From 1st January 2021, companies that do business in Hungary must comply with the new, updated RTIR (Real-Time Invoice Reporting). This update does not only include B2B E-Invoicing requirements, but further B2C E-Invoicing regulations, that are imposed by the NAV (Nemzeti Adó és Vámhivatal, National Tax and Customs Administration of Hungary, HU TA). From a technical point of view, an XML version 3.0 needs to be submitted to the NAV Online Számla platform, which will directly forward the XML to your customers. For you as an organization, this means that you need a future-proof SAP solution that can be easily managed and updated to ensure compliance on the long run and to avoid paying severe penalties for non-compliance.
As you may know from our first blog post about Hungary, an update was already planned for 2021, which now include a new XML format (version 3.0) with intra-community invoices and B2C invoices for the Hungarian E-Invoicing regulation. In this article, you can read why we recommend SAP Document Compliance for keeping your SAP system and E-Invoicing process compliant on the long run with the latest Hungarian E-Invoicing regulations.
A timeline: from the first B2B E-Invoicing made mandatory by the Hungarian NAV tax authority in 2018 to the current RTIR system and expected future updates
As mentioned in our previous blog post, Hungary was one of the early E-Invoice adopters. It started in 2018, as shown in the timeline below, with the first B2B requirements, which included an early machine-readable XML format (version 1.0). The purpose was to electronically transmit accounting documents, which exceed the threshold of 100.000 HUF (€320), in real time. However, invoicing and reporting were two different processes.
On the first of July 2020, the requirements extended to an update which implied a new XML format (version 2.0). It was now obligated to transmit tax-exempt transactions (except intra-community) and domestic transactions subject to reverse charge procedure. From then onwards the reporting threshold of HUF 100.000 VAT amount charged per invoice has been eliminated. Moreover, it became possible to see inbound invoices at NAV portal.
As of the first of January 2021, with a granted “grace period” until 31 March 2021, a new version 3.0 enters into force. The Hungarian tax Authority is adopting a strategy of quick adjustments, as version 2.0 was only introduced in 2020. Reporting includes invoices issued to individuals (B2C) as well as export and intra-community transactions. From 1st April 2021, when the soft-landing period ends, only the new XSD (XML Schema Definition, version 3.0) can be submitted and version 2.0 will no longer be accepted by NAV. In other words, from this date on penalties up to 500.000 HUF (€1.700) per invoice will be issued in the case of non-compliance.
Furthermore, we expect some other updates in the near further. We predict another update for the XML format (version 3.1 or 4.0). This could lead to changes in the structure of the data, additional data required on the XML, the obligation of some fields might change or the amount of char might change. Moreover, it has been said that around 2022, SAF-T will take into force, but there is no fixed date yet. However, the Hungarian government has always communicated that new SAF-T requirements will not influence the current E-Invoicing regulation. We will keep you informed via new blog articles when more information on future updates is known.
Because of those frequently updates, it makes sense to have a strategic partner who takes care of this, informs you on new updates and keeps your SAP system compliant with the latest version of the country-specific legal requirements. We recommend starting to make the necessary changes to your SAP system rather sooner than later. If you have any questions on your SAP compliance project, feel free to leave a comment or to request a web-meeting with one of our experts.
SAP Document Compliance as the solution to compliance with the Hungarian RTIR B2B E-Invoicing Update in 2021
In order to comply with the existing and new Hungarian RTIR E-Invoicing rules, I recommend a SAP solution, called SAP Document Compliance. SAP Document Compliance is a strategic, integrated SAP solution that works with SAP ECC and SAP S/4HANA and that makes your SAP accounting processes 100% legally compliant with the Hungarian rules.
SAP has developed this solution to not only comply with the Hungarian RTIR requirements, but also to ensure compliance with many other country-specific legal requirements all over the world, such as SII in Spain, SDI in Italy, CFDI and Complemento de Pago in Mexico, RTIR and EKAER in Hungary, DIAN in Colombia, E-Invoicing and E-Archiving in Turkey, MyDATA in Greece, etc. All the implemented country-specific legal requirements can be easily managed with the SAP eDocument Cockpit that takes a central role in SAP Document Compliance. With SAP Document Compliance, you have an end-to-end solution that automatically generates the required XML files based on source information from your SD or FI billing documents and digitally signs the XML file, when required. SAP Document Compliance can be connected with SAP CPI or with 3rd party EDI middleware systems to manage all data transmission with the local tax authority systems.
An additional benefit of using SAP Document Compliance is its flexibility. Several SAP BAdI’s (Business Add-Ins) are available to change the standard XML structure and PDF mapping, to change the e-mail content and the recipients, to partially automate the customer feedback process, etc. We have already adapted SAP Document Compliance to many different customer-specific cases. Please let me know in the Comments section below if you have a specific business requirement that needs to be implemented in your Hungarian SAP accounting process. I am happy to investigate how this can be integrated with SAP Document Compliance.
The SAP Document Compliance process flow for the updated RTIR B2B E-Invoicing requirements in Hungary
SAP Document compliance is a solution to make your SAP system compliant to the new RTIR B2B E-Invoicing requirements in Hungary for 2021. The following graphic illustrates the different end-to-end process steps that are implemented in SAP Document Compliance to achieve compliance with the RTIR E-Invoicing regulations:
- In the first step, you create a billing document in your SAP ECC or SAP S/4HANA system.
