Hungary introduces the e-receipt and e-cash register in 2024!

The current Hungarian cash register system is facing a major restructuring. Soon, from July 2024, it will be possible to use the e-register machine, so receipts can also be issued electronically. Consumers will be able to access their receipts via an application. The system will go live after a test period of several years.

The introduction of the new system could trigger additional costs and work for businesses from a tax and accounting point of view, as well as technical and data protection issues. On the other hand, it could also have a waste-reducing and economy whitening effect as well as helping to reduce the use of cash.

The e-register (ePG) system will replace the traditional physical hardware-based cash registers connected online to the Tax Authority (NAV), opening the possibility of using a software-based or even cloud-based system. The electronic cash register will, by default, issue the receipt electronically. When using an e-register, a paper copy will only be issued to the cashier at the explicit request of the customer. The new e-cash register and e-receipt system is therefore intended to fully replace the former paper-based receipting system by taking the place of the current, computer-based, manual receipting online register system, which is predominantly paper-based.

The process of issuing e-receipts will be as follows: the consumer opens a QR code on the app, which is scanned at the checkout. After the purchase, the receipt will be uploaded to the receipt repository at the NAV and the documents will be downloadable from there. By 2028, all traders should be able to issue e-receipts.

Under the new rules, the range of mandatory information to be included on receipts will be extended compared to the current rules. It will also be possible to issue adjustment vouchers in the same way as invoices.

The electronic cash register system can be beneficial for those who either do not wish to use a traditional cash register machine because they want to integrate the receipting process into their business management systems or are considering developing their own application.

Data on e-receipts will also have to be provided to the tax authority. The tax authority currently has real-time access to around 2 million computerised invoices per day, while data from manual invoices (around 20,000 per day) are received with a delay of a few days.

Among receipts, currently ‘only’ receipts issued from online cash registers (around 10 million per day) are visible to the tax authority within one day of issue. Computer-issued receipts and manual receipts are currently still outside the sight of the tax authority. This information gap is currently being filled by sectoral data reporting obligations in the tourism and hospitality sectors. However, with the introduction of the e-register, e-receipt system, it is expected that sectors currently on the 'shady side' of the economy will also be in the spotlight, as the tax authority will see e-receipt data in real time and on a transaction-by-transaction basis.

From a data protection point of view, it is important that the customer remains unidentifiable and cannot be profiled by others based on the e-register data collected. It is expected that the system will be designed in such a way that the tax authority will not have access to the customer's data, but the trader will have access with the customer's consent.

The new system can therefore contribute to customer awareness by allowing customers to review their previous purchases and can also be statistically useful for traders.

Rules for the new system have been enacted at legislative level, while detailed rules will be announced by government decree. The procedural rules already promulgated will enter into force from 1 July 2024, while the rules on e-receipts will enter into force from 1 January 2025.

At this stage, it is not yet known for which taxpayers and for which activities the use of the e-register system will be mandatory, and under which conditions it will be possible to shift from the current online cash registers.

Despite the uncertainties of the timing, it is worthwhile for businesses to assess and consider the benefits of the new system and how to take advantage of it early on.

*** 

Should you have any questions regarding this newsletter,
the tax experts of VGD Hungary will be pleased to assist you.

This newsletter provides general information and does not constitute tax advice.