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.

Azta takeaway

For installation trades, azta is most useful at the moment a job changes shape: private customer or business client, licensed activity or adjacent service, standard VAT or reverse VAT. It connects the job facts to the ÖVTJ code and cites the rule, so the invoice and regime choice are not based on memory.

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.

Ask azta before the first reverse-VAT invoice

A single incorrect invoice can create cleanup work for both the contractor and the client. Put the customer type, property type, service description and VAT status into azta; the answer should cite why domestic reverse charge applies, or why the standard 27% VAT treatment remains the better reading.