Reverse charge on the supply of staff in Hungary
The domestic reverse charge on the supply of staff will now apply in Hungary.
26 February, 2016
The Commission allowed this country to extend the reverse charge mechanism in these type of supplies with the aim of reducing VAT fraud. Reverse charging VAT is an exception to the general rule on VAT. Normally, it is the supplier who must account to the tax authorities for any VAT due on the supply. However, for certain goods and services, the obligation to account for the VAT element of the transaction is ´reversed´ and passed to the customer. From an accounting point of view, this system is easy for the customer as it only requires the VAT element to be booked both, in the input VAT account and output VAT account, with the corresponding nil effect in the VAT position.