- The creation of this billing and related accounting document triggers an SAP eDocument in the built-in SAP eDocument Cockpit.
- Within your SAP system, the information from the eDocument is converted into the required RTIR XML format.
- Before you can submit the E-Invoice to the online NAV portal, the system needs to request a token from the Hungarian tax authority (NAV HU TA) to identify the transaction.
- In a next step, the Hungarian tax authority acknowledges the request and provides the needed token.
- Together with this token, the E-Invoice is transmitted in the correct XML data format to the NAV Online Számla platform. This can be done through different data transmission platforms, such as SAP PI, SAP CPI, but also through non-SAP EDI platforms.
- In case the NAV tax authority accepts the E-Invoice, they provide a registration ID for the relating invoice.
- This registration ID, together with the status (accepted/ rejected) of the E-Invoice flows back into your SAP system and can be monitored in your SAP eDocument Cockpit.
For compliance with the latest specifications of the Hungarian E-Invoicing rules, that will come into effect on 1st January 2021, SAP has already committed the needed OSS Notes adaptions to the SAP Document Compliance solution for Hungary. These SAP OSS Notes will update the XSD scheme and therefore also the mapping of the XML file. Furthermore, the value mapping for the required business mapping changes and fixed values for fixed, sometimes version-dependent information also needs to be revised and updated in SAP Document Compliance. Lastly, everything needs to be thoroughly tested to ensure 100% compliance.
The process-related and technical impact of the Hungarian RTIR E-Invoicing update of 2021 on your SAP system
In order to comply with the Hungarian RTIR regulations for E-Invoicing, you need to consider both the technical and process-related impact on your SAP system. The two biggest changes for organizations due to this regulation are:
- Version 3.0 offers the opportunity to complete invoicing and reporting in one step.
- The new XML scheme (XSD 3.0) can be used as a valid E-Invoice. Therefore, not only financial information will appear on the XML, but also all sales related information must be included. What will change on the XML format is explained in detail in the next paragraph.
As is shown in the figure below, in the current process (version 2.0) invoices are sent to the customers and at the same time reporting to the Hungarian Tax Authority takes place (step 1 + 2). This possibility is still available with the new XML scheme (XSD 3.0), but there is also the chance to simplify the process.
With the new XML scheme (XSD 3.0) the invoicing towards customers and the reporting towards the Hungarian Tax Authority can be done in one step, as is shown in the process below (only step 1). There will not only be more mandatory fields, but it will also become crucial to take in to account your customers’ requirements.
This new possibility of E-Invoicing has many advantages such as:
- Organizations don’t need to spend time on correcting invoices that have been sent to the customer while these are not accepted by NAV.
- Customers have the guarantee that the invoices they receive are validated by NAV.
- Customers receive their invoices from one central platform which will simplify their incoming invoice process.
With the update to version 3.0 organizations can use real-time reporting as E-Invoicing between businesses. In other words, XML invoices which have been submitted by companies can be downloaded by their customers. In this case, the supplier must provide the full data content of the invoice instead of only some mandatory fields.
Regarding the new XML schema version 3.0, reporting will include invoices issued to individuals (B2C), export and intra-community transactions as well.
What will change on the XML Version 3.0 update for mandatory 2021 RTIR E-Invoicing in Hungary?
From a more technical point of view, the update to version 3.0 will cause changes to the XML format that need to be managed to comply to these new regulations. Generally, more predefined fields are required as of version 3.0 in the XML, such as the order number or bank account. Moreover, there are also predefined fields for company information, item numbers, contract numbers, etc.
In addition to these predefined new fields, it is also possible to particularize the serial number, the date of completion of the advance payment invoice and the applied exchange rate. Furthermore, it is not possible to enter more than one tax number for seller or buyer in the new XML scheme. Finally, there will be new codes indicating the reasons for VAT exemption.
In case the buyer is an individual, personal information, such as the name and address, cannot be specified in the new XML file. Because of data protection and privacy reasons, the NAV will refuse such invoices.
How PIKON as your strategic partner can help you with your SAP compliance project for RTIR E-Invoicing in Hungary
PIKON has developed a Competence Center for Legal Requirements, which researches country-specific legal requirements all over the world and their impact on your SAP system. Because of that, we can ensure that your SAP system and business processes comply with these different country-specific legal requirements. Our team of experts combine SAP expertise and in-depth knowledge of the end-to-end legal processes and technical requirements of the Hungarian RTIR regulations and other legal requirements. Our consultants have gathered this experience thanks to the many SAP Document Compliance and local implementation projects we have done all over the world. Examples include SDI in Italy, SII in Spain, CFDI and Complemento de Pago in Mexico, RTIR and EKAER in Hungary, XRechnung and ZUGFeRD in Germany, E-Invoicing and E-Archive in Turkey, DIAN in Colombia, MyDATA in Greece, etc. We have also created our own SAP Compliance Add-Ons for MTD VAT in the UK and the VAT Whitelist in Poland to ensure we offer clients the best suitable solution.
Because we care about our customers and want your company to focus on your daily business, we also follow-up on new and changing legal requirements relevant to your company. If any action in your SAP system is needed, we will inform you and offer our support. That way, you save the time to research this yourself and are ensured that your SAP system remains compliant to necessary regulations.
If you have further questions about the Hungarian RTIR E-Invoicing update of 2021, or on how we can help you achieve compliance in your SAP system, please ask in the Comment section or request a web-meeting with us.