Hungarian SAP health check: data in SAP incorrect and incomplete!

From 1 July 2018, taxpayers are as stated earlier obliged to provide within 24 hours invoice data for domestic transactions with a minimum VAT amount of 100,000 HUF (322 EUR).

Although we offer a fully SAP-integrated solution in SAP itself to submit required data in an automated way, it is essential to review whether the data in SAP itself is correct and complete.

The Key Group has recently delivered its Hungarian SAP health check pilot for one of its major clients, and the outcome was that quite some changes in SAP had to be made to avoid either future questions by the tax authorities or announcement of a tax audit when data is submitted mid-2018.

Please keep in mind that the Hungarian tax authorities are aware that SAP setup itself is often not in order and that tools outside the ERP system are used to remediate and manipulate tax data outside of SAP with the purpose to improve tax reporting.

The full automated legal requirement is to force taxpayers to remediate the ERP VAT setup itself and realize that taxpayers do not use workarounds as Excel sheets or similar tools outside the ERP system as human intervention is not allowed.

When the definitive EU VAT system becomes in force - expected in 2021 - these data requests become even more critical. The local tax authorities will use the acquired tax data to check whether sufficient tax revenue is received from the other Member State(s).

Based on this pilot we have designed an efficient and effective assessment process that will include not only an overview of gaps but as well our view how to remediate these gaps in SAP itself.

 The Key Group offers an SAP health check specifically on the Hungarian legal requirements defined in XML format.

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Read more: eInvoicing requirements in Hungary per July 1, 2018

eInvoicing requirements in Hungary per July 1, 2018

From 1 July 2018, taxpayers are as stated earlier obliged to provide within 24 hours invoice data for domestic transactions with a minimum VAT amount of HUF 100,000 (322 EUR). The ERP system must be able to detect sales invoices meeting reporting requirements: the minimum VAT amount. To be able to comply with the requirements and provide the data on in time, a taxpayer needs to develop either tooling or purchase a solution.

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Commission develops TNA software to identify fraudulent networks

To speed up the joint processing and analysis of data within Eurofisc, the Commission is currently developing TNA software for voluntary use by the Member States as of 2018.

In order to maximise TNA’s potential to identify fraudulent networks across the whole EU, Regulation (EU) No 904/2010 would make clearer provision for the joint processing and analysis of data within Eurofisc.

Involvement in such processing and analysis will remain voluntary. However, all Member States should grant Eurofisc officials access to their VIES data on intra-Union transactions through TNA.

In that way the software can identify all potential fraud networks, including those involving traders established in non-participating Member States.

Read more: Fair Taxation: Commission proposes new tools to combat VAT fraud

Towards a new and definitive VAT system for the EU

 

According to the Commission's proposals, VAT will now be charged on cross-border trade between businesses. Currently, this type of trade is exempt from VAT, providing an easy loophole for unscrupulous companies to collect VAT and then vanish without remitting the money to the government.It will be simpler for companies that sell cross-border to deal with their VAT obligations thanks to a 'One Stop Shop' (OSS).

Traders will be able to make declarations and payments using a single online portal in their own language and according to the same rules and administrative templates as in their home country. Member States will then pay the VAT to each other directly, as is already the case for all sales of e-services.The Commission also proposes a move to the principle of 'destination' whereby the final amount of VAT is always paid to the Member State of the final consumer and charged at the rate of that Member State.

 Source: Towards a new and definitive VAT system for the EU