VAT Newsletter second quarter 2025

Newsletter – 11.12.2025

Please find below the VAT newsletter for the second quarter 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

Right of appeal in VAT assessments (Art 19 para 1 Austrian VAT Act in conjunction with Sec 246 para 1 Federal Tax Code)
- A partnership is a separate taxable person for VAT purposes, independent of its partner. Thus, the right of appeal lies exclusively with the partnership and not with its partners (Supreme Administrative Court 18.12.2024, Ra 2024/15/0075).
Input VAT refund procedure and VAT assessment procedure (Sec 21 para 4 and 9 Austrian VAT Act)
- The input VAT refund procedure and the VAT assessment procedure are two separate procedures that do not exclude each other. A previously granted VAT refund does not prevent a later VAT assessment (Supreme Administrative Court 14.01.2025, Ra 2023/15/0082 and Ra 2023/15/0081).
Input VAT deduction and tax-exemption for export supplies in cases of VAT fraud in third country (Sec 12 and Sec 6 para 1 no 1 Austrian VAT Act)
- The right to deduct input VAT is to be denied if the taxable person knew or should have known that the transaction was linked to VAT fraud within the EU-VAT system.
- However, awareness of tax evasion in a third country does not automatically justify denying input VAT deduction or export exemption (Supreme Administrative Court 22.01.2025, Ra 2024/13/0109).
Financing of public infrastructure (Roundabout) (Sec 12 Austrian VAT Act)
- The construction and maintenance of public infrastructure by a public-law entity is a sovereign activity outside the scope of VAT; financial contributions from interested taxable persons are deemed third-party remuneration and do not allow input VAT deduction (Supreme Administrative Court 29.01.2025, Ra 2023/15/0116)
Provision of motor vehicles to employees (Sec 3a para 1a Austrian VAT Act)
- Private use of company vehicles in Austria with non-deductible input VAT is not subject to VAT and does not count as self-supply; even if considered as rental, it remains outside VAT to ensure tax neutrality and prevent double taxation (Federal Fiscal Court, 10.01.2025 RV/2100765/2024).
VAT exemption for educational services provided by private schools (Sec 6 para 1 no 11 lit a Austrian VAT Act with)
- VAT exemption for private educational services in Austria requires official certification under ÖNORM ISO 21001 or comparable EU-certification. This certification must be in place at the time the service is provided – even if all other requirements are met. Retroactive recognition is not allowed (Federal Fiscal Court, 10.04.2025 RV/5100648/2023).

Bulgaria

AMENDMENTS TO THE VAT ACT/FISCAL CODE

Since 1 April 2025
- The threshold for mandatory VAT registration is decreased to BGN 100 000 (~ EUR 50 000) (State Gazette No. 26/ 27.3.2025, Link).

Croatia

AMENDMENTS TO THE VAT ACT/FISCAL CODE
- Until 31 March 2026
  - Extension of the reduced VAT rate of 5 % for supplies of natural gas, thermal heating (incl related fees) and wood fuels (Official Gazette NN 52/2025, Link).
NEW FISCALIZATION ACT
- Real time digital reporting (fiscalization) system based on e-invoicing
  - Extension of e-invoicing and real-time reporting to B2B transactions, starting 1 January 2026, with the Act coming into force on 1 September 2025, allowing a transition period for businesses (Official Gazette NN 89/2025, Link).

Czech Republic

TAX AUTHORITIES’ PRACTICE

VAT treatment of fuel cards
- Introduction of guidelines to clarify the VAT treatment of fuel card purchases determining that if the issuer acts on their own behalf and controls transaction terms, it is considered a supply of goods (Link).
- Additional annex to analyse specific, more complex fuel card business models that involve more actors than just supplier, issuer and cardholder (Link).

CASE LAW

Denial of VAT deduction due to fraud in chain transactions
- The Supreme Administrative Court (SAC) ruled that VAT deduction may be denied if the taxable entity knew or should have known about the fraud, with negligence alone being sufficient grounds for refusal of the deduction (Link).

Germany

TAX AUTHORITIES’ PRACTICE

Direct consumption from energy generation plants
- Electricity withdrawn directly by system operators is no longer treated as a supply of goods for VAT, only electricity fed into the grid is relevant, though free value transfers may still be taxable. Additionally, average district heating prices can no longer be used as the VAT basis; if no market price exists, the pro rata cost price applies (Letter of German Federal Ministry of Finance 31.3.2025, III C 2-S 7124/00010/002/109).

CASE LAW

Bonus payments for centralized settlement
- The ECJ and Federal Fiscal Court ruled that passing supplier bonuses through central agents to affiliates is not subject to VAT, reaffirmed in 2024 based on whether the discount occurs within or outside the supply chain (Federal Fiscal Court, 23.10.2024 – XI R 6/22).

