Wer benötigt in Ungarn Fiskalvertretung?

Sich in der Geschäftswelt zurechtzufinden, ist nicht immer einfach, insbesondere bei grenzüberschreitenden Tätigkeiten. In diesem komplexen Umfeld spielt der Fiskalvertreter eine Schlüsselrolle.

Wie wir bereits in unserer Artikelserie über Fiskalvertretung geschrieben haben, ist die Beauftragung eines Fiskalvertreters für Unternehmen mit Sitz außerhalb der Europäischen Union (z. B. China, Vereinigte Staaten von Amerika, Vereinigtes Königreich, Schweiz usw.) zwingend erforderlich, die in Ungarn geschäftlich tätig werden möchten, aber keine feste Niederlassung im Land haben. Genauer gesagt sollten Unternehmen, die außerhalb der Europäischen Union ansässig sind und in keinem Mitgliedstaat der Europäischen Union über einen Standort verfügen, einen Fiskalvertreter in Ungarn beauftragen. Gemäß dem ungarischen Umsatzsteuergesetz müssen diese Unternehmen einen Fiskalvertreter ernennen, um ihren steuerlichen Verpflichtungen in Ungarn nachkommen zu können. Es ist wichtig, dass der Fiskalvertreter der ungarischen Steuerbehörde gemeldet wird und der Fiskalvertreter auch auf der ausgestellten Rechnung angegeben wird.

Daher ist Fiskalvertretung besonders wichtig:

• für Unternehmen aus Drittländern, die Produkte oder Dienstleistungen in Ungarn verkaufen, und
• für Unternehmen, die ungarischen Privatpersonen oder Unternehmen aus der Ferne elektronische Dienstleistungen anbieten.

Für Unternehmen innerhalb der Europäischen Union ist die Inanspruchnahme von Fiskalvertretung nicht obligatorisch, sie können diese Option jedoch wählen.

Warum sollte ein Unternehmen außerhalb der EU einen Fiskalvertreter beauftragen?

Da das Übereinkommen über die Rechtshilfe zwischen den Mitgliedstaaten außerhalb der Europäischen Union nicht anwendbar ist, sind Unternehmen mit Sitz außerhalb der EU verpflichtet, Fiskalvertretung in Anspruch zu nehmen, d. h. einen Fiskalvertreter zu ernennen. Der Fiskalvertreter haftet gesamtschuldnerisch für die Tätigkeiten und Steuerpflichten der von ihm in Ungarn vertretenen Unternehmen und ist auch für etwaige Folgen verantwortlich.

Das Unternehmen, das Fiskalvertretung anbietet, fungiert als ständiger Vertreter des Mandanten bei der Erfüllung aller steuerlichen Verpflichtungen. Das bedeutet, dass nur der Fiskalvertreter im Namen des ausländischen Unternehmens handeln kann, solange die Fiskalvertretung besteht. Das ausländische Unternehmen darf weder persönlich noch durch einen anderen Vertreter handeln.

Die Fiskalvertretung ist also eine Beziehung des Vertrauens und der Verantwortung zwischen dem Unternehmen und dem Dienstleister.

Anforderungen an den Fiskalvertreter

Fiskalvertretung kann nur von Unternehmen erbracht werden, die als Gesellschaft mit beschränkter Haftung (GmbH) oder Aktiengesellschaft (AG) in Ungarn tätig sind und in der Datenbank der ungarischen Steuerbehörde als schuldenfrei aufgeführt sind.

Darüber hinaus wurden mit dem Steuerpaket Frühjahr-Sommer 2023 in Ungarn die Vorschriften für Fiskalvertretung verschärft. Demnach müssen Unternehmen über ein gezeichnetes Kapital von 150 Millionen HUF statt 50 Millionen HUF oder über eine entsprechende Bankgarantie ausschließlich im Namen des Fiskalvertreters verfügen, um als Fiskalvertreter zu gelten. Der Fiskalvertreter muss der ungarischen Steuerbehörde das Vorliegen dieser Bedingungen zum Zeitpunkt der Annahmeerklärung der Vertretung und danach jährlich während der fortlaufenden Ausübung der Tätigkeit nachweisen.

Die neuen Bedingungen mussten bis zum 1. Januar 2025 von Steuerzahlern erfüllt werden, die zum Zeitpunkt des Inkrafttretens der Änderungen bereits als Fiskalvertreter bei der ungarischen Steuerbehörde registriert waren.

Was sind die Aufgaben eines Fiskalvertreters?

• Teilnahme am ungarischen Steuerregistrierungsverfahren
• Eröffnung eines Bankkontos für das vertretene Unternehmen (da die ungarische Steuerbehörde Umsatzsteuerrückerstattungen an ausländische Unternehmen ausschließlich auf dieses Konto überweist)
• Meldung des vertretenen ausländischen Unternehmens an die Direktion für Großsteuerzahler der ungarischen Steuerbehörde (auf Ungarisch: NAV Kiemelt Adózók Adóigazgatósága)
• Verwaltung von Steuererklärungen
• Kommunikation mit den Behörden
• Beratung zu verschiedenen Steuerfragen

Das Steuerberatungsteam von WTS Klient Ungarn verfügt über umfangreiche Fachkenntnisse und langjährige Erfahrung im Bereich der Fiskalvertretung. Wir können Sie auch als ständiger Vertreter vor der ungarischen Steuerbehörde unterstützen, Umsatzsteuererklärungen erstellen, Sie bei der Einhaltung besonderer Rechnungslegungsvorschriften in Ungarn unterstützen oder Umsatzsteueranalysen und Beratung zu internationalen und inländischen Transaktionen durchführen. Bitte wenden Sie sich an unsere Experten!

