Obligatory electronic invoicing has reached Hungary

Tax & Legal Alert | Issue 614 | 06 May 2019

Serious changes for contracting authorities are being introduced by an amendment to Act CXLIII of 2015 on Public Procurement, which came into effect on 18 April 2019. The amendment introduced an obligation regarding the reception of electronic invoices in the process of public procurement, under certain conditions. The amendment aligns with the ongoing digitalization trend in Hungary, and with the government’s intentions regarding digitalization.

This Hungarian legislation incorporates the requirements determined by directive 2014/55/EU of the European Parliament and the Council. The amendment obliges contracting authorities to receive and process electronic invoices, which are compliant to the European standard (EN 16931-1:2017), and the syntax list linked to the standard and published by the Official Journal of the European Union.

The guideline highlights that the right of the invoice issuer cannot be limited, i.e. the issuer may decide, whether to issue invoices electronically or on paper. According to the aforementioned, from April 2019 the right of decision is in the hands of the tenderers, to which the contracting authority parties must adjust.

In practice this means if a company participates in a public procurement process, it is entitled to unilaterally opt for electronic invoicing while the contracting authority must ensure that it is capable of receiving and processing electronic invoices, even if they did not agree on the practice of electronic invoicing. Whilst the amendment grants the right of decision to taxpayers, at the same time it prescribes obligations to the State.

Through this measure, Hungary has taken a significant step forward in the direction of electronic invoicing.

Should you have any questions regarding the above, please contact your usual relationship partner respectively László Deák (e-mail: laszlo.deak@pwc.com) partner or Kornél Szeőcs (e-mail: kornel.szeocs@pwc.com) manager.