In the last months of 2023, the Hungarian National Tax and Customs Administration(NAV) worked on preparing the last pieces of the project related to modernization of the NAV systems related to control, validation, and submission of VAT returns.
The Hungarian tax authorities acknowledge that making a significant step towards digitalizing their system is necessary, mainly based on submitting paper-based tax return forms.
One of the main priorities is to make VAT compliance less burdensome for taxpayers from the paper-trail-based traditional manner of reporting to make the entire process more transparent, efficient, and flexible.
Timeline
The taxpayers should be able to consult the VAT-related data gathered from various sources through their online account on the NAV portal starting from January 1, 2024.
They will have the opportunity to submit their first eVAT return through NAV e-VAT service starting from:
- February 1st, 2024 – if they submit a declaration monthly;
- April 1st, 2024 – if they submit a declaration quarterly;
- January 2025 – if they submit a declaration yearly.
Scope of changes
The modernization of the NAV tax reporting system opens the possibility for businesses and taxpayers to move from the traditional paper filing system towards the online system, where the return can be prepared, audited, and filed electronically.
To enjoy the benefits of the NAV portal, taxpayers should register and create an account on the website.
The eVAT system permits taxpayers to check in one place all the data that NAV has collected through the e-reporting channels, such as but not limited to tax registers of issued and received invoices, online cash register data.
Through the online services of eVAT, taxpayers can prepare the draft return, perform the auditing of the gathered data, use the risk analysis tool developed by the NAV(through errors and warnings checking system) to verify the validity of collected information, and if the draft return passes these verification steps, it can electronically submit the return.
The portal for online submission of VAT returns is reachable through an easily accessible user interface and machine-to-machine (M2M) communication.
Example-wise, through the API connection, economic operators should be able to use the data gathered by NAV web services, prepare the draft return, perform risk assessment, and submit the final version of the return in an almost entirely automatic manner.
Introducing the possibility for taxpayers to prepare, control, validate, and submit VAT declarations through online channels shall make the entire reporting procedure more transparent, less burdensome, and, without any doubt, more efficient.
The paper-based reporting system will remain an option, not the only channel for communication with the Tax Authority.
Aleksandar Delic
1stopVAT Senior Indirect Tax Researcher (Global Content)