VAT Return 2025: Changes in the Domestic Summary Report and the Arrival of ViDA

Starting from 2025, companies are expected to also account for changes in the domestic summary reports (M-sheets).
The proposal was introduced as part of the autumn tax package to ensure that
the Hungarian Tax Authority receives more accurate data on domestic transactions.

Recently, the ViDA (VAT in the Digital Age) package was also approved,
which brings significant changes for both Companies and Authorities.

Table of contents:

I.  Filling M sheets: exact sum instead of rounding         

     I.1. Is your VAT return ready for the digital age?

     I.2. How can we assist you in successfully transitioning to M2M connectivity?     

II.   What changes does the approval of the ViDA package bring?              

     II.1. Unified electronic invoicing

     II.2. Digital reporting instead of summary declaration     

     II.3. One-time VAT registration and general reverse charge taxation

     II.4. Reform of the platform economy, one-stop-shop system

I. Filling M sheets: exact sum instead of rounding

Under the new legislation, the current process of reporting rounded net and VAT amounts in thousand-forint increments on M-sheets will be replaced by reporting amounts in whole forints without rounding. This provision facilitates easier comparison of the amounts reported on M-sheets with the partner’s online invoice data submissions.

I.1. Is your VAT return ready for the digital age?

Thanks to digitalization, manual VAT returns are becoming less common, with various programs and macros enabling faster and more accurate completion. However, these systems need to be developed to meet the current requirements.

Given the tight deadline, it is advisable to start updating the programs to ensure that the new reporting requirements can be met from 2025. The developments should be carried out in such a way that the previous option for rounding to the nearest thousand forints remains available, as the VAT return forms will remain unchanged for filings before 2025, and this option may still be necessary, for example, during a self-revision.

We would also like to draw everyone's attention to the fact that the Hungarian Tax Authority is increasingly encouraging taxpayers to use the e-VAT system. This is because using the system exempts taxpayers from the obligation to fill out M sheets.

I.2. How can we assist you in successfully transitioning to M2M connectivity?

• With our M2M software;
• Pre-implementation consulting;
• Advisory services for developing a new system;
• Reviewing your existing system to assess compliance with legal regulations;
• Examining the NAV online invoice data reporting, checking its completeness, interpreting error messages, and providing suggestions for corrections;
• Reviewing existing XML files to ensure compliance with legal requirements.

II. What changes does the approval of the ViDA package bring?

The ViDA package was adopted on 5 November 2024 and only needs the approval of the European Parliament.

The main goal of the measures is to modernize the VAT system, harmonize regulations among member states, increase transparency in the economy, and reduce tax fraud.

The following measures contribute to this goal:

• Standardization of electronic invoicing and expansion of its use;
• Digital data reporting for cross-border transactions;
• Development of new regulations, primarily concerning the platform economy;
• Introduction of one-time VAT registration.

II.1. Unified electronic invoicing

The ViDA package changes the definition of electronic invoices and introduces a standardized invoice format to be applied at the member state level. It also extends electronic invoicing to include intra-community sales invoices.

We note that, starting in 2025, a part of e-invoicing will be introduced in Hungary, albeit indirectly. Amendments to Government Decree 273/2007 (X. 19.) on the implementation of certain provisions of Act LXXXVI of 2007 on electricity, as well as Government Decree 19/2009 (I. 30.) on the implementation of provisions of Act XL of 2008 on natural gas supply, mandate compulsory e-invoicing for utility service providers (electricity and natural gas). This means that all companies receiving invoices from such utility service providers will be required, starting next year, to receive and archive these documents in accordance with the rules governing e-invoicing. We believe this is only the first step by the government toward the broader implementation of e-invoicing, with further developments expected in the future.

II.2. Digital reporting instead of summary declaration

The DRR (Digital Reporting Requirements) system is expected to be introduced in 2028, making invoice data reporting mandatory for Community transactions as well. This concept is already familiar to Hungarian companies; however, the current system will be standardized based on a unified European framework. Data reporting must be completed within 3 business days from the posting date in the taxpayer's accounting records or from the date the invoice should have been issued.

Since companies will be required to provide data on invoices to the authorities, the submission of the EC List (A60 form) will no longer be necessary.

II.3. One-time VAT registration and general reverse charge taxation

The aim of the measure is to reduce administrative tasks and eliminate VAT registration requirements in member states. As a result, the simplification related to customer stocks will be abolished as of June 30, 2028. This simplification currently allows a seller from another member state to hold a customer’s stock in a different member state without being registered as a taxpayer there.

This does not exclude the possibility of selling in other member states without registration: the new rules introduce a general reverse charge system. Under this system, if VAT is due in the buyer's member state and the seller is not VAT-registered there, but the buyer has a VAT number, the VAT obligation will simply be fulfilled by the buyer through reverse charge taxation.

II.4. Reform of the platform economy, one-stop-shop system

An important change is that the one-stop-shop system will be extended to include the transfer of own goods to another member state, with these acquisitions being VAT-exempt in the destination country. In such cases, the taxpayer will register in their home member state and fulfill their reporting obligations there.

For the mediation of accommodation services provided by VAT-exempt taxpayers (e.g., via Booking.com) and passenger transport services (e.g., via Uber), platforms will not become liable for VAT payment.

Similarly, platforms that qualify as small businesses under EU regulations will also not be liable for VAT payment.

***

If you have any questions regarding this newsletter,
please feel free to contact our tax advisory colleagues!

Stay up-to-date with tax changes!

Follow our newsletter, where we continuously provide updates
on the latest information and changes.

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