Starting September 1, 2024, the general VAT rate will increase from 24% to 25.5%.

It is important to note that this change applies only to goods and services currently taxed at 24%. Products and services subject to reduced VAT rates, such as hotel accommodations and fitness services, will remain unchanged.

Discussions are ongoing regarding potential further changes to reduced VAT rates, which could be introduced in 2025. Proposals include increasing the VAT rate from 10% to 14% for many goods and services. Additionally, there is consideration of introducing a 14% VAT rate for chocolate and sweets.

The Date of Delivery is Crucial

VAT is determined by the date of delivery of goods. If goods are delivered by August 31, 2024, the rate is 24%, even if payment occurs after this date. For example, if a car ordered in August is delivered in September, the VAT rate is 25.5%.

If the goods arrive to the recipient on September 1, 2024, but the delivery took place in August, the VAT rate is 24%, provided that the transportation was the buyer’s responsibility. If the seller was responsible for transportation, the VAT rate is 25.5%.

Deposits

If payment before delivery is considered a deposit, the VAT rate applied will depend on the date the deposit is received. If a deposit was paid before September 1, 2024, the VAT rate is 24%.

Installment Agreements

For installment agreements, the VAT rate depends on the date of delivery. For example, if a washing machine is delivered in August and payment is made in installments, the VAT rate is 24%.

VAT on Services

The VAT rate for services depends on the date they are completed. Services rendered up to August 31, 2024, are subject to the 24% rate, even if the invoice is issued later. Services completed after September 1, 2024, will be subject to the 25.5% rate.

Deposits on Services

If a deposit for a service was paid before September 1, 2024, the VAT rate is 24%.

Continuous Deliveries

For continuous deliveries or services, the VAT rate for a given billing period will apply based on the end date of that period. For example, if rent for the entire year from June 1, 2024, to May 31, 2025, is paid after September 1, 2024, the VAT rate will be 25.5%. If the payment for the entire period was made before this date, the VAT rate is 24%.

VAT Declarations After September 1, 2024

For VAT declarations submitted for periods after September 1, 2024, the VAT rate on domestic sales will be 25.5%. In MyTax, for monthly reporting periods, you will see the field “VAT on domestic sales by tax rate: 25.5% VAT”. For quarterly and annual reporting, the VAT rate will be applied proportionally to the relevant period.

VAT Allocation

VAT is allocated to the reporting period based on the date of delivery of goods or completion of services. For deposits, the VAT rate depends on when the payment is received by the seller.