VAT Newsletter third quarter 2025

Newsletter – 29.10.2025

Please find below the VAT newsletter for the third quarter of 2025 highlighting the latest developments in the field of VAT in Austria, Bulgaria, Croatia, Czech Republic, Germany, Hungary, Poland, Serbia, Slovakia and Slovenia.

Austria

CASE LAW

Preliminary ruling request to the ECJ on the VAT treatment of contributions in kind (Sec 12 para 10 Austrian VAT Act in conjunction with Art 19 VAT Directive)
- The contribution in kind of commercially used real estate to a corporation free of charge raises the question whether this constitutes a supply for consideration or a deemed supply. Furthermore, it must be examined whether a tax-neutral transfer in the context of restructuring is compatible with Art 19 VAT Directive and directly applicable (Supreme Administrative Court 28.05.2025, Ro 2024/13(0020).
Subsidies as rent prepayments subject to VAT (Sec 1 para 1 number 1 in conjunction with Sec 19 para 2 no 1 lit a Austrian VAT Act)
- Subsidies paid by the public sector directly to the building owner for renovation work and to cover rental costs are subject to VAT as advance rent payments if they can be clearly attributed to the specific rental service (Supreme Administrative Court 28.05.2025, Ra 2024/15/0084).
No input tax deduction for subsequent decontamination costs (Sec 12 para 1 no 1 lit a Austrian VAT Act)
- Services for the decontamination of land intended for sale, on which a taxable business was formerly operated, do not entitle to input VAT deduction if the remediation occurs decades later. A mere legal obligation to remediate does not establish the required direct and immediate link to past business activity, even if the contamination was caused by that activity (Federal Finance Court 09.04.2025, RV/5100360/2023).
Formal errors in input tax refund application (Sec 12 in conjunction with Sec 21 Austrian VAT Act)
- Mere formal deficiencies in an input VAT refund application do not automatically justify the denial of input VAT deduction. The tax authorities must correct obvious errors or request the taxpayer to do so (Federal Finance Court 26.05.2025, RV/2100710/2024).

Bulgaria

RIGHT TO TAX CREDIT

Since 1 April 2025
- The right to deduct input VAT cannot be denied on the basis of the unknown origin of the goods, as only the actual delivery is relevant (Supreme Administrative Court 30.07.2025, Link).

Croatia

PLANNED AMENDMENTS TO THE VAT ACT/FISCAL CODE

VAT registration threshold
- The VAT registration threshold may be raised again, after last year’s increase from EUR 40,000.00 to EUR 60,000.00 (media report).

NEW FISCALIZATION ACT

Since 1 September 2025
- New fiscalization Act extends e-invoicing and real-time reporting obligations to the B2B segment with a transition period allowing all obligated parties and intermediaries to test their systems (Official Gazette NN 89/2025, Link).
As of 1 January 2026
- Application of full e-Invoice issuance and fiscalization requirements.

Czech Republic

AMENDMENTS TO THE VAT ACT/FISCAL CODE

Since 1 July 2025
- VAT on a building applies for 23 months after completion; later transfers are VAT-exempt unless it is the first supply. Period starts when the occupancy permit is final or building is used permanently.
- The “first-supply” rule: only the first transfer after completion/major change is taxable. Later ones are exempt unless another major change (>30 % of tax base) occurs. 12 % VAT applies only if used for housing/social housing (≤350 m² house, ≤120 m² apartment); larger units use standard rate (Czech VAT Act No 461/2024, Link).

TAX AUTHORITIES’ PRACTICE

Since 1 January 2025
- Adjustment of input VAT on taxable supplies if invoices remain unpaid for over six months, with later payments allowing possible adjustments. The Guidelines explain the relevant Czech VAT provisions and how to report such adjustments in VAT returns and Control Statements. This applies only to supplies with a tax point from 1 January 2025 onwards (Sec 74b of Czech VATA (Link)).

