No RTR penalties for foreign e-commerce in Hungary until July 2021

Hungarian RTR updates

As previously announced in October, the Hungarian tax authorities granted a grace period in implementing the new version of real time reporting (RTR) until 31 March 2021.

In practice, foreign distance sellers who do not require a VAT number in Hungary after OSS (One-Stop Shop) is introduced will not have to comply with the Hungarian real time reporting obligation. Recently, the tax authorities in Hungary published a bulletin clarifying some points regarding distance sellers who plan to utilize OSS.

What is OSS?

OSS, or One-Stop Shop, is an EU-wide e-commerce package that has a tentative start date in July 2021. With this regime, normal distance selling rules and VAT treatment will no longer apply. Instead, distance sellers have the option to VAT register in one Member State and submit one consolidated VAT return for their sales in all Member States.

This will have great benefits for non-EU sellers as well, as they will be able to register in the Member State of their choosing. It is important to note that if a company is holding stock in another Member State, they will not be able to participate in this regime (in this sense, the regime will also not apply to the Pan-European program of Amazon).

Exemption from real time reporting for OSS distance sellers

The Hungarian tax authorities clarified that companies planning on joining the OSS regime in July 2021 will be exempt from the RTR obligation. The current grace period is in place until 31 March 2021 for businesses to implement real time reporting into their current business practices. The bulletin explained that companies who are planning on joining OSS will have a further extension until 30 June 2021.

Who is eligible for the exemption?

Only foreign distance sellers that are not established in Hungary and that have joined the OSS scheme by 1 July 2021 will qualify for the exemption. All other businesses, whether possessing a Hungarian VAT number or not, that do not register for OSS and carry out sales in Hungary to private individuals will have to adhere to the normal RTR rules. In other words, the extension of the grace period does not apply to B2B sellers.

Marosa’s solution

Real time reporting can be complex, as it requires invoicing programs that are compliant with local requirements. Marosa has developed a tool to ease RTR obligations in Hungary. This tool will automatically integrate with your billing program to record and report invoice data to NAV system and allows Excel uploading as well.