Amendments to the Law on VAT

Reduction of the taxable amount and adjustment of input tax from 01.01.2024:

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• In the case of revocation or various types of discounts, the taxable person who supplied the goods or services can reduce the taxable amount, provided that the taxable person to whom the goods or services were supplied is informed the reduction has been made

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• The taxable amount can be reduced in the same way in case of uncollectibility of all or part of overdue receivables that have not been collected for more than one year within six months from the date of the right to reduction and if all actions for insuring debt payment were undertaken with due diligence (if the action is taken against the claim or the claim is the subject of enforcement procedure, or a settlement with the debtor, who is not an associated party, was reached)

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• The taxable person is obliged to notify the competent office of the Tax Administration about the reduction made electronically within the deadline for submitting the VAT return for the taxation period in which the reduction was made.

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• If the taxable person, after reducing the taxable amount, subsequently partially or fully collects the claim, he is obliged to increase the taxable amount by the corresponding amount.

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• The taxable person must adjust the input tax deduction in the appropriate amount if the supplier subsequently reduced the taxable amount and VAT obligation for that delivery. This should be done in the taxation period in which he received a notification from the supplier about the reduction of his tax amount.
• If the taxable person does not adjust the input tax deduction, the competent office of the Tax Administration debits him for the corresponding amount of the used input tax deduction that he was obliged to adjust, issues a tax decision, and an appeal does not delay the execution of the decision.

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• The Ordinance will prescribe the content of the notification to the Tax Administration on the reduction of the taxable amount.

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• Note: The above is valid for invoices issued from January 1, 2024, while the reduction of the taxable amount for invoices issued until the end of 2023 is made according to the rule that the taxable person who supplied the goods or service may correct the VAT amount if the taxable person to whom the goods or services were supplied corrects the deduction of input tax and notifies the supplier in writing