CASE LAW

VAT Assessment by Estimation Tools
- The Supreme Administrative Court confirmed that VAT cannot be assessed solely based on EET (electronic evidence of sales) when the taxpayer fails to provide purchase documents. Authorities must use estimation methods that reflect input transactions to ensure VAT neutrality and realistic assessment (Supreme Administrative Court 22.05.2025, 3 AFS 279/2023 – 35 (Link)).

Germany

TAX AUTHORITIES’ PRACTICE

E-invoice implementation
- Substantial adjustments to the Administrative Guidelines, incorporating the new e-invoicing regime into practical instructions (Letter of German Federal Ministry of Finance 15.10.2025, C 2 – S 7287-a/00019/007/243).
Since 1 July 2025
- Expanded acceptance of substitute or alternative evidence on export where traditional customs or departure certificates are unavailable. (Letter of German Federal Ministry of Finance 1.7.2025, III C 3-S 7134/19/10003:001 (2020/0626512)).

CASE LAW

Referral to the ECJ regarding trust protection in VAT proceedings
- The BFH submitted a question to the ECJ asking whether EU law permits with-holding taxpayer trust protection until a separate “ex gratia” (Billigkeit) pro-cedure, rather than during the main tax/VAT assessment. The BFH expressed doubts if this delayed approach aligns with the principle of effectiveness un-der EU law. (Federal Fiscal Court, 19.02.2025 – XI R 23/24).

Hungary

PLANNED AMENDMENTS TO THE VAT ACT/FISCAL CODE

Since 15 September 2025
- Invoices (with minor formal mistakes) previously accepted with warnings will be rejected by the tax authority to ensure accurate reporting and improved data quality (Letter from the Hungarian National Tax and Customs Administration (Link)).
Since 31 July 2025
- In the detailed report on incoming invoices in the sales tax return, the tax amounts actually deducted can be shown separately. The new columns allow tax amounts to be entered separately at rates of 5 %, 18 %, and 27 %, as well as tax amounts that are subject to a proportional deduction (applies to forms M-02 and M-02-K) (Link).

TAX AUTHORITIES’ PRACTICE

Since 2 July 2025
- The Hungarian Tax Authority (NAV) issued Taxation Question No. 2025/6 with guidance on VAT group taxation in cases of legal succession, including in-voicing. While not legally binding, such guidance serves as an interpretative aid in complex situations (Link).

Poland

AMENDMENTS TO THE VAT ACT/FISCAL CODE

Introduction of the National e-Invoice System (KSeF)
- Since 1 February 2026: Large entrepreneurs with 2024 sales (incl. VAT) exceeding PLN 200 million must issue and receive invoices via KSeF (Link).
Since 1 April 2026
- All other entrepreneurs and local government units are subject to the same obligation (Link).

PLANNED AMENDMENTS TO THE VAT ACT/FISCAL CODE

Since 29 July 2025
- A draft amendment to the VAT Act (UDER76) was submitted for review. The draft provides for an amendment to Art 33a of the Act of VAT in connection with the new AIS/IMPORT PLUS customs system implemented on June 19, 2025 (Link).
- The draft law provides for, among other things:
  - The possibility of settling VAT in the tax return regardless of the date of submission of a supplementary declaration
  - An extension of the deadline for correcting the tax return for Authorized Economic Operators (AEO).

CASE LAW

Marriage as a single VAT taxpayer
- The Administrative Court in Wrocław pointed out that a married couple under the community property regime should be treated similarly to a civil law partnership for VAT purposes and should therefore act as a single VAT taxpayer (Judgement of the Wrocław Administrative Court of August 5th, 2025, ref. I SA/Wr 92/23 & I SA/Wr 99/23, Link, Link).
VAT exemption on importation of goods contained in consignments
- The Supreme Administrative Court (25 July 2025, I FSK 110/21) ruled that imports from a third-country private sender to a private recipient in any EU Member State can be exempt from VAT under Art 52 of the Polish VAT Act, if the conditions specified in Art 52 are met. Referring to CJEU case C-405/24, the Court stressed that Polish restrictions conflict with EU law and that the exemption ensures consistent treatment of such shipments across Member States, especially for items sent for personal or sentimental reasons (Judgement of the Supreme Administrative Court of July 25th, 2025, ref. I FSK 110/21, Link).

