What is XML?

XML (eXtensible Markup Language) is a text-based data description language specifically designed for storing and exchanging structured data. Its goal is to make information both human-readable and machine-readable, while maintaining a standardized and well-organized format.

One of XML’s key advantages is its platform- and language-independence, enabling seamless data exchange between different systems.

What is XML used for?

XML is widely used in areas where:

• large volumes of structured data need to be processed (e.g. accounting, invoicing),
• data must be transferred automatically between systems (machine-to-machine, or M2M),
• long-term storage and easy retrieval of data are required,
• regulatory or legal requirements demand precise, standardized data formats.

While XML files don’t “do” anything on their own, they clearly define what each piece of data means, how it relates to other data, and how it should be interpreted structurally.

What does an XML document look like?

An XML file is a plain text file made up of strictly structured elements:

<invoice>
<customer>XY Ltd.</customer>
<total>127000</total>
<vat>27000</vat>
</invoice>

In this example, <invoice> is the root element containing fields for customer, total amount, and VAT. XML follows a hierarchical structure that is both logical and easy to process.

XML in Tax Administration Systems

In Hungary, almost all modern tax systems are based on XML, including:

Online Invoice System (Online Számla): all invoice data submissions are in XML.

eVAT system (eÁFA): standard VAT ledger data is submitted in XML format.

eReceipt system (eNyugta): receipt data is stored and transmitted via XML files.

SAF-T HU: the entire audit file schema is XML-based.

Online cash registers and eCash registers: their logs and reports follow XML structure.

XML is therefore the core technology of Hungary’s digital tax data ecosystem.

Why is XML advantageous for accounting and finance?

Key benefits of XML include:

Standardization: all data follows a consistent structure, enabling validation.

Machine processability: programs can easily parse, store, and analyze XML files.

Human readability: although technical, the format is relatively easy to interpret.

Flexibility: XML structures can be extended or adapted to changing data needs.

Archiving: well-suited for long-term, platform-independent storage.

Validation and Schema Files (XSD)

The validity of XML files is ensured by XSD schema files (XML Schema Definition). These schemas define:

• what elements can appear in an XML file,
• the data types of each field (e.g. number, string, date),
• the hierarchy and occurrence rules for elements.

This is especially critical in tax systems, where even small formatting errors can lead to data rejection.

Summary

XML (eXtensible Markup Language) is a structured, text-based data language used extensively in tax, finance, and accounting systems. It allows for standardized, consistent data storage and transfer. In Hungary, core tax systems like Online Számla, eVAT, SAF-T HU, and eReceipt rely entirely on XML, making its understanding and use essential for modern digital taxation.

Official definition

XML (eXtensible Markup Language) is a text-based data description language that enables structured data transmission in a format readable by both humans and machines. Hungary’s digital tax systems (Online Invoice, eVAT, SAF-T HU, etc.) are built on XML.

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