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Registration of taxable person in Slovakia

In accordance with the proposed amendments to VAT Act of Slovakia, the rules for registration of both Slovakian and foreign taxable persons will undergo significant changes. A Slovakian taxable person will become a taxable person as soon as the prescribed criteria are met and not on the date specified in the tax administrator’s decision. The threshold for income above which a Slovakian taxable person is obliged to submit an application for registration, has been raised from EUR 49,790 to EUR 50,000 or 62,500. The time period for submitting an application for registration is also shortened, i.e. within 5 days from the day a reason for registration arises (i.e. exceeding the prescribed criteria). The tax administrator will issue a registration decision within 10 days.

The conditions for the registration of a foreign taxable person will also change according to the proposed amendments to the VAT Act of Slovakia. Now such a taxable person is obliged to submit an application for VAT registration without delay, and the tax administrator is obliged to register the taxable person immediately after receiving the application.

Financial leasing, reverse-charge on import of goods, late registration

The new rules in the VAT Act of Slovakia will also affect the treatment of financial lease contracts where, at the time of conclusion, the purchase at the end of the contract represents the only economically rational choice for the lessee. Such a transfer will constitute a supply of goods and not a service.

It is also planned to introduce a reverse-charge mechanism for import of goods for domestic taxpayers who have the status of an authorised economic operator in the Slovak Republic. As a further simplification, special taxation scheme for small businesses will be introduced, as well as the possibility to deduct tax on the basis of a document other than an invoice when acquiring goods from another Member State.

Another significant change in the VAT Act of Slovakia is the introduction of some relatively strict rules for late registration as a taxpayer. The new legislation proposes to submit individual monthly tax returns for this period, together with a control statement containing the transactions on which tax liability has arisen. Once the conditions have been met, the deduction of the related input tax will be allowed.

Further changes to the VAT Act of Slovakia

Finally, the amendment would also introduce a number of minor changes, namely:

• The value of the simplified invoice is reduced to EUR 400;
• The obligation to reimburse VAT in the event of theft will be extended to any case of theft or misappropriation;
• It is proposed to change the place of supply of cultural, educational or entertainment services if they are supplied online/virtually to a non-taxable person.

Most important amendments to the Income Tax Act of Slovakia

One significant change that will affect the preparation of the 2023 tax returns in Slovakia is an amendment that will allow the deduction of employers’ expenses for the operation of their own kindergartens and childcare facilities for children up to three years of age. The employer must therefore be the founder of the facilities in question.

At the same time, the concept of ‘sports professional’ is introduced into the Slovakian law. The income of such a sports professional will be subject to withholding tax. As in the case of income from the creation and from the performance of an artistic work, the possibility will be introduced for the taxpayer to agree that no withholding tax will be levied and the sports professional will declare the income in the tax return.

The new rules will also affect the scope of taxation of incomes from non-state bond accruing to taxpayers with limited tax liability. The income in question will not be subject to tax since 2023.

With effect from April 2024, the range of buildings that are not treated as depreciable tangible asset is extended. In accordance with the new wording of the provision in question, small buildings for agricultural, forestry or hunting purposes and simple buildings for these purposes will not be regarded as depreciable tangible assets.

The amendment also introduces an exemption from taxation for in-kind income in the form of acquisition of shares by employees in start-ups.

Further changes to income taxation

Other amendments to the Slovakian Income Tax Act include the following:

• Changes to the taxation of virtual currency;
• Expansion of the range of tax-deductible expenses in the taxation of income from capital property;
• Extension of the exemption to income from the sale of stocks;
• Increase in the exemption limit for income from advertisements for charitable purposes;
• Changes in the tax bonus;
• Increase in the rate for dividends paid to an individual to 10%;
• Introduction of a minimum tax for corporations;
• Increase in the limit for the application of the reduced corporate income tax rate up to EUR 60,000.

If you want to know more about the 2024 changes to Income Tax Act and VAT Act of Slovakia or other tax issues in the country, we recommend you visit the website of Mandat Consulting, k.s. and contact the local WTS experts in Slovakia.

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Due to the extent of the floods, the Act Determining Intervention Measures for Recovery from the Floods and Landslides of August 2023 was additionally adopted, amending the laws currently in force in Slovenia and introducing specific measures. Below, we summarise the main temporary solutions of both laws in the field of taxation.

Support for the self-employed

A self-employed person in Slovenia who is unable to carry out his/her activity or whose activity significantly decreased as a result of the floods is for the period from August to December 2023 entitled to a support of EUR 1,200/month, provided that the following conditions are met:

• the activity is registered at least from 1 July until 11 August 2023;
• no outstanding liabilities towards the tax authorities at the date of submission of the declaration;
• all withholding tax returns from employment income for the last five years have been submitted;
• revenues in 2023 will decrease by at least 25% compared to 2022.

The self-employed person has to submit the declaration for the support for each month via the tax authorities’ information system (eDavki). The final deadline for submitting the monthly declarations for the entire period from August to December 2023 is 31 January 2024, with the payment on 9 February 2024.