Serbia

AMENDMENT TO THE RULEBOOK ON ELECTRONIC INVOICING

Since 11 October 2025
- The Ministry of Finance has adopted an amendment to the Rulebook on Electronic Invoicing, published in the Official Gazette of the Republic of Serbia No. 85/25 of 3 October 2025 regarding the possibility of submitting a notice of correction for deduction of input tax via the SEF.

ADVANCE RULINGS OF THE MINISTRY OF FINANCE

VAT treatment of dairy drinks with added coffee
- The Ministry of Finance clarified that the supply and import of dairy drinks with added coffee are subject to reduced VAT rate of 10 %, provided these products are declared as „dairy drinks“ in accordance with regulations governing the quality of dairy products (Advance Ruling of the Ministry of Finance no. 003513118 2024 10520 004 000 011 004).
VAT Treatment of Energy Services under the Energy Efficiency Law
- The Ministry clarified that the provision of energy services over a contracted period by a VAT taxpayer, in accordance with the Law on Energy Efficiency and Rational Use of Energy, is subject to VAT. This includes services aimed at im-proving energy efficiency, such as energy audits, implementation of energy-saving measures, and performance monitoring (Advance Ruling of the Ministry of Finance no. 002403001 2024 10520 004 000 011 00101).

Slovakia

PLANNED AMENDMENTS TO THE VAT ACT/FISCAL CODE

Since 1 January 2027
- Mandatory issuance and receipt of e-invoices for VAT payers established in Slovakia for domestic B2B and B2G transactions.
Since 1 July 2030
- Mandatory e-invoicing and data reporting for all taxable persons, including cross-border transactions. From this date, the obligation to file control and recapitulative statements will be eliminated.
Since 1 January 2026
- The Slovak parliament has approved a new package of consolidation measures for 2026, including amendments to the VAT Act.
- The amendments cap input VAT recovery at 50 % for the acquisition or leasing of passenger cars and motorcycles that are used partly for non-business pur-poses, including related costs (fuel, maintenance, etc.). Where a vehicle is used exclusively for business purposes, new notification and record-keeping obligations will apply to substantiate full VAT deduction. In addition, the VAT rate on certain high-sugar and high-salt foods will increase from 19 % to 23 % (Link).
- An approved amendment of Act on Financial transaction tax (FTT) broadens the definition of a permanent establishment (PE) for FTT, introducing a monthly activity threshold – performing activities in Slovakia for more than 15 days in a calendar month may create a PE for FTT. Separately, from 1 Septem-ber 2025, taxpayers may request binding rulings for VAT on main transaction types (including verification of correct VAT rates on goods and services); bind-ing rulings will also be available for FTT (Link).

TAX AUTHORITIES’ PRACTICE

Since 1 January 2025
- The Slovak Tax Authority issued guidance on VAT for lease agreements with a purchase option. If exercising the option is the only economically rational choice, the transfer is treated as a supply of goods, with VAT due in full at the start of the lease rather than on individual payments. This applies to leases concluded after 1 January 2025 (Link).

Slovenia

AMENDMENTS TO THE VAT ACT/FISCAL CODE

Since 1 January 2027
- A proposal of a new Act on electronic invoicing has been published, which would require all business entities registered in the Business Register (AJPES) to issue e-invoices to other businesses from 1 January 2027 (postponed from the initially proposed 1 June 2026). Businesses would be able to use e-SLOG, EU-compliant syntaxes, or other internationally accepted standards (Link).

TAX AUTHORITIES’ PRACTICE

Since 26 June 2025
- The Slovenian Financial Administration clarified that not all food deliveries qualify as catering for VAT purposes. Catering requires additional services such as on-site setup, serving, or provision of equipment, creating a complete dining experience. Without these elements, the transactions are treated as a supply of goods and delivery service, subject to the standard VAT for delivery and reduced VAT for food; simply labelling an invoice as “catering” is not sufficient (Link).