E-Invoicing in Hungary: 2020 update with SAP Document Compliance
As from 1st July 2020, companies that are doing business in Hungary need to comply with the new, updated RTIR (Real-Time Information Reporting) B2B e-invoicing requirements 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 2.0 needs to be submitted to the NAV Online Számla platform. For you as an organisation, this means that you need to adapt your current SAP solution.
As you may know, these new requirements are an update of the existing RTIR B2B real-time e-invoicing regulations that became mandatory on 1st July 2018. With this 2018 legislation, the Hungarian NAV National Tax and Customs Administration were one of the early adopters in Europe to make an e-invoicing rule mandatory for conducting B2B transactions. According to an official report from the Hungarian Ministry of Finance, the Hungarian VAT GAP has decreased by 12% after the introduction of this RTIR e-invoicing regulation. This proves that Hungary has made good progress in fighting tax evasion and will launch more initiatives in the future to finetune their legal e-invoicing requirements and combat tax evasion even further. For you as an organisation, 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. Further down below in this article, you can read how SAP Document Compliance keeps your SAP system and e-invoicing process compliant on the long run with the latest Hungarian e-invoicing regulations.
How the RTIR system from the Hungarian NAV tax authority made B2B E-Invoicing mandatory as from 2018
In 2018, the original Hungarian RTIR E-Invoicing model came into force and stipulated that all companies that are registered in Hungary are obliged to issue e-invoices for domestics B2B transactions with an invoiceable amount exceeding HUF 100.000 (this equals to about EUR 320). According to the RTIR model from the Hungarian NAV tax authority, the e-invoices needed to be issued in the RTIR XML Version 1.1 format and had to be submitted for approval to the NAV Online Számla platform of the Hungarian tax authorities. Only after approval by the NAV, these e-invoices were considered legally binding.
What will change in the 2020 XML Version 2.0 update for mandatory B2B E-Invoicing in Hungary
As from 1st July 2020, the new requirements need to be implemented in your SAP system to fully comply with the new update of the RTIR model.
Which RTIR E-Invoicing requirements actually change on 1st July 2020?
- An e-invoice needs to be created for all invoices, credit notes and debit notes, regardless of the invoiceable amount. This means that the lower limit value of HUF 100.000 will be removed.
- The structure of the invoice XML scheme will change. This requires an update of the XSD schema that is used for mapping. The following fields in the XML structure are affected by this:
- For several of the fields above, the mapping between the business data and the values of the NAV tax authority need to be revised.
- The structure of the cancellation XML scheme has changed. This also requires an XSD schema update.
Note: also after 1st July 2020, export invoices, B2G invoices and B2C invoices are still excluded from the Hungarian RTIR e-invoicing rules. The new e-invoicing requirements will still apply only to B2B transactions.
In 2021, another e-invoicing update is planned by the NAV. In that phase, intra-community invoices and B2C invoices will also be included in the Hungarian e-invoicing regulation. As soon as all details are available, I will investigate them and post my findings on how to implement them in SAP in a new blog post. Please let me know in the comments section below if you want me to inform you as soon as more information on the 2021 Hungarian e-invoicing updates become available.
Hungary RTIR E-Invoicing update 2020: process-related and technical impact 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 ERP system.
From a technical point of view, the new upcoming updates require e-invoices to be issued in the new required XML format (version 2.0) and to be automatically submitted for approval to the NAV Online Számla platform. Compliance with this is ensured by implementing new technical changes in your SAP system. Non-compliance will result in a severe penalty, which can be paying a fine of up to HUF 500.000 per invoice (this equals to about EUR 1.700).
From a process-related point of view, not all invoices need to be submitted electronically: e.g. export invoices are excluded from the Hungarian RTIR e-invoicing regulation. Therefore, it is important to distinguish between your different customers. This logic eventually also needs to be technically implemented in your SAP system before e-invoices are automatically triggered and transmitted to the NAV HU TA portal.
Furthermore, the technical changes also need to be integrated with the business process adaptions. As such, as part of the new Hungarian 2020 update, some business data needs to be mapped correctly to generate a legally binding electronic invoice.
How SAP Document Compliance makes you compliant with the Hungarian 2020 updates for RTIR B2B E-Invoicing
In order to comply with the existing and new Hungarian RTIR B2B E-Invoicing rules, SAP provides a solution in SAP Document Compliance. SAP Document Compliance, formerly known as the SAP eDocument Solution, is 100% integrated in SAP ECC and SAP S/4HANA and provides a fully automated end-to-end solution for compliance with many country-specific legal requirements worldwide that make it mandatory for you as a company to issue tax information in an electronic format to the local tax authorities. SAP Document Compliance is a lean SAP solution that can be easily adapted to comply with updates to legal requirements, such as the new upcoming Hungarian e-invoicing requirements that become mandatory from 1st July 2020. Therefore, it is a strategic SAP solution that ensures compliance on the long run and enables you to manage and monitor the different implemented legal requirements from within one centralized SAP cockpit, the SAP eDocument Cockpit.
In the SAP Document Compliance solution (also known as the SAP eDocument Solution), compliance with the RTIR e-invoicing regulations is covered by the following process steps:
- 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 July 2020, SAP has already committed the needed adaptions to the SAP Document Compliance solution for Hungary. In case you are already using SAP Document Compliance for Hungary, new SAP OSS Notes with the required changes need to be implemented. 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. Next, everything needs to be thoroughly tested to ensure 100% compliance.
The necessity to adapt and update your current e-invoicing solution for Hungary to ensure compliance with the 2020 updates (and keeping the upcoming 2021 updates in mind) can be a great opportunity to review and investigate the limitations of your current solution and potentially switch to a strategic, future-proof solution, such as SAP Document Compliance. This integrated SAP solution can play a key part in your strategic roadmap to manage and monitor compliance with different country-specific legal requirements all over the world.
Why start your e-invoicing project in Hungary with PIKON?
With our Competence Center for Legal Requirements, we are a strategic partner who ensures that your SAP system and business processes meet different country-specific legal requirements all over the world on the long run. We have a team of experts that combine SAP expertise and in-depth knowledge of the end-to-end legal process and technical requirements of the Hungarian RTIR E-Invoicing regulation.
With PIKON as your partner for making your SAP system compliant with the Hungarian RTIR E-Invoicing regulations, you can rely on:
- Strong expertise of the Hungarian RTIR E-Invoicing regulations and relevant project experiences.
- A team of experts that combine SAP expertise with in-depth knowledge of the specific legal process and technical requirements for Hungary.
- With SAP Document Compliance, we will implement a future-proof, fully automated end-to-end solution that ensures compliance on the long run.
- A fast implementation with a transparent cost estimation model. We are among the fastest implementation partners on the market with a guaranteed project success and no hidden costs.
- Project ownership: we take care of the entire project in close coordination with your people.
- Expert recommendations. We analyze the perfect solution scenario together with you.
- We have many satisfied customers in this area and have executed many successful implementations of SAP Document Compliance.
- A Competence Center with strong expertise in the field of legal requirements all over the world.
- A strategic one-stop shop partner that is able to make your SAP system compliant with other current and upcoming (inter)national legal requirements.
- In-house functional and technical know-how/ project experiences that are essential for all the necessary SAP modifications for this project.
- Our long-term partnership with SAP enables us to provide important and relevant information at first hand.
- More than 20 years of SAP experiences.
- We provide experts that combine IT and Business know-how with strong Change Management skills to make your project a real success.