Reimbursement of employees’ wage compensation

If an employer who has received (partial) reimbursement of wage compensation paid to employees as a result of force majeure or waiting time due to a natural disaster, has, as of 3 August 2023, paid out profits, purchased its own shares or stakes, paid management bonuses or paid part of the performance-related remuneration of management in or for the year 2023, the employer must notify the Financial Administration of the Republic of Slovenia within two months of the date of the payment.

The employer will have to return the funds received within 30 days after receipt of the decision, together with statutory interest from the date of receiving the reimbursement until the date of the repay.

Employers who fail to notify the Financial Administration of the Republic of Slovenia of their obligation to repay the funds within the prescribed period may be subject to a penalty of EUR 450 up to EUR 20,000.

One-time solidarity aid

One-time solidarity aid paid to an employee in nature or in cash in 2023 for severe flood and landslide damage is not included in the tax base of employment income up to EUR 10,000 (and not up to EUR 2,000, which is the generally applicable amount).

Before the one-time solidarity aid payment, the employee must provide the employer with appropriate proof of the damage suffered.

Additional tax incentive for donation for 2023

An additional tax incentive for donations is introduced in Slovenia for the full amount of the payments, up to a maximum of the tax base of the tax period for legal entities and natural persons carrying out independent economic activities.

The tax incentive applies to all payments up to 31 December 2023, paid to a bank account of the Republic of Slovenia, specially created for this purpose.

Prohibition to dismiss employees

An employer, who benefits from the measure of reimbursement of wage compensation for the period of waiting at home may not initiate proceedings to terminate an employment contract with an employee for business reasons, even after the measure has ceased to apply, for a period equal to the period of receipt of partial reimbursement of wage compensation.

The only exception is if the redundancy plan has already been adopted before 3 August 2023 and the employer has not claimed the right to partial reimbursement of the redundancy payments for these employees.

Disposal of equipment destroyed in a company

A Slovenian taxpayer who purchased the equipment less than three years ago and utilised the investment tax incentive under Article 55a of Slovenian Corporate Income Tax Act (CITA-2) does not have to return the investment tax incentive for the disposal of this equipment due to destruction in floods and landslides.

Solidarity working Saturday

The employer may designate one Saturday in 2023 and one Saturday in 2024 as a solidarity working Saturday, after consultation with the trade union, works council or employees.

Work performed on a solidarity working Saturday will be contributed by the employee to the Fund for the Reconstruction of Slovenia.

Employees will therefore contribute the amount of their net wage for solidarity Saturday by working on that day, based on a prior written agreement with their employer.  No social security contributions and taxes are due for payment for work on the Solidarity working Saturday.

The contribution will be calculated and paid by the employer on a special form “Calculation of contribution to the Fund for the Reconstruction of Slovenia”, including the following information:

• the employer and individual employees,
• the total amount of contribution of all employees,
• the contribution of each employee for each working Saturday.

The form is available for submission via eDavki.

The tax return will be due in the month following the solidarity working Saturday and the total amount of contributions for payment will be due within ten days of the return being submitted.

The amendments regarding the solidarity working Saturday were just adopted and are awaiting publication in the Official Journal of Slovenia.

Refund of compensation for the use of building land

Municipalities can refund all or part of the Building Land Use Tax paid to taxpayers who have suffered serious damage as a result of floods and landslides, which have endangered health and caused an inappropriate living environment.

The municipality will reimburse part or all of the contribution by decision, based on the application and criteria set by the municipality.

Special reduced VAT rate for firefighting equipment

A special reduced VAT rate of 5% is introduced for supplies of:

• standardised fire-fighting vehicles and
• special protective and rescue equipment for firefighters.

The special reduced rate may only be applied on condition that the purchaser is a public fire service or a voluntary firefighting unit in a fire brigade.

Accommodation for victims of floods and landslides

Free or reduced rent for persons, who have suffered serious damage to their personal property as a result of floods and landslides and have been forced to find new or temporary accommodation will not be treated as income until the end of 2024.

Accommodation costs incurred by a taxable person offering free or reduced rent to flood and landslide victims are tax deductible until the end of 2024.

If you need more information on the tax measures related to floods and landslides in Slovenia or you need help in preparing the written agreement for the solidarity working Saturday at your company, please visit the website of WTS Slovenia and contact the local experts of WTS Global for Slovenia.

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SAF-T in Romania in two phases

From 1 January 2022 SAF-T is also rolled out in Romania. First, only large taxpayers had to declare SAF-T in Romania through mandatory monthly filings, but from 1 January 2023 also medium sized taxpayers have to submit SAF-T on monthly basis. The rest of taxpayers, including small taxpayers and non-resident companies registered only for VAT purposes in Romania, will submit SAF-T from 1 January 2025. The obligation applies to all Romanian and foreign companies with a presence in the country registered for tax purposes in Romania.

Content of SAF-T reports 

Generally, among others, data reports submitted to the National Tax Administration Agency (ANAF) within the system of SAF-T in Romania must contain the following:

1. The master files section contains subsections for more information, such as:

• accounting accounts / journal register
• customers (identification data, analytical account, initial and final balance debtor / creditor)
• suppliers (identification data, analytical account, initial and final balance debtor / creditor)
• tax table (specific tax information)
• table of units of measurement
• table of types of analysis (information on the structure of the taxpayer’s cost centers)
• table of types of movements
• products
• stocks
• owners (details regarding stock owners)
• assets

2. Accounting records / Journal Register: information on accounting records, at transaction level, including analytical accounting accounts.

