Facebook image

reverse VAT

Reverse taxation, reverse VAT: In the case of reverse taxation, the tax is payable by the party acquiring the goods or services with the tax also being deductible if the taxpayer is eligible for VAT deduction. If the condition of eligibility for tax deduction is fulfilled (according to the main rule, if the invoice certifying fulfilment of the transaction is available),the party accepting the invoice declares the VAT payable and deductible in the same return, therefore, in the case of a right to full VAT deduction, no actual VAT payment obligation arises. In these cases, the invoice is issued without charging VAT. 

Reverse taxation can be: 

  • domestic reverse taxation and 
  • cross-border reverse taxation. 

The most common cases of cross-border reverse taxation are intra-Community acquisitions of goods or acquisitions of services from foreign taxpayers if the place of supply is in Hungary. 

More to Know

Related posts