VAT Newsletter – fourth quarter 2022

The VAT newsletter for the fourth quarter 2022 highlighting the latest developments in the field of VAT in Austria, Bulgaria, Croatia, Czech Republic, Hungary, Poland, Romania, Slovakia and Slovenia.

AUSTRIA

CASE LAW

• Compensation claims of commercial agent

A compensation claim of a commercial agent qualifies, same as the supply of a customer base, as a supply of service which falls under the general B2B place of supply rule (Federal Tax Court 26 July 2022, RV/5100069/2019).

• Mandatory input tax adjustment for advance payments

If an insolvency administrator makes an adjustment of the output tax for advance payments received due to the partial non-performance of a service (claim for tax refund), a corresponding input tax adjustment must be made by the recipient who made the advance-payment (Supreme Administrative Court, 8 September 2022, Ra 2020/15/0102

• Input tax adjustment ex tunc if there was no right to deduction

If an input tax deduction proves to be incorrect from the outset (e.g., the service was rendered based on an employment contract and not on a work contract) adjustment must be made with ex tunc effect but not ex nunc at the time of invoice correction (Supreme Administrative Court, 8 September 2022, Ra 2020/15/0025).

BULGARIA

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of 1 January 2023

Introduction of bad debt relief.

• As of 1 January 2024

New reporting obligations for payment service providers concerning cross-border payments.

CROATIA

TAX AUTHORITIES‘ PRACTICE

• As of 1 December 2022

The right to deduct input VAT for a supply of goods or services arises in the VAT period, in which the invoice has been paid, if this supply falls under the cash-accounting scheme (https://www.porezna-uprava.hr/HR_publikacije/Lists/mislenje33/Display.aspx?id=19808)

• As of 1 January 2023

The EURO has been introduced as the official currency in Croatia.

CZECH REPUBLIC

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of 1 January 2023

The threshold for VAT registration for CZ-established taxable persons was increased to CZK 2 million (https://www.psp.cz/sqw/sbirka.sqw?O=9&T=254, Amendment Act. no. 366/2022 Coll.).

• Introduction of obligations for platform operators based on Council Directive (EU) 2021/514 (DAC 7) (https://www.psp.cz/sqw/historie.sqw?o=9&T=203, Parliamentary printout no. 203).

TAX AUTHORITIES’ PRACTICE

• Information concerning the change of bank accounts

VAT payers who do have a registered bank account at Equa Bank are obliged to inform the tax authorities on the change of bank account number due to the merger of Equa Bank into Raiffeisenbank. The notification must be made via submission of official application about the changes of registration details within 15 days from the day it occurred (https://www.financnisprava.cz/cs/financni-sprava/novinky/novinky-2022/informace-k-uctum-vedenym-u-equa-bank).

CASE LAW

In case a VAT return was filed by mistake for a different tax period, the tax authorities should contact the company upfront and request for the potential correction before penalizing for administrative mistakes (https://vyhledavac.nssoud.cz/DokumentOriginal/Html/703823).

HUNGARY

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of 1 January 2023

The definition of “new immovable property” has been extended to immovable properties that have been already used but their function or the number of their units has been changed. In this case the two-year-deadline for qualification as a new property must be determined from the date of the official certificate proving the change. This change is relevant for domestic reverse charge rules as well as the rules on taxable activities (serial sales of immovable properties) (Act about tax law amendments: Art 35, Art. 38, Art 39, Art 51).

• Until 31 December 2024

The reduced VAT rate for the sale of new residential properties is applicable until 31 December 2024. It is planned that the reduced rate will also be applicable in cases where the date of fulfillment falls between 1 January 2025 and 31 December 2028 provided that the official certificate was issued until 31 December 2024 (Act about tax law amendments: Art 358).

• As of 24 November 2022

The VAT in HUF must be only stated on the invoice issued for sales of goods and services where domestic VAT applies (Act about tax law amendments: T/1614. Art 40).