3. Source documents: information about source documents such as:

• sales invoices
• purchase invoices
• payments
• movements of goods
• asset transactions

Reporting periods for SAF-T in Romania

The submission terms for SAF-T in Romania are monthly or quarterly, depending on the VAT fiscal period. Companies submitting SAF-T on monthly basis have a grace period of six months for the first return, five months for the second return, etc.

Information regarding section “Assets” will be submitted annually, at the date when the financial statements are submitted, whilst information of section “Stocks” are submitted upon the request of the tax authorities.

If you would like to know more about the SAF-T in Romania or if you have any tax related question in the country, please visit the homepage of Ensight, the exclusive representative of WTS Global in Romania.

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Corporate income tax

The Czech recovery package would increase the standard income tax rate from the current 19% to 21% and extend the extraordinary depreciation for electric vehicles purchased between 2024 and 2028. Regarding the deductibility of tax costs, the Czech recovery package proposes to introduce a limit for the tax deductibility of costs for acquisition of company cars of category M1 to CZK 2 million (roughly EUR 85,000) from the price of the car. This limit will also limit the increase of the entry price at technical appreciation. The tax deductibility of still wine as an advertising item (gift) up to CZK 500 (roughly EUR 21) would be abolished.

Personal income tax

According to the proposals of the Czech recovery package a progressive tax rate of 23% will apply to monthly income of employees exceeding three times the average wage instead of the current four times. Also a general limit of CZK 50,000 (roughly EUR 2,110) per year for the exemption of other income of the same kind will be introduced.

Several tax exemptions will be abolished, such as:

• discount for a student;
• discount on child placement (the so-called kindergarten fee);
• deduction of expenses for trade union membership fees and examinations verifying the results of further education;
• the exemption from the provision of meals in a non-monetary form (meal vouchers, canteens) above the set limit;
• the exemption of non-cash benefits provided to employees.

Following tax exemptions will be limited:

• exemption of income from the sale of securities or shares in a company upon meeting the time test of possession of three or five years to the amount of CZK 40,000,000 (roughly EUR 1,690,000) per year per taxpayer;
• reduction of the wife/husband discount, which will now only be available to a spouse caring for a child under the age of three years;
• restrictions on the exemption of income from raffles and gambling.

Social security 

The Czech recovery package would increase the levy burden for self-employed persons by setting the assessment base at 55% of the tax base compared to the current level of 50% of the tax base. Also the minimum assessment base for calculating insurance premiums for self-employed persons would be increased from 25% of the average wage to 40%.

The proposal would reintroduce the health insurance for employees at 0.6% of the assessment base and change the conditions for participation in insurance for employees working under a work performance agreement (DPP).

Value added tax 

As part of the simplification of the VAT system the Czech recovery package would align the first and second reduced VAT rates (15% and 10%) into one reduced rate of 12%. Most goods and services currently subject to one of the reduced rates will be subject to the 12% rate under the proposal. However, some items will be reclassified.

In particular, the following are to be subject to the reduced rate of 12%:

• food;
• newspapers and magazines;
• medications;
• selected construction works;
• irregular public bus transport of passengers.

In particular, the following will be reclassified to the basic rate of 21%: 

• alcoholic and non-alcoholic beverages with the exception of tap water;
• hairdressing services;
• repair of footwear, clothing and bicycles;
• household cleaning services;
• delivery of cut flowers.

At the same time, the Czech recovery package proposes to introduce a 0% VAT rate on books. 

Real estate tax 

According to the proposal the real estate tax rates increase up to double and an indexation mechanism will be incorporated to allow the tax to be increased in line with the current inflation.

With the above-detailed Czech recovery package the government aims to reduce the public deficit from 3.5% of GDP this year to 1.8% of GDP in 2024 and 1.2% of GDP in 2025.

If you have any queries about the Czech recovery package or need to adapt to the new rules, the experts and advisors of WTS Alfery, the exclusive representative of WTS Global for the Czech Republic will be happy to provide you with professional support.

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Optional e-invoicing in Poland

A new type of invoicing has been in operation in Poland on a voluntary basis since 1 January 2022, namely electronic invoices issued using the National e-Invoice System (KSeF). E-invoices are generated in xml-format by the local financial and accounting software in accordance with the logical structure published by the Polish Ministry of Finance, and then are sent to KSeF where the purchaser may download them after a verification process in which a unique number is assigned to each e-invoice. When implementing voluntary e-invoicing in Poland, the authorities announced that, as a second step, e-invoicing will become obligatory.

The first draft law on mandatory e-invoicing in Poland

On 1 December 2022 saw the Government Legislation Centre publish a bill to amend the VAT Act and certain other legislation, according to which, as of the beginning of 2024, e-invoicing in Poland will be obligatory. As compared to the current legislation, the solution proposed in the bill is wider in terms of entities obliged to use it and the subject matter covered. The main assumption behind implementing mandatory e-invoicing is to provide tax authorities with insight into all issued invoices and thus facilitate the detection of invoice irregularities. The currently used forms of invoice (paper or electronic, e.g. PDF files) will have marginal importance after the introduction of obligatory e-invoices.

