Hungary Publishes ViDA Implementation Concept for E-Invoicing

Hungary’s National Tax and Customs Administration (NTCA/NAV), in collaboration with the Ministry for National Economy (NGM), released a preliminary conceptual document detailing the country's strategy for adopting the EU’s VAT in the Digital Age (ViDA) initiative. Although the document serves as an informational outline rather than final legislation, it signals a fundamental transformation of the Hungarian digital tax landscape, shifting from real-time reporting to a mandatory e-invoicing system.

Expanded Scope of Mandatory E-Invoicing

Under the proposed framework, Hungary will uphold its principle of separating invoicing from data supply, but data supply will now be strictly based on the invoice. The mandate will cover both accounts receivable (AR) and accounts payable (AP) processes.

Electronic invoicing will become mandatory for:

• Domestic B2B transactions between Hungarian taxable persons.
• Cross-border B2B transactions with other EU-based taxable entities.
• B2G transactions.

Paper invoices will remain permissible exclusively for B2C transactions and sales to buyers located outside the EU (third countries). However, even in these scenarios, the printed invoice must originate from an underlying, structured XML data file.

Strict XML Standards and Format Requirements

Hungary will adopt a data-centric invoicing model strictly based on the EN 16931 European standard, incorporating necessary Hungarian local extensions to ensure interoperability across Member States.

• Hybrid documents, such as a PDF with an embedded XML, will not be accepted.
• The structured XML file will act as the sole legally authoritative version of the invoice.
• Visual representations (e.g., PDF) will be optional for B2B transactions but remain mandatory for B2C sales. If a human-readable version materially contradicts the XML file regarding amounts or VAT treatment, the document must be canceled and reissued.

The Five-Corner Model and Transmission Rules

The proposed architecture follows a five-corner model, integrating the seller, the buyer, their respective accounting software or service providers, and the tax authority. Taxpayers may continue to issue and receive invoices directly using their own software, and the use of third-party service providers is not strictly mandatory.

Non-secure transmission methods, including email distribution, will be prohibited for B2B and B2G transactions. All document exchanges must occur via secure, automated API connections equipped with appropriate encryption.

Before an e-invoice can be issued, the system must verify the buyer’s tax number and register a valid point of receipt to prevent documents from being transmitted to invalid entities.

Hungary intends to establish a national Peppol authority and join the network to enable secure transmission channels. However, the use of Peppol will remain optional for businesses, and the NAV’s own invoicing program will operate independently of it.

Mandatory Software Accreditation

All invoicing platforms and service providers operating in Hungary must obtain official accreditation from the NTCA. The accreditation process will operate through a simplified self-service mechanism designed to verify that systems can generate compliant invoices and extract data correctly:

• Preliminary Accreditation: Mandatory for all e-invoicing service providers.
• Taxpayer Accreditation: Required for any taxpayer utilizing proprietary, in-house invoicing software, regardless of whether the software developer is separately accredited.

The accredited software must automatically verify mandatory data content, tax number validity, and XML structural correctness. If validation fails, the system must block the creation of the invoice.

Unaccredited data submissions will enter a 30-day pending period; failure to complete the accreditation within that window will result in penalties. The NTCA also retains the right to withdraw accreditation in cases of serious or repeated non-compliance.

Enhanced Buyer-Side Reporting Obligations

Although buyer-side reporting is optional for Member States under the ViDA initiative, Hungary plans to implement a strict Acceptance of Receipt (AOR) requirement to enable the tax authority to cross-check data reported by both parties:

• Buyers must report data on received invoices within five days of receipt.
• For domestic transactions, the complete invoice must be submitted as a buyer-side data supply. For cross-border EU transactions, a reduced dataset is sufficient.
• Buyers will be required to submit a dedicated status report alongside their standard VAT return. This mechanism is designed to identify invoices that do not correspond to actual economic events, ensuring the economic reality of the transactions beyond simple invoice matching. Status reports must be corrected immediately if incorrect data is identified.

NTCA Support Services and Transition Tools

To mitigate the administrative burden on taxpayers, the NTCA plans to introduce several supportive services:

• ViDA-OSA conversion tool to help bridge the legacy OSA data structure and the new EN 16931 format during the transition.
• XSLT tool and field mapping documentation enabling the standard generation of visual invoice representations from XML files.
• Free NAV invoicing program that is fully ViDA-compliant.
• Archiving services for legal document retention for both sellers and buyers, supporting attachments up to 5 MB for limited periods.
• Invoice transmission services available either standalone or for integration into existing invoicing software.
• Data supply presentation portals allowing both buyers and sellers to view and reconcile their invoice data.

The published document does not represent a final legislative position and may be revised. Businesses operating in Hungary are advised to closely monitor subsequent regulatory developments from the NTCA and NGM to ensure their systems are prepared for the upcoming technical requirements.

There’s more you should know about e-invoicing in Hungary – learn more about the new and upcoming regulations.