VAT Newsletter – second quarter 2024

Please find below the VAT newsletter for the second quarter 2024 highlighting the latest developments in the field of VAT in Austria, Bulgaria, Czech Republic, Croatia, Hungary, Poland, Romania, Serbia, Slovenia and Slovakia.

Austria

CASE LAW

• Input VAT refund procedure for (tax-exempt) iC supplies (Sec 11 and 12 Austrian VAT Act in connection with Art 7 Austrian VAT Act)
  • The refund of an invoiced VAT is not permitted, if the supply qualifies as an iC supply, which can subsequently be exempted from VAT (Federal Tax Court, 05.03.2024, RV/2100222/2022).
• Mandatory application of the input VAT refund procedure (Sec 20 para 2 and Sec 21 para 9 Austrian VAT Act)
  • If all requirements of the refund procedure are fulfilled, the input VAT must be claimed by foreign taxable persons in that procedure, even if the assessment procedure was applied in the previous years.
  • The submission of an annual VAT return does not qualify as an application for the refund procedure (Federal Tax Court, 05.03.2024, RV/2100510/2022).

Bulgaria

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of May 2024
  • Prolongation of the VAT rate of 0 % for the supply of bread and flour (introduced in July 2022) until 31 December 2024 (Link).

Czech Republic

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of 1 January 2025 (draft)
• • Introduction of several changes to the CZ VAT Act:
    • Introducing two thresholds for CZ VAT registration. CZK 2,000,000 for which the taxable person becomes CZ VAT payer from the first day of the following year; and CZK 2,536,500 for which the taxable person becomes CZ VAT payer from the following day.
    • Implementation of special scheme for small enterprises;
    • Shortening the period to claim input VAT deduction from 3 years to 2 years;
    • Extending the period to obligatory correction of tax base for taxable supplies from 3 to 7 years;
    • New obligation to reimburse input VAT deduction on unpaid liabilities after 6 months;
    • New obligation to apply open market value for the supply of immovable propertybetween employer and employee (Link)

CASE LAW

• Input VAT deduction
  • The Czech Supreme Administrative (SAC) recently ruled that for fictitious sales of goods no right to input VAT exists if the recipient cannot prove the receipt and use although VAT must be on the contrary declared and paid if listed on the invoice. (Link).

Croatia

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of 1 April 2024
  • Prolongation of the reduced VAT rate of 5% for the supplies of natural gas and heating until March 2025 (Amendments to the VAT Act published in Official Gazette 35/2024, Link).
• VAT refund
  • Overview of valid reciprocity agreements concluded with third countries for purposes of VAT refund, newly including North Macedonia (Link):

Hungary

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of 1 July 2024
  • Implementation of VAT exemption for “accredited vocational training examination center” (Section 85 (1) i) of the VAT Act; implemented by Section 24 of the Act XIII of 2024 on amending laws on education, family, culture and related matters).

CASE LAW

• Refund of VAT to taxable persons not established in the Member State of refund
  • The Court of Justice of the European Union (CJEU) held that the Hungarian rule for VAT refund claims of taxable persons not established in Hungary requiring such persons to submit additional information and documents within one month is contrary to EU law (ECJ C-746/22 Slovenské Energetické Strojárne).

Poland

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of 1 April 2024
  • Increase of temporary reduced VAT rate from 0 % to 5 % on basic food products.
  • Reducing VAT rate on beauty treatment services from 23 % to 8 % (Link).

Implementation of mandatory National System of e-invoices (KSeF) postponed to 1 February 2026 (for taxable persons with sales exceeding PLN 200 million) and to 1 April 2026 for (all other taxable persons) (Link).

CASE LAW

• The Supreme Administrative Court ruled that the assignment of rights under a development agreement is a supply of service subject to the tax rate of 23 % (Judgement of the Supreme Administrative Court of 24 June 2024, ref. I FSK 1661/20, Link).
• The testing of samples free of charge for the purpose of obtaining information is not subject to VAT (Judgement of the Supreme Administrative Court of 14 March 2024, ref. I FSK 1363/20, Link).

Romania

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of May 2024
  • Implementation of quarterly reporting obligations for payment service providers (Law 33/2024 with amendments to the Fiscal Code).
  • Cash registers will have to provide more details to the tax office for the future functionality of automated filling of the VAT return (Government Emergency Ordinance 43/2024 with amendments to the Fiscal Code).
  • Reporting extension for international transports of goods in call-off stocks (Government Emergency Ordinance 43/2024 with amendments to the Fiscal Code).

Serbia

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of April 2024
  • The tax exemption for the supply of goods which are under customs warehousing procedure can now be exercised with a declaration in electronic form (“Official Gazette of the Republic of Serbia” – issue No. 29/2024, dated 3 April 2024).

Slovenia

TAX AUTHORITIES´PRACTICE

• As of 20 March 2024
  • Based on the ECJ judgement C-247/17 (Luxury Trust Automobil), it was determined that the invoice reference to the transfer of the tax liability is a mandatory reference, in the absence of which the triangular transaction is not applicable (Link).

Slovakia

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• As of 1 January 2025
  • No more obligation for foreign taxable persons to register for VAT purposes prior to the taxable transactions carried out, but must be done immediately upon execution of a taxable transaction;
  • VAT deduction from IC acquisitions also possible without invoice;
  • The transfer of a leased item under a lease agreement with a right to purchases shall be considered as a supply of goods, if the exercise of the purchase option represents the only economically rational choice for the lessee. VAT will not be payable in respect of the agreed payments during the lease period, but in its entirety at the beginning of the lease;
  • Introduction of a tax exemption for small businesses in accordance with EU legislation (national turnover threshold: EUR 62,500/50,000; EU turnover threshold: EUR 100,000);
  • Simplified invoices – threshold: The amendment reduces the threshold from EUR 1,000 to EUR 400 (without VAT);
  • In the case of a virtual event (e.g., granting the right to participate in an online educational event) provided for a taxable person, the place of supply will be determined according to the basic B2B rule.

• As of July 2025
  • Reverse-charge on the import of goods under the following circumstances:
    • goods are released into free circulation, or temporary admission with partial relief from import duty,
    • VAT-payer has valid VAT ID No., and
    • the VAT-payer has been granted an Advanced Economic Operator (AEO) license.
    • The regulation applies for resident VAT payers from July 2025 and for foreign VAT payers (only registered for VAT) from January 2026 onwards (Link).