Importantly, in accordance with the bill, electronic invoices will have to be obligatorily used by taxable persons based in Poland or having a fixed establishment in Poland. Entities not covered by the obligatory electronic invoicing system will be able to use e-invoices optionally or to continue issuing invoices based on the current Polish VAT Act (outside KSeF). These entities will also receive invoices from suppliers as agreed with them (including outside the KSeF system).

The e-invoicing requirement will cover the activities that currently require an invoice in accordance with the VAT Act. Therefore, as a rule, entities subject to the e-invoicing requirement will only issue invoices via KSeF. Any invoice issued by such entities outside KSeF will not be considered an invoice according to Polish VAT regulations. Only in the case of KSeF malfunction (after the failure is removed, there are seven days for sending invoices to KSeF) or a crisis (emergency related to geopolitical situation) can invoices be issued outside KSeF. A failure to comply with e-invoicing regulations will trigger severe penalties.

Latest updates and postponement of deadlines

After an intensive public consultation, on 22 February 2023 the Government Legislation Centre published a new draft of the bill. It provides a framework for implementation of the mandatory e-invoicing in Poland. The most important provisions that have changed over the previous version of the proposal:

• Commencement date of mandatory e-invoicing in Poland has been deferred from 1 January 2024 to 1 July 2024.

• New deadline for entities with VAT exemptions to use obligatory e-invoices will be 1 January 2025.

• New deadline until invoices issued via cash registers and of cash receipts will be treated as invoices will also be 1 January 2025.

• Commencement of penalties for issuance of e-invoices outside KSeF in breach of obligation, for issuance of e-invoices not in accordance with required template, and for failure to timely submit invoices issued during KSeF malfunction or in off-line mode will also be postponed to 1 January 2025.

• KSeF e-invoices will not be obligatory in the case of business-to-consumer transactions and motorway toll, bus, train etc. tickets.

• As of 1 July 2024 any invoice changes can only be made by issuing correcting invoices.

• The use of off-line mode in invoice issuance has been extended to include also unavailability of KSeF for reasons on the part of the taxable person – e-invoices to be issued offline according to required template and submitted to KSeF on next business day.

• More precise regulations on the use of exchange rates to translate the taxable amount and VAT on e-invoices – you can use the published midrate applicable on the last business day prior to the issuance date on the invoice. This rate can be used on condition the e-invoice is issued via KSeF not later than next day after it is issued through the accounting software.

• No changes to regulations on invoice issuance before chargeability of tax – e-invoices can still be issued even 60 days prior to the chargeable date. 

Fixed establishments 

Applying the mandatory e-invoicing in Poland also to persons having fixed establishments in the country for VAT purposes exceeds the range of entities first specified in the Council Implementing Decision, which allowed Poland to impose the e-invoicing obligation only on entities based in Poland. But according to unofficial information from the Polish Ministry of Finance, this obligation was later confirmed with the European Commission after the issue was raised during public consultations. It will be introduced together with measures supporting taxable persons in correctly determining if they have fixed establishments in Poland (plans are to publish official tax guidance or a public tax ruling).

If you would like to know more about e-invoicing in Poland, or need any tax advice regarding the country please visit the homepage of WTS&SAJA Sp. z o.o., the exclusive representative of WTS Global for Poland and contact their experts.

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Change in VAT registration turnover 

One of the most important elements of the VAT changes in Bulgaria for 2023 is the change in VAT registration turnover. As of 1 January 2023, taxable persons established in Bulgaria will be subject to a mandatory VAT registration when they reach a taxable turnover of BGN 100,000 for a period encompassing the current month and 12 consecutive months prior to the current month.

The VAT registration turnover doubles compared to the previous BGN 50,000 threshold. The significant increase in the turnover requiring a VAT registration is designed as a tax relief measure for small and medium-sized enterprises which now incur significant compliance costs and which are less competitive due to the additional VAT on their goods and services.

The VAT registration turnover is meant to be further increased as of 2025 after EU Directive 2020/285 is transposed in the Bulgarian VAT Act. The new measure will, however, not affect not-established taxable persons who are subject to a VAT registration before they make any supplies taxable in Bulgaria.

New permanently reduced VAT rates

At the end of 2022 the Bulgarian Parliament transformed some of the temporarily reduced and last year already extended VAT rates into a permanent measure. The amendments to the Value Added Tax Act were published in the Bulgarian State Gazette No. 102 on 23 December 2021 and came into force on 1 January 2023.

The permanent VAT rate reduction applies to the following supplies:

• Books: 9% reduced VAT rate applies to books on a physical medium or by electronic means or both, including textbooks, learning books and learning sets, children’s picture, drawing or colouring books and music printed or in manuscript form with the exception of publications wholly or predominantly devoted to advertising and publications wholly or predominantly consisting of video content or audible music.

• Newspapers and magazines: Newspapers and magazines were initially left outside the scope of the reduced VAT rate and were subject to the standard rate of 20%. However, as of 1 January 2023 the supply of newspapers and periodicals will be taxable at the rate of 9% on a permanent basis.

• Baby food and diapers: The baby foodstuffs falling within the scope of the permanent 9% reduced VAT rate include adapted milk formula, baby porridges and cereals, vegetable, fruit and/or meat purees in jars not exceeding 250g. Baby diapers are also subject to a reduced 9% VAT rate.

