E-invoice Security Master: Protect Your Customers' Data with Ease

From July 1, 2025, all businesses will send electronic invoices to their non-residential partners. No exceptions. E-invoicing is no longer a matter of choice.

Since the pandemic, companies have been increasingly switching to digital document management. According to the VAT Act, an e-invoice is any invoice that is issued and received electronically, including all mandatory data. Paper, envelopes, printers—these are now a thing of the past.

The transition is more than just a technical task. Security issues arise. Businesses must develop new archiving methods, calculating for an 8-year storage period. Protecting customer data is a fundamental requirement.

This article presents the secure use of e-invoicing in compliance with NAV regulations. Technical solutions, customer consent management, practical data protection measures—all the important information in one place. Secure e-invoicing awaits you.

Basics of e-invoicing and security requirements

According to Directive 2010/45/EU, an electronic invoice is a document that has been issued and accepted in electronic form. It is not a digital copy. An e-invoice can only be issued, transmitted, and stored electronically. It can be printed, but the paper version is not an authentic document.

Validity and operation of e-invoices

The VAT Act stipulates three conditions: authenticity of origin, integrity of data content, and legibility. Authenticity of origin identifies the issuer. Integrity guarantees that the data will not be altered subsequently. These are ensured by digital signatures and time stamps.

The invoice process is simple. The issuer generates it electronically, adds authentication elements, and then sends it. There is one rule: the recipient's consent is required. This can be tacit, for example, by paying the invoice.

Critical points of data protection

E-invoices often contain personal data. According to the GDPR, the data of private individuals and sole traders requires increased protection.

Section 169(2) of the Accounting Act stipulates a retention period of eight years. During this period, e-invoices may not be deleted or damaged, and may not be accessed by unauthorized persons.

Electronic data is fragile. Appropriate storage and archiving solutions are required. Regular data backup and multiple storage are essential.

NAV connection and simplification

From 2021, NAV Online Invoice will also request data reporting from private individuals' accounts. Modern invoicing programs send the data automatically.

NAV Online Invoice 3.0 has a dual function. Businesses issue e-invoices and fulfill their data reporting obligations at the same time. The reported XML file can be used as an e-invoice with the appropriate hash code.

The result is clear: e-invoicing is environmentally friendly, secure, and efficient. It also simplifies the work of businesses and tax authorities.

E-invoice Authenticity Assurance

The authenticity of electronic invoices is not optional. Both tax authorities and business partners expect reliable documents. The VAT Act specifies three basic requirements: authenticity of origin, integrity of data content, and legibility. All three criteria must be met for a period of eight years.

Application of Digital Signatures and Time Stamps

The digital signature identifies the issuer of the invoice. It is unique electronic data that can be linked to the signatory and is related to the content of the document. Any subsequent changes become immediately visible. The use of at least an enhanced electronic signature is mandatory.

The timestamp acts as a digital date stamp. The exact time issued by a trusted service provider certifies the moment the invoice was created. Using both solutions together provides reliable proof of authenticity.

Previously, digital signatures and time stamps were mandatory for all e-invoices. Today, other methods are also accepted, but many invoicing programs automatically apply these for the most secure authentication.

Hash Code and Other Technical Methods

The hash code acts as a digital fingerprint. A cryptographic algorithm generates a unique string of characters from the account data. Its three main features are:

• Uniqueness: the same document always results in the same code

• Irreversibility: the original document cannot be restored from the code

• Verifiability: modifying a document changes the code

The hash code stored in the NAV online invoice system ensures independent verifiability. Additional options include the use of the EDI system and special archiving solutions.

Certificate of Authenticity Upon Inspection

During a tax authority audit, the authenticity of the e-invoice must be verified. The simplest method is to compare the hash value: the code of the invoice being audited must match the value stored in the NAV system.

A reliable audit trail can be ensured in several ways. In the case of a logical method, related documents—contracts, performance certificates, order forms—support the connection between the transaction and the invoice. In the case of a technical solution, electronic signatures or hash codes serve this purpose.

E-invoices are only valid in electronic form. Printed versions are not accepted. During inspections, the original electronic document must be presented to the tax authority representative.

Data Storage and Archiving Appropriately

E-invoices can only be stored in electronic form. This is stipulated by the VAT Act, with no exceptions. Even if we print them out for processing, the authentic version remains electronic.

Storing E-Invoices for 8 Years – The Practice

According to Hungarian law, e-invoices must be stored in a readable format for at least 8 years and must be retrievable based on accounting references. The retention period starts on January 1 of the year following the year in question.

Three basic requirements must be met in all cases: authenticity of origin, integrity of data content, and readability of documents. Without compliance with these requirements, storing invoices is pointless.

