VAT Newsletter first quarter 2026

Please find below the VAT newsletter for the first quarter of 2026 highlighting the latest developments in the field of VAT in:

Austria, Bulgaria, Croatia, Czech Republic, Germany, Hungary, Poland, Romania, Serbia, Slovakia and Slovenia.

Austria

CASE LAW

• Taxable consideration vs nontaxable damage compensation (Sec 1 para 1 no 1 Austrian VAT Act)
  • Penalties for early termination or non‑payment of an online entertainment service contract still qualify as taxable remuneration – and not as damage compensation –  for the services agreed upon (Supreme Administrative Court 11.11.2025, Ro 2025/13/0018).

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• Since 1 January 2026
  • The reporting threshold for intra- EU imports increased from EUR 1,100,000 to EUR 5,000,000 and for intra-EU exports from EUR 1,100.000 to EUR 1,200,000 (BGBI No. 186/2021 from 13.02.2026).

Bulgaria

AMENDMENTS TO VAT ACT/FISCAL CODE

• Since 1 January 2026
  • The special scheme for small enterprises entered into force (Link).

Croatia

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• Since 1 January 2026
  • VAT return changes: Food donations are now reported directly in the VAT return, replacing the separate DONH form.
  • Advance payments: Same tax period: one e-invoice for the supply (no change). Different tax periods: issue of an e-invoice for the advance payment, then a cancellation e-invoice at the time of supply, followed by a final e-invoice for the full amount at the time of supply (Official Gazette NN 151/2025 2025 (Link) and NN 11/2026 (Link)).
  • Floating VAT (planned): On 10 April 2026, amendments to the VAT Act were published introducing “floating VAT”, which allows the Government, under special and time-limited circumstances—particularly in the event of energy market disruptions—to temporarily adjust VAT rates on excise-duty energy products to ensure market stability and consumer protection (Link).

Czech Republic

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• Since 1 July 2025
  • The General Financial Directorate (GFD) has issued guidance on major VAT changes for real estate (new buildings):
    • The time test for mandatory VAT taxation is reduced from 60 months to 23 months following the month of completion; supplies outside this period are generally VAT exempt.
    • Optional VAT taxation for real estate supplies remains available but will now also require the consent of a person registered for VAT in another EU Member State.
    • Building land is always taxable (21%); other land remains exempt.
    • Housing definitions will be based on RÚIAN (Register of Territorial Identification, Addresses and Real Estate), with updated rules for social housing using a unified floor area method.
    • Reduced VAT rates apply only to social housing and depend on the building type and completion stage for construction works (Link).

CASE LAW

• Preliminary ruling to CJEU
  • The Supreme Administrative Court asked the CJEU whether interest must be paid on VAT amounts over collected under securing orders.
  • Tax authority had collected VAT later reduced, without paying interest on the excess.
  • The key issue is whether EU principles (neutrality and proportionality) require interest to be paid on over-collected amounts.
  • SAC doubts compatibility of Czech law, which provides no automatic interest. Proceedings are paused pending the CJEU decision (Link).

Germany

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• Since 1 January 2026
  • Food served in restaurants, catering, cafés, canteens, schools and childcare facilities is permanently taxed at 7%. Beverages remain taxed at 19% (Sec. 12(2) no. 15 German VAT Act).
• Import VAT when using centralizes customs clearance
  • Import VAT under centralised customs clearance (Art. 179 UCC) is due at the place where the goods are presented, even if the declaration is filed in another EU Member State (Sec. 21b German VAT Act).

TAX AUTHORITIES’ PRACTICE

• VAT treatment of permanently loss-making entities
  • The Federal Ministry of Finance clarified that loss making, subsidised entities may qualify as taxable persons and may deduct input VAT, focusing on whether a genuine supply for consideration within an economic activity exists (Letter of German Federal Ministry of Finance 20.01.2026, III C 2 – S 7106/00069/003/117).

Hungary

RECENT HIGHLIGHTS

• VAT deduction – new milestone (Curia opinion 1/2025 KK)
  • VAT deductions may only be denied if tax authorities can demonstrate active participation in fraud or a failure by the taxpayer to take reasonable preventive measures (1/2025. (XII. 09.) KK vélemény az 5/2016. (IX. 26.) KMK vélemény felülvizsgálatáról |Kúria).
• VAT report filing frequency for retroactive registrations
  • A VAT registration with retroactive effect in Hungary requires filing monthly VAT returns for all past periods, instead of the previous quarterly filing (Act CL of 2017 on the Rules of Taxation, annex 2, part I/B, point 3, subpoint 3.1, point 3.1.14).