Extended reduced VAT rates

The extended period of application of the reduced 9% VAT rate on the supplies listed below started on of 1 January 2023 and shall be in force until 31 December 2023:

• Restaurant and catering services: Restaurant and catering services consist of the supply of prepared or unprepared food, including take-away and delivery of food. The reduced rate does not apply to services consisting of the supply of wine, beer and alcoholic spirits. Take-away food from supermarkets and the like are excluded from the reduced rate. 

• Supplies under the special travel-agent VAT scheme: The reduced VAT rate also applies to supplies falling within the scope of the special travel-agent VAT scheme, as well as to the excursions organised by tour operators and travel agents with occasional passenger transport by bus. However, the overall application of the reduced VAT rate to these services may be called into question by the European Commission in the framework of an infringement procedure, as they already fall within the scope of a special margin scheme. 

• Supply of services for the use of sports facilities: The use of various sports facilities is also taxable under the reduced 9% VAT rate.

The super-reduced VAT rate of 0% which was introduced in the middle of 2022 and was initially designed to apply until 1 July 2023 shall now be in force for further six months until 31 December 2023. The 0% VAT rate applies to the following:

• Bread: “Bread” shall be understood as the product which is produced from the baking of dough as a mixture of wheat flour or another cereal, alone or in combination, and water, with or without adding salt, which rises using bread yeast or leaven, and technological additives (if necessary). 

• Flour: “Flour” shall be understood as the product which is a result of grinding bread wheat and which may be used for making bread and bread products.

If you would like to know more about the VAT changes in Bulgaria for 2023 or other tax rules in the country, please visit the homepage of Delchev & Partners Law Firm, the exclusive representative of WTS Global in Bulgaria.

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Windfall tax

Windfall tax, i.e. tax on unexpected profits, is introduced into the Czech tax system as a subcategory of corporate income tax for banks and companies in the energy and fossil fuel sectors that generate unexpected profits as a result of energy prices and interest rates increase. It should apply between 2023 and 2025.

Banks in the Czech Republic are subject to windfall the tax for the given tax period, in which they achieve a net interest income of at least CZK 50 million and at the same time, in 2021 they achieved the same income of at least CZK 6 billion.

Non-bank taxpayers in the Czech Republic are subject to the windfall tax for the given tax period in which the total annual net turnover from the following activities amounts to at least CZK 50 million and at the same time, in 2021 they achieved a turnover of at least CZK 2 billion from these activities:

• mining of hard coal, oil and natural gas;
• production of coke oven products and refined petroleum products;
• generation, transmission and distribution of electricity (with certain exceptions) and gas production and distribution;
• wholesale of liquid fuels, gaseous fuels and related products;
• pipeline transport by oil and gas pipeline.

The windfall tax also applies to taxpayers for the given tax period in which the total annual net turnover from the following activities amounts to at least CZK 50 million and at the same time, in 2021 the income from these activities accounted for at least 25% of their turnover:

• mining and treatment of hard coal, oil and natural gas;
• production of coke oven products and refined petroleum products.

The tax base for windfall profits is based on the amount by which the tax base (calculated for corporate income tax purposes) for the given tax period exceeds the comparative tax base plus 20% of its value. The comparative tax base is the arithmetic average of the tax bases for the years 2018 to 2021. A tax rate of 60% applies to the tax base thus calculated. 

Windfall tax has to be paid during the tax period similarly to income tax through the payment of advances calculated from the last known tax. The amount of advances paid in 2023 shall be calculated on the basis the notional windfall profits tax amount. This notional tax is determined from the data provided by the company in its 2022 notional tax notice. The notice shall state the details for calculating the windfall profits tax and shall be filed with the Specialised Tax Office of the Czech Republic no later than 3 July 2023. Advances paid during 2023 will then be offset against the actual amount of tax for 2023.

Extraordinary depreciation

Extraordinary depreciation is a special category of tax depreciation, which is not determined on annual basis, but with accuracy to months. It is applied within 12 months for assets included in the 1^st depreciation group, or within 24 months for assets included in the 2^nd depreciation group. They cannot be interrupted and their use is voluntary.

The previous Czech regulation allowed extraordinary tax depreciation only for assets acquired in 2020 and 2021. Thanks to an amendment included in the 2023 tax package for the Czech Republic, the extraordinary depreciation regime can also be applied to assets acquired in 2022 and 2023.

Limits for mandatory filing of income tax returns

The 2023 tax package for the Czech Republic increases the income limits decisive for the obligation to file personal income tax returns. Newly, taxpayers will not have to file tax returns in the following cases:

• employees with other income up to CZK 20,000 (the previous limit of CZK 6,000 still applies to the 2022 return),
• persons with total income not exceeding CZK 50,000 (until 2022, the limit was CZK 15,000).

Flat-rate scheme for natural persons

The flat-rate tax was introduced in the Czech Republic for the first time for the 2021 tax year. But due to the strict conditions for its application, very few personal income taxpayers have signed up for it. The 2023 tax package for the Czech Republic also amended this conditions which should therefore extend the use of the flat-rate tax regime and simplify the administrative obligations of small entrepreneurs overall. It is also connected with an increase in the limit for compulsory VAT registration from CZK 1 million to CZK 2 million.

