Reverse VAT (Fordított ÁFA) in Hungary — Rules, Invoicing, and NAV Reporting
Reverse VAT (fordított ÁFA) is one of the most commonly misunderstood rules for businesses operating in Hungary, especially in construction and subcontracting. When it applies, the VAT obligation shifts from the seller to the buyer — the invoice shows 0% VAT and a mandatory notation. Bizonylat handles reverse VAT automatically, including the correct NAV Online Invoice submission.
What is reverse VAT and when does it apply?
Under normal Hungarian VAT rules, the seller charges VAT and pays it to NAV. Under reverse VAT (fordított ÁFA), the VAT obligation shifts to the buyer — the seller issues an invoice with 0% VAT and it is the buyer who accounts for and pays the VAT.
Reverse VAT is mandatory in Hungary when all three conditions are met:
- Both the seller and the buyer are VAT-registered in Hungary.
- The transaction is domestic (both parties are established in Hungary for the purposes of the supply).
- The work falls within the scope of Annex 1 of Act CXXVII of 2007 (the Hungarian VAT Act) — this covers construction, renovation, and maintenance of real estate, as well as certain other activities such as waste and scrap metal trading.
If any condition is not met — for example, the buyer is a private individual or not VAT-registered — standard VAT rates apply (typically 27% for construction services).
What must appear on a reverse VAT invoice?
A legally valid reverse VAT invoice in Hungary must contain several specific elements in addition to the standard invoice fields:
- 0% VAT rate on the relevant line items — no VAT amount is charged.
- "Fordított adózás" — this exact phrase (meaning "reverse charge") must appear on the invoice as required by the Hungarian VAT Act.
- Tax code F — when submitted to NAV Online Invoice, reverse VAT invoices must use the F (fordított adózás) tax code for each affected line.
- Both parties' VAT registration numbers (adószám) must be present, as the buyer's VAT registration is a precondition.
Bizonylat applies all of these requirements automatically when you select the reverse VAT option on an invoice. You do not need to manually add the notation or choose tax codes.
Construction and subcontracting: the most common use case
The vast majority of reverse VAT invoices in Hungary are issued in the construction sector — specifically in subcontracting chains. A typical scenario:
- A general contractor wins a public or private construction tender and subcontracts work to specialist firms (electricians, plumbers, structural engineers, etc.).
- Each subcontractor invoices the general contractor with 0% VAT and "Fordított adózás."
- The general contractor accounts for the VAT on the purchase and can reclaim it as input VAT — resulting in a net-zero VAT position on those transactions.
This mechanism was introduced to prevent VAT carousel fraud in construction, where subcontractors would charge VAT but disappear before paying it to NAV. Reverse VAT eliminates this risk by moving the obligation to the buyer.
For more detail on the full invoicing workflow for construction businesses, see our construction invoicing guide.
How Bizonylat handles reverse VAT automatically
Bizonylat is designed for Hungarian VAT compliance from the ground up. For reverse VAT invoices:
- Select "Fordított adózás" on any invoice line — Bizonylat sets 0% VAT and adds the required notation.
- The invoice is submitted to NAV Online Invoice in real time with the correct F tax code. No manual NAV entry required.
- Mixed invoices are supported: you can combine standard VAT lines and reverse charge lines on the same invoice.
- VAT summaries and export reports correctly separate reverse charge transactions from standard VAT transactions for your accountant.
- The immutable audit log records every invoice action with user and timestamp — useful for NAV audits.
All plans include reverse VAT support. There is no add-on or upgrade required.
Frequently asked questions
When does reverse VAT (fordított ÁFA) apply in Hungary?
Reverse VAT applies when both the seller and buyer are Hungarian VAT-registered entities, the transaction is domestic, and the work relates to real estate construction, renovation, or maintenance (as listed in Annex 1 of the Hungarian VAT Act). In that case the VAT obligation shifts from the seller to the buyer.
What notation is legally required on a reverse VAT invoice?
Hungarian law requires the phrase 'Fordított adózás' (reverse charge) to appear on the invoice. The VAT rate is shown as 0% and the tax base is stated. Bizonylat adds this notation automatically and uses the correct F tax code for NAV Online Invoice reporting.
Does reverse VAT apply if the buyer is not VAT-registered?
No. Reverse VAT only applies when both parties are VAT-registered in Hungary. If the buyer is a private individual or a company not registered for VAT, standard VAT rules apply (27% for most construction services).
How does reverse VAT affect cash flow for subcontractors?
Subcontractors do not collect VAT on their invoices, so they have no VAT to pay to NAV from the transaction. However, they can still reclaim input VAT on their own purchases. The net effect is often positive for cash flow.
Does Bizonylat submit reverse VAT invoices to NAV automatically?
Yes. Every invoice issued in Bizonylat — including reverse VAT invoices — is submitted to NAV Online Invoice in real time. The correct tax code (F for reverse charge) is applied automatically. You do not need to log in to NAV's interface separately.
Can I issue mixed invoices with both standard VAT and reverse VAT lines?
Yes. Bizonylat supports mixed invoices where individual line items carry different VAT treatments. For example, you can have standard 27% VAT lines alongside 0% reverse charge lines on the same invoice. Each line is reported to NAV with the correct code.