E-invoicing will be mandatory for electricity and natural gas trading companies regarding all invoices issued to non-residential users. The current text of the VAT Act requires the invoice recipient to provide preliminary consent for the use of e-invoicing. This latter rule will also change, as confirmed by the ViDA (VAT in Digital Age) proposal package, which was politically approved last week and is likely to be announced in December.
The package is expected to amend the EU VAT Directive by allowing member states to forego obtaining customer consent in the case of domestic transactions if e-invoicing is mandatory.
Accordingly, starting in 2025, businesses may receive their public utility bills digitally even if they have not granted their preliminary consent. If Hungary would like to continue to expand the range of e-invoicing, it will be able to do so freely starting from 2025.
Adopting the ViDA package also means there will be no stopping the process: starting from 2030, all suppliers will be required to use e-invoices issued in line with EU standards for all cross-border transactions, and invoice recipients will be required to accept such invoices.
Regarding the tasks of invoice recipients, the VAT Act requires that e-invoices be retained electronically. The principles specified by the VAT Act shall be guaranteed throughout the end of the retention period (eight years, according to the Accounting Act): the authenticity of the origin of the invoice, the integrity of its data content, and the legibility of the document.
Separate legislation prescribes the manners by which these requirements can be met. These set forth the rules, sometimes detailed and sometimes general guiding principles, for each archiving solution. The tax authority may also inspect these in the framework of official tax authority audits. Generally, it can be determined that a digital archiving solution that complies with relevant legislation requires a coordinated accounting, tax, and IT approach, especially concerning the complexity of the rules and, in many cases, the nature of the framework.
However, e-invoicing may also result in easier administrative tasks over the long term, allowing businesses to enjoy possible savings (for example, in document storage fees and mail costs). Moreover, legislative provisions also enable taxpayers to retain existing paper-based documents in digital formats if the digital conversion also ensures the guarantees prescribed by law.
Based on the above, an important conclusion is that businesses not yet ready for e-archiving should review the available possibilities for digital document archiving as soon as possible. Businesses that are already able to manage and store e-invoices are strongly advised to ensure that their systems are legally compliant.
This article was first published in the Budapest Business Journal print issue of November 29, 2024.
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