POLAND

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• Until 31 December 2022

Prolongation of anti-inflation measures (https://isap.sejm.gov.pl/isap.nsf/DocDetails.xsp?id=WDU20220002180).

TAX AUTHORITIES´ PRACTICE

• Auctioning NFT tokens in exchange for charity donations

The auctioning of NFT tokens with the proceedings going to charity does not constitute a supply of services and is therefore not subject to VAT. The transfer of NFTs constitutes an expression of gratitude for the donation, but not a sale transaction (tax ruling of 23 September 2022, ref. 0114-KDIP4-2.4012.315.2022.1.KS, https://bit.ly/3w728eU).

CASE LAW

• The value of unredeemed multi-purpose vouchers is not subject to VAT

The consideration received by the voucher issuer from the buyer for the supply of a multi-purpose voucher which is left unredeemed is not subject to VAT and cannot be treated as a remuneration for agency services rendered by the voucher issuer to its partners (Judgement of the Voivodeship Administrative Court in Warsaw of 14 October 2022, ref. III SA/WA 801/22, https://orzeczenia.nsa.gov.pl/doc/BB1CEFE11B).

• Control over facilities – fixed establishment

In the context of assessing a fixed establishment, emphasis should be put on whether, in addition to the use of personnel and technical facilities, the taxpayer has any authority to manage those personnel and technical facilities if they were its own facilities (Judgement of the Supreme Administrative Court of 11 October 2022, ref. I FSK 396/21, https://orzeczenia.nsa.gov.pl/doc/5E708E1517).

ROMANIA

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of 20 November 2022

In order to be able to apply the reduced VAT rate of 5 % for supplies of dwellings under social policy, a new definition of dwellings that can be occupied as such has been introduced for which various conditions must be fulfilled (Law no. 301/2022).

TAX AUTHORITIES´ PRACTICE

• As of 2024

E-invoicing will become mandatory for all taxpayers (Public statement of the MoF State Secretary – Alin Chitu).

SLOVAKIA

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of 1 January 2023

New measures concerning bad debt for both supplier and customer:

• The supplier is obliged to correct the tax base related to the open receivables overdue for more than 150 days. In case of a receivable of maximum EUR 1,000, the supplier must prove that he carried out any kind of activity to receive the payment from the customer. In case the receivable exceeds EUR 1,000 the supplier must prove that he claims the payment through a lawsuit in court.
• The customer is obliged to adjust the VAT deducted from the purchased goods and services if he has not fully or partially paid the supplier within 100 days from the due date of the liability (https://www.nrsr.sk/web/Dynamic/DocumentPreview.aspx?DocID=515662).

The reduced VAT rate of 10 % shall be applicable to a specific kind of services (e.g. personal transport by cableway line/ski-lift; admission to sport facilities and restaurant and catering services).

• As of 1 January 2024

New reporting obligations for payment service providers concerning cross-border payments have been introduced (https://www.slov-lex.sk/pravne-predpisy/SK/ZZ/2004/222/20230101.html).

TAX AUTHORITIE´S PRACTICE

• Methodical guidelines

Slovak Tax authority published a methodical guideline regarding the triangular simplification rule which contains several practical cases regarding application and declaration. The application of the simplification rule has also been confirmed for more than three taxable persons involved, provided that the general conditions are fulfilled (https://bit.ly/3HbCvQB).

SLOVENIA

TAX AUTHORITI´S PRACTICE

• Reimbursement of legal costs and the right to deduct VAT
  • When the taxable person (losing party in the dispute) reimburses the legal costs with VAT to the beneficiary (opposite party in the dispute), this cannot be considered as a purchase of goods or services within the scope of its activity and therefore there is no right to deduct input VAT.
  • It is important that the party who requests the reimbursement of costs clarifies in the reimbursement request itself whether it has the right to deduct input VAT and whether it will request it in its VAT return.
  • This means that only the party who does not have the right to deduct this VAT is entitled to reimbursement of legal costs with VAT included (Explanation of the Financial Administration no. 0920-16404/2022-2 from 4 November 2022).