PREPARING FOR VIDA

• Since 11 February 2026
  • A new system (CAS) allows third-country travelers to validate VAT refunds via self-service kiosks (Digital VAT refund pilot (Budapest Airport)) (Link).
• As of 1 January 2027 (planned) Transitioning to digital tax returns
  • The ÁNYK form‑filler will be phased out by end‑2026. Taxpayers are encouraged to use the eVAT (eÁFA) system, supported by educational resources to ease the transition and reduce administrative burden (Link).
• New electronic invoicing standards [as of VIDA implementation, not announced, technical preparation phrase]
  • Paper invoices and unstructured PDFs will be phased out. Accredited invoicing software is required, while the Tax Authority offers free archiving and a taxpayer invoicing tool (Link).

Poland

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• Since 1 February 2026
  • A new JPK_VAT (electronic VAT return) structure applies intending to align VAT reporting with the mandatory National e-Invoicing System (KSeF) (Link).

PLANNED AMENDMENTS TO THE VAT ACT/FISCAL CODE

• VAT treatment of “no-show” fees and additional charges for violation of hotel terms and conditions
  • No-show or late cancellation fees are out of scope of VAT, as they are treated as compensation rather than payment for an accommodation service. Additional charges for breaches of hotel rules (e.g., smoking, property damage) are considered as part of the accommodation service and increase the tax base (Tax ruling ref. 0113-KDIPT1-2.4012.1037.2025.2.AB, Link).

Romania

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• Since 1 January 2026
  • Reduction of administrative burden as taxpayers are no longer required to respond to compliance notifications triggered by discrepancies in automatically generated e-VAT forms used for risk assessment (Emergency Ordinance 89/2025 on fiscal-budgetary measures).
• Since 1 March 2026
  • Phased increase of the turnover threshold for applying the VAT cash accounting system is scheduled from RON 4,500,000 to RON 5,000,000 for the period 1 March – 31 December 2026, and further to RON 5,500,000 starting with 1 January 2027 (Emergency Ordinance 8/2026 on fiscal-budgetary measures).

Serbia

AMENDMENT TO THE RULEBOOK ON ELECTRONIC INVOICING

• Since 1 January 2026
  • For periodic invoices (water, electricity, gas, heating/cooling), the supply is deemed to occur on the last day of the invoicing period.
• Since 1 April 2026
  • Expanded definition of tax debtor (includes persons issuing unjustified VAT internal invoices and recipients of certain investment-gold transactions);
  • Mandatory tax base corrections must be made by the day before filing the VAT return, but no later than the 10th of the following month;
  • Input VAT deduction is allowed if the internal invoice is issued by the same deadlines (before filing or by the 10th of the next month), regardless of when the liability arose. Corrections follow the same rule (VAT Act („Official Gazette RS“, no. 84/2004,…,138/2022, 94/2024 and 109/2025).

AMENDMENTS TO THE VAT RULEBOOK

• Since 1 April 2026
  • The return of goods on any basis is no longer considered a new supply of goods, but a decrease of the tax base.
  • The deadline for issuing an internal invoice is extended to the 12th day of the calendar month following the end of the tax period (VAT Rulebook ’’Official Gazette RS’’, no. 37/2021, 64/2021, 127/2021, 49/2022, 59/2022, 7/2023, 15/2023, 60/2023, 96/2023, 116/2023, 29/2024, 65/2024, 73/2024, 101/2024, 107/2024 i 30/2026).

Slovakia

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• Since 1 January 2026
  • Ex officio VAT grouping: Tax authorities may group linked Slovak taxpayers to prevent VAT avoidance (e.g., artificial turnover splitting).
  • Tax representative rule removed: No more tax representative requirement for certain intra‑EU acquisitions.
  • E-invoicing delivery service (transitional phase 2026): A certified e-invoice delivery system (“digital postman”) is introduced as a step toward mandatory e-invoicing (mandatory e-invoicing starts 2027 (domestic) and 2030 (cross-border)).
  • Input VAT deduction for vehicles: Transitional rules are clarified and extended; Now apply to “long-term assets” (not only investment assets) and cover vehicles regardless of acquisition cost (Link).

Slovenia

AMENDMENTS TO THE VAT ACT/FISCAL CODE

• Domestic reverse charge
  • Until the end of 2025, mandatory local reverse charge according to Article 76a of VAT Act for B2B transactions covers only construction services under Group F (SCA)
    • From 2026, it also covers:
      • Development of building projects under M/68.120 of SCA
      • Cleaning of newly built premises after construction under O/81.220 of SCA (Link).

Take a look at some of our latest VAT newsletters:

• VAT Newsletter fourth quarter 2025
• VAT Newsletter third quarter 2025

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