base on the basis of invoices issued by the taxpayer and the deductible tax and tax base on the basis of invoices issued to the taxpayer by another resident taxpayer.
The draft return will not include, inter alia, details of services and supplies of goods provided by a taxable person established in another Member State of the Community, details of services provided by a taxable person from a third country and VAT paid by way of importation of goods.
In addition, the VAT Act provides for special rules according to which the VAT of certain items may not be deductible or only a certain part of the VAT may be deductible. Furthermore, certain rows of the VAT return require details of certain economic events and transactions that require specific knowledge of taxation, accounting, and business operations.
The proposed draft VAT return will be “only” a draft because the participation of the undertakings is required for it to become final. The accepted VAT return must match the data in the undertaking’s books. As a result, the undertaking is not exempted from its accounting obligations.
Information on the technical details of the draft VAT return is not yet available on the Hungarian tax authority’s website.
Pursuant to Section 184 of the VAT Act, the Hungarian tax authority shall make available the draft VAT return from the twelfth day from the end of the taxable person’s tax period via the electronic interface provided for this purpose, i.e. for the first time from 12 August. The draft VAT return accepted by the taxable person is considered final, so the rules governing the VAT return also apply to the accepted draft.