Archiving Methods and Locations

The digital archiving regulation is clear: we must protect e-invoices against deletion, destruction, modification, and unauthorized access. There are two main methods to choose from: storing documents with enhanced security electronic signatures or using a closed system.

NAV Access Requirements

In the event of a tax audit, the requested invoices must be produced within three days. For this reason, we store them in a pre-registered location, ensuring quick access. The data in the Online Invoice system is not sufficient on its own—it does not replace the original e-invoice.

External Storage and Cloud Services

We can use external data storage devices: servers, USB sticks, cloud storage. Ensuring long-term access is key. Email accounts or simple computer storage are not recommended—there is no adequate protection against deletion.

Google Drive, OneDrive—many people use these, but they do not guarantee adequate protection in the event of data loss. The archiving process can be automated or manual; the law does not require automation. Weekly or monthly backups to a secure archive are an appropriate solution.

Practical Solutions E-invoicing Security

Setting up a secure e-invoicing system requires specific steps. Every business must find its own solution.

Invoicing program Selection

The first criterion of the program is NAV compatibility and support for online data reporting. Encrypted communication is necessary for data protection purposes. This involves the handling of confidential business information.

Additional features: contact management, automatic reminders, customizable settings. These increase efficiency and reduce the possibility of errors.

Partnership Agreements

Before switching to electronic invoicing, it is worth agreeing on the technical details. Recording transmission methods and channels helps to ensure the authenticity of the origin.

In case of changes, prior notification is useful. Suspicious invoices are easier to recognize if they do not arrive in the usual way.

Customer Consent Management

The law requires the invoice recipient's consent. A formal statement, payment of the invoice, tacit consent, or a written agreement are all acceptable.

Verbal consent, contractual agreement, or regulation in the General Terms and Conditions are possible. In case of objection, a paper-based invoice must be provided.

NAV System Settings

To use the online billing service, you need to create a technical user account in the NAV system. You can log in using KAÜ.

Setting permissions:

• Account management

• Viewing invoices

• EAFA system interface access

• OPG log query

In internal systems, account manager and administrator rights must be assigned with caution.

Error Handling and Checking

The NAV regularly checks the invoice data submitted. A common problem is the use of the same invoice number in multiple programs.

Invoicing programs report data reporting errors. The NAV online invoicing system allows direct queries. It is recommended to review incorrect invoices and basic documents.

Stricter validations are expected from September 2025. Previous warnings will become errors, causing unsuccessful data reporting.

Summary

The introduction of e-invoicing is no longer in question. From July 1, 2025, it will be mandatory for all businesses.

The three pillars of secure operation: appropriate billing software, proper archiving, and partner consent. A wide range of technical solutions are available, including digital signatures, hash codes, and EDI systems. All of these are suitable for ensuring authenticity.

The 8-year storage obligation is a serious task. External data storage devices and cloud services can help, but security must not be compromised. The NAV must be able to produce the requested documents within 3 days.

Practical experience shows that most businesses are able to handle the transition successfully. Regular monitoring and immediate correction of errors are important. From September 2025, the NAV will introduce stricter validation.

The security of e-invoicing is a basic business requirement. With proper preparation and by following professional recommendations, every company can be capable of secure electronic invoicing. While meeting the requirements of the National Tax and Customs Administration.

Preparations should begin now. Setting up the technical infrastructure, informing partners, and restructuring internal processes all take time. Everything must be in order by July.

Frequently Asked Questions

Q1. What is an e-invoice and when will it become mandatory in Hungary? An e-invoice is an invoice issued and received in electronic form. In Hungary, it will become mandatory for businesses to issue e-invoices to non-residential customers from July 1, 2025.

Q2. How can the authenticity of an e-invoice be ensured? The authenticity of an e-invoice can be ensured in several ways, for example with a digital signature, a time stamp, or a hash code. These methods guarantee the authenticity of the origin, the integrity of the data content, and the readability of the document.

Q3. How long should e-invoices be stored and how? E-invoices must be stored in electronic form for at least 8 years. Storage must ensure the authenticity of the original, the integrity of the data content, and the readability of the document. Archiving can be done on an external data carrier or in the cloud, but it must be protected against deletion, destruction, and unauthorized access.

Q4. What data protection considerations should be taken into account when e-invoicing? When e-invoicing, special attention must be paid to data protection, particularly the processing of personal data. It is important to ensure proper access control, secure data storage and transmission, and compliance with GDPR requirements.

Q5. How is NAV connected to e-invoicing? From 2021, the NAV Online Invoice system will also request data reporting for invoices issued to private individuals. Modern invoicing programs automatically send the data to the NAV system. Online invoice data reporting does not replace the original e-invoice, but the submitted XML file, provided it has the appropriate hash code, can also be used as an e-invoice.