The flat-rate tax allows natural persons / entrepreneurs in the Czech Republic, who are not VAT payers and have no other significant income, to avoid the need to file annual tax returns and reports for the social security administration and the health insurance company and to pay contributions to three different accounts.

In accordance with the provisions of the 2023 tax package for the Czech Republic, from 2023, instead of one lump-sum tax, a three-band taxation is newly introduced, where the amount of the lump-sum tax is graded according to the turnover achieved. For most taxpayers, the following settings apply:

• turnover up to CZK 1 million – flat tax CZK 6 thousand per month
• turnover between CZK 1 million and CZK 1,5 million – flat tax CZK 16 thousand per month
• turnover between CZK 1,5 million and CZK 2 million – flat tax CZK 26 thousand per month.

For 2023, it was possible to enter the flat-rate scheme until 10 January 2023.

Control report

From January 2023, the length and starting date of the period for responding to the tax administrator’s request to change, supplement or confirm data in the control report have been changed. Newly, it is necessary to respond within 17 calendar days of the delivery of the notice to the data box instead of 5 working days from the notice.

For selected VAT payers (natural persons, limited liability companies with a sole shareholder – a natural person and quarterly payers), certain fines for breaches of obligations related to the submission of control reports are halved.

All VAT payers are no longer subject to the first fine in a calendar year for submitting a control report within a substitute deadline.

If you have any queries about the 2023 tax package for the Czech Republic or need to adapt to the new rules, the experts of WTS Alfery, the exclusive representative of WTS Global for the Czech Republic will be happy to provide you with professional support.

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The latest version of SLIM VAT 3, i.e. a draft of amendments to the Polish VAT Act dated 8 November 2022, features, beyond the removal of legacy duties that continue to burden taxable persons but are obsolete and unnecessary in the digital tax age, some important changes over the previous proposal after the Finance Ministry took into account certain solutions proposed during the public consultation process.

SLIM VAT 2 – Tickets treated as invoices

After the introduction of the first SLIM VAT in January 2021, the second package of measures to simplify VAT regulations, has been published in May 2021. The changes of the SLIM VAT 2 affected following areas:

• Invoicing: simplified rules for correcting invoices, longer issuance deadline (up to 60 days before supply), abolition of the use of duplicates.
• Right of deduction: right of deduction through adjustment to be extended to include option to adjust by reference to one of three successive periods in which the deduction was available.
• Cross-border VAT: new rules for how to recognise correcting invoices with downward adjustments for intra-Community acquisitions and imported services.
• VAT in real estate: election of tax treatment can be made in the notarial deed.
• Split payment and relief for VAT on bad debts: funds may be transferred between VAT accounts relating to accounts with different banks, relief for VAT on bad debts will be available for longer (up to 3 years).

SLIM VAT 2 measures included a new regulation regarding the treatment of tickets as invoices. Before for a ticket to be treated as an invoice, it had to be a motorway toll ticket or a one-off ticket for transport over a distance of at least 50 kilometres.

According to the new measure, passenger carriers no longer have to issue separate invoices on request for travel below 50 kms. The customer is allowed to deduct VAT using his ticket regardless of the distance travelled, on condition the purchase is related to taxable activities.

SLIM VAT 3 – The first round 

Public pre-consultations on SLIM VAT 3 started on 31 January 2022. This package included the removal of legacy duties that continue to burden taxable persons but are obsolete and unnecessary in the digital tax age.

The main SLIM VAT 3 proposals included following changes:

• a single currency exchange rate for so-called summary correcting invoices that reduce VAT (the rate to be that ruling on the day preceding issuance of the correcting invoice);
• no more duty to hold the original invoice as evidence if you wish to deduct VAT on intra-Community acquisitions of goods;
• change of the period in which an intra-Community supply of goods must be reported when adjusting your return: from the month of supply to the month in which the tax becomes chargeable;
• no more duty to issue an advance invoice where the advance payment and the supply are made in the same period of account;
• higher threshold for small taxpayers – EUR 2 million;
• increase from PLN 500 (roughly EUR 107) to PLN 10,0000 (roughly EUR 2,130) the threshold that triggers the application of the 100% deductible proportion;
• no more duty to ensure that documents from VAT cash registers are printed on paper;
• reduced rates of penalty VAT (surcharge) related to adjustments of tax return: from 20% to 10% and from 15% to 5%;
• the Director of National Revenue Information to be appointed as the competent authority for the purposes of binding rulings on rates (WIS), excise (WIA) or tariffs (WIT).

SLIM VAT 3 – The second round

After the public pre-consultations, early August 2022, the Government Legislation Centre published the proposal for SLIM VAT 3. Then it was submitted for public consultations.

Major changes in the proposal were:

• the sales limit for establishing the small taxable person status will be increased to EUR 2 million;
• in certain cases the exchange rate to be used for correcting invoices will be the rate prevailing on the day preceding the date of the correcting invoice;
• tax authorities will be able to individually vary penalty VAT (surcharge) rates where specifically warranted by taxable person’s circumstance, maximum penalty rates of 15%, 20% and 30%;
• specification of the period for which a taxable person is to report an intra-Community supply of goods where he has received documentary evidence for the transaction after the statutory time of 3 months;
• the same authority (Director of National Revenue Information) will be empowered to issue binding rate information (WIS), binding excise information (WIA), and binding tariff information (WIT);
• no formal requirement to hold an invoice for an intra-Community acquisition of goods in order to be able to deduct the related input tax;
• no duty to issue a dedicated invoice for an advance payment if the payment is received in the same period of account in which the related supply is made. 