Hungary

PLANNED AMENDMENTS TO THE VAT ACT/FISCAL CODE

Reverse charge
- From 1 January 2025 until 31 December 2026, domestic natural gas sales between taxable traders in Hungary will fall under the reverse charge VAT scheme; buyers in wholesale EU transactions must provide a prior written declaration confirming resale intent 142 (1) k) of Hungarian VAT law Nr. CXXVII/2007).
E-receipt and extension of VAT Data Reporting
- Postponement of the launch of the e-receipt system to 1 September 2026. Receipts issued via e-receipt systems or online cash registers must be reported to the tax authority upon issuance; all others within 3 calendar days (Link).
Travel Agency Services – Simplified Invoicing
- As of 1 January 2026 travel agencies applying TOMS are no longer required to state the taxable amount and VAT on invoices to non-taxable persons (e.g. a private individual) (Art. 210/A. of Hungarian VAT law Nr. CXXVII/2007)

TAX AUTHORITIES’ PRACTICE

Since 1 January 2025
- Late payment interest will be calculated monthly, with annual notifications issued once it exceeds HUF 5,000 (Art. 207 of Act on the taxation system Nr. CL of 2017).

Poland

AMENDMENTS TO THE VAT ACT/FISCAL CODE

Since 1 April 2025
- Reducing the VAT rate on the supply of menstrual cups from 23 % to 5 %;
- Clarifying the application of the 8 % rate on fertilizers and plant protection products;
- Extension of application of 0 % VAT rate to supplies of part-sea vessels and lifeboats;
- Extension of the 8 % rate for medical products authorized under previous legislation. (Link).
Since 28 February 2025
- The reverse charge mechanism for gas, electricity and emissions trading in Poland is extended until 31 December 2026, with clarified regulations (Article 145e of the Polish VAT Act, Link).

CASE LAW

Chain transaction involving export of goods
- The Polish NSA ruled that in export chain transactions, the first supply to the transport-arranging intermediary is domestic and not eligible for 0 % VAT; VAT treatment depends on ownership transfer, not Incoterms (Judgement of the Supreme Administrative Court of January 28^th, 2025, ref. I FSK 1389/21, Link).
VAT exemption on sale of real estate acquired with no VAT
- The NSA ruled that VAT exemption on property sales is not allowed if the property was acquired outside the VAT system and input VAT was non-deductible for non-legal reasons; a VAT-exempt purchase doesn’t guarantee exemption on resale (Judgment of the Warsaw Administrative Court of February 7^th, 2025, ref. I FSK 1566/21, Link).
Taxation of the sale of real estate
- The NSA ruled that the taxpayer’s real estate sales were private asset management, not business activity, and therefore not subject to VAT, making the CJEU ruling in case C-213/24 (Grzera) inapplicable (Judgment of the Warsaw Administrative Court of April 23^th, 2025, ref. I FSK 2150/21, Link).

Serbia

ADVANCE RULINGS OF THE MINISTRY OF FINANCE

VAT deduction per e-invoice
- The input VAT deduction from an e-invoice is only possible when it is received and also formally marked as accepted in the System of Electronic Invoices (SEF) (Advance Ruling of the Ministry of Finance no. 000501114 2025 10520 004 000 011 004 of 14.4.2025).
VAT treatment of supply of high bay pallet racking in the warehouse
- The supply of high-bay pallet racks in a warehouse is not considered a supply of goods in construction area, so reverse charge is not applicable for such supply (Advance Ruling of the Ministry of Finance no. 002629830 2024 10520 004 000 011 004 of 14.4.2025).

Slovakia

AMENDMENTS TO THE VAT ACT/FISCAL CODE

Since 1 April 2025
- The Slovak Financial Transaction Tax (FTT) applies to outgoing payments from Slovak bank accounts. Foreign companies are liable if they have a Slovak branch, use a Slovak account, or do business in Slovakia. FTT must be reported and paid monthly; penalties apply for non-compliance (Link).
Since 1 July 2025
- Proposal to introduce a 50 % limitation of VAT deduction for purchases, leases, imports, and related costs of passenger cars and motorcycles used for both business and private purposes, applicable until 30 June 2028 (not yet implemented) (Link).
- Slovak businesses with VAT ID and AEO status can apply an import VAT reverse charge, allowing VAT to be reported and deducted in the same return, without separate payment to customs (Link).

Slovenia

TAX AUTHORITIES’ PRACTICE

Since May 2025
- Introduction of a new chatbot from the FA to provide quick, user-friendly answers to general VAT questions (Link).
As of 1 August 2025
- All Slovenian VAT-registered taxpayers must submit two separate VAT records — one for VAT charged and one for VAT deducted — via accounting software, ZIP upload or the “Mini cash register”, starting with tax period July 2025 (Link).