On the first day of 2024, the National Tax and Customs Administration (NTCA) activated the electronic VAT system (e-VAT), which supports electronic and accurate completion of tax obligations related to VAT returns. Taxatron, developed jointly by Andersen and Ramasoft and launched in January, provides a reliable solution for completing e-VAT returns and submitting them via an M2M connection.
Possibility to choose
With the introduction of the e-VAT system as of 1 January, the tax authority basically provided tax payers with competing options for submitting their VAT return. Indeed, companies can now submit their VAT returns in three different ways, although possibly only temporarily:
- as they did before, by using the ÁNYK (General Form Completing System)
- by accepting the tax return offered and prepared by the tax authority via the web interface, or
- via an M2M connection (by connecting their ERP system with the NTCA system).
Faster and more detailed data provision
The pace of the Hungarian tax system’s digitalization and the direction of developments foresee that, in the future, companies will be obliged to provide the NTCA with a faster and significantly more detailed, itemised data offering. This may not be possible with the traditional methods and technical solutions, as larger companies’ ERP systems are not prepared for the data requirement of the tax authority, taking both its level of detail and structure into account. Consequently, either an expensive system development becomes necessary, or a target software adaptable to the ERP, which supports the preparation of tax returns, establishes a connection with the tax authority’s system and manages communication, must be introduced.
Shorter return period
The submission of tax returns via an M2M connection can be a particularly beneficial solution, especially for medium and large companies, for which completing and submitting VAT returns are cumbersome processes. For them, the introduction of the system may result in costs savings from day one, as it reduces the time spent on preparing the tax return.
e-VAT return with lower risk
Thanks to the ex ante control of itemised registries, it is now possible to detect errors, which used to be discovered only during ex post tax inspections and thus resulted in paying penalties, before submitting the tax return.
Other advantages of Taxatron
- With the validations introduced in the software, you can significantly reduce the risk of inspections, and the NTCA cannot request the prepared analytics again.
- There is no more hassle with the so-called M sheets.
- Additional data downloading services provided by the tax authority may also be eliminated with Taxatron.
- Taxpayers who choose the M2M submission method do not have to pay a self-correction supplement if they remedy the errors within 15 days after submission as part of a self-correction procedure.
- Reliable tax payers opting for the M2M submission will not receive a tax inspection for 15 days, which allows them to perform the self-correction smoothly and risk-free.
This is the future form of tax return
In addition to the fact that e-VAT allows companies to submit their VAT return in a faster, more secure and more accurate manner, this development is especially important because, in a few years, all tax returns for companies, such as corporate tax returns or local business tax returns, may or must be submitted in this manner. The operation of the system is based on the SAF-T standard (Standard Audit File for Tax) developed by the OECD, which describes the data provision in xml data format, developed for the specification and transfer of digitalized accounting data related to taxation. E-VAT is the first domestic application of this tax return technology, which has been operating in several other European countries for years.
Tax advisory support
Transition to the M2M e-VAT system is a complex task. First, it is necessary to harmonise the new VAT return method (e-VAT return) with the specific features of the company’s ERP system, assess the data sources necessary for the tax return, develop or adjust the related data flow processes, and match the company’s tax codes with the standard ones, which cannot be performed without the support of a tax consultant. As such, successful implementation of Taxatron takes time and requires comprehensive tests.
If you have any questions related to the operation of the M2M e-VAT system or the implementation of Taxatron, do not hesitate to contact Andersen’s tax advisors.