SLIM VAT 3 – New draft

In November 2022, the Polish Finance Ministry has provided a new draft of amendments to the VAT Act called SLIM VAT 3. The new proposal features some important changes over the previous version after the Ministry took into account certain solutions proposed during the public consultation process.

Changes between the new proposal and the previous version are following:

• commencement dated moved from 1 January 2023 to 1 April 2023;
• previously the taxable persons were required to translate currencies at the NBP or ECB rate prevailing on the last business day before issuance of summary correcting invoice (where Polish or foreign party issues a summary correcting invoice due to a discount or price reduction), now they would have the option of doing so; taxable persons could also rely on the general rule and apply the same rate as in the original invoice;
• the authorities resigned from additionally extending the current VAT exemption for investment fund management services onto special investment funds based in other EU Member States;
• the authorities resigned from allowing taxable persons the option to waive issuing an advance payment invoice if they receive all or some of the payment for the transaction in the same month as the transaction;
• changes were made to statement of payment recipient (in the event of creditor change) with respect to exoneration from solidary liability and flow of VAT account funds;
• with respect to quantification of penalty VAT at 100% of input tax in contested invoices, the process was refined by providing that the irregularity must result from intentional conduct of the taxable person or of his counterparty if known to him (previously the irregularity had to result from intentional involvement of the taxable person in a VAT fraud);
• the authorities scrapped the law which allowed them to charge maximum penalty tax where the irregularities resulted from intentional involvement of the taxable person in a VAT fraud;
• the new proposal defers to 1 July 2023 the commencement date of the law that allows VAT account to be used to also pay the so-called sugar tax, additional sugar tax and any interest on the tax.

If you would like to know more about the introduction of the SLIM VAT measures in Poland, please visit the homepage of WTS&SAJA Sp. z o.o., the exclusive representative of WTS Global for Poland.

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Abolition of mandatory VAT registration for selected groups

In order to reduce administrative burden, effective from 1 January 2023, the VAT Act of Slovakia defines selected groups of taxable persons who have the possibility to decide whether or not to register for VAT after the turnover exceeds EUR 49,790. These are primarily taxable persons who exclusively provide financial and insurance services or rent out real estate with exemption. These taxable persons also have the option to request cancellation of tax registration or withdraw their registration request. In defined cases, these taxable persons are not required to submit a separate tax return in case of not fulfilling the registration obligation.

Furthermore, the cases of assessment of late payment interest, which is related to the amount of tax on the importation of goods, have been harmonised with the cases of assessment of late payment interest related to customs debt.

New obligation for customers

In accordance with the rule of tax deduction on the customer´s side, a new provision is added to the VAT Act of Slovakia. It introduces the customer’s obligation to correct the deducted tax to the extent of the unpaid liability in the tax period, in which 100 days have passed since its due date.

The amendment to the VAT Act of Slovakia also includes the possibility of correcting the tax base on the side of the supplier in the event that the customer does not pay him the whole or in part for the supply of goods or services, and his receivable becomes unenforceable for the purposes of the VAT Act. The amendment further regulates and specifies the definition of unenforceable receivable. According to the new definition, this is such a receivable that has been due for 150 days.

New exemptions from VAT

In connection with the COVID-19 pandemic, the supply of goods or services to the European Commission, agencies and similar bodies that will be transported to another Member State for the purpose of providing them free of charge is exempt from tax. Also the acquisition of goods from another Member State for the same purpose by the European Commission, agency and similar body is exempt from tax.

From 2023, the method of determining the amount of the correction of deducted tax in the case of theft of small tangible property purchased for a purpose other than resale is established. In such a case, the legal fiction of assessing this property as if it were mandatorily depreciated property, is applied.

Furthermore, the amendment to the VAT Act of Slovakia introduces the obligation for the legal successor to continue adjusting the deducted tax even for movable investment property.

New deadlines and procedures

The amendment to the VAT Act of Slovakia also provides a united time period for the registration of a taxable person, together with the time period during which a taxable person who has not fulfilled the registration obligation or has submitted an application for registration late, is considered to be a taxpayer. This period is framed to 21 days.

The amendment also relieves the foreign taxpayer from the need to submit a nil tax return if he only carried out a supply of goods within the triangulation simplification under VAT ID assigned within the territory of the country.

At the same time, a special deadline has been introduced for paying the tax in the event that the person does not have a personal account number of the taxpayer at the time of acquiring a new means of transport from another Member State. The new deadline for paying the tax is 7 days from the date of delivery of the notification on the assignment of such an account.

The last significant innovation is the adjusted procedure of the Financial Administration in case of not submitting an application for tax registration, or its late filing. In the event that the result of a special tax return is an excessive deduction, the Financial Administration will not automatically check its eligibility through a tax audit, but may choose a different procedure, such as e.g. preliminary tax inspection.

If you want to know more about the latest amendment to the VAT Act of Slovakia or other tax issues in the country, we recommend you visit the website of Mandat Consulting, k.s. and contact the local WTS experts in Slovakia.

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