Inverted VAT is applied if the entrepreneur sells construction services or hires labor for construction other than occasionally. When is the sale of construction services incidental?
When assessing whether the buyer is a trader who is considered to sell construction services other than occasionally, the following factors influence:
- the buyer's main industry and activity,
- the regularity of sales of construction services,
- number and scope of services.
Occasional construction mainly means one-time, temporary, non-repetitive or minor construction that is not intended for continuous operation.
The seller's industry is not decisive
The seller's industry is irrelevant in the application of reverse tax liability. Instead, what is decisive is the type of service and the fulfillment of the buyer's requirements. Reversed tax liability is therefore also applied when a company other than the construction industry sells construction services to a buyer who meets the requirements.
Not applicable for sales to private individuals
If the construction service is sold to a private person, reverse tax liability is not applied.
useful links
- Tax administration: reversed VAT liability in the construction industry
- Tax administration: instructions on the application of reverse VAT
- Finlex: Value Added Tax Act
Translated VAT - printable instructions
List of construction services
Ville Wartiovaara
Executive Vice President, Regional Director
ville.wartiovaara@rt.fi + 358 40 564 7939Talonrakennusteollisuus ry, Uusimaa