Plumbing, gas and heating installation: 2026 tax rules for sole proprietors

Plumbing, gas and heating installation sits in the ÖVTJ 43 code group, which qualifies for an 80% cost ratio under flat-rate taxation — the most generous ratio available to any sole-proprietor activity, reserved for construction trades.

The six ÖVTJ codes

Six specific codes (432201 through 432208) cover gas piping, heating systems, sewage installation, ventilation, gas appliances, and heating equipment — each with its own note on required qualifications, since installation work is a licensed trade in most of these categories.

Flat-rate taxation: the 80% cost ratio

Flat-rate taxation can be applied safely, since construction activities are entitled to the outstanding 80% cost ratio.

• 80% of revenue is treated as deductible cost — only 20% is taxable income.
• The tax-free income threshold is half the annual minimum wage — around 4.095 million forints in 2026.
• The annual revenue ceiling for flat-rate taxation sits around 136.5 million forints, tied to the minimum wage.
• On the taxable 20%, contributions are 15% personal income tax, 18.5% health insurance and 13% social contribution tax.

KATA and reverse VAT

KATA remains legally available but impractical: a single invoice issued to any business entity triggers immediate disqualification under the 2022 KATA law. For work done on a business client's property, domestic reverse VAT applies — the invoice carries no VAT line and is marked accordingly, while a private client is charged the standard 27% (unless the contractor has elected VAT exemption, capped at 12 million forints).

Billing requirements

• Real-time invoice reporting to the NAV Online Invoice system is mandatory.
• VAT-exempt invoices must carry the "alanyi adómentes" ("AAM") notation; KATA invoices must say "Kisadózó".
• Reverse-charge invoices must be marked "fordított adózás".
• Documents must be retained for five years.