Application of reverse charge VAT for staff (employee) leasing services significantly reduced
Application of reverse charge VAT for staff (employee)
As of 1 April, reverse charge VAT for staff (employee) leasing services shall be applied only to those which are construction works-related.
An amendment prepared last year regarding point c) of paragraph (1), Section 142 of the Act CXXVII of 2007 - on Value Added Tax shall enter into force on 1 April 2021, since the European Union did not approve Hungary's request to continue reverse charge VAT for all staff (employee) leasing services.
Following the change reverse charge VAT shall be applied solely to those staff (employee) leasing services that relate to:
- the handing over of a built structure that is to be registered in the real estate register (transactions that fall under point d) of Section 10. of the Act CXXVII of 2007 - on Value Added Tax), or
- the construction and other installation works for the creation, extension, conversion and other alteration of real estate taking place.
In accordance with the Act, the application of reverse charge or direct taxation shall be determined based on the date of supply (i.e. when VAT becomes chargeable).
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