From February 1, a new Rulebook on amendments and modifications of the Rulebook on VAT has entered into force. The largest number of articles is prescribed to harmonize the VAT regulations with the Law on Fiscalization.
The rules regarding change of tax debtor, which were in force until the adoption of the new Rulebook on Value Added Tax, prescribed that the tax debtor for the sale of goods calculates VAT only on the remaining unpaid amount, i.e. excluding the down payment. But now, according to the new rules that entered into force on February 1, 2023, in all cases when the tax debtor changes, VAT is calculated on the entire amount of the fee (i.e. including the down payment), not only on the remaining amount. The VAT payer who calculated the VAT on a down payment has to reduce the calculated VAT, and the down payment payer needs to correct deducted previous tax.
The new rules also apply when the turnover of goods or services for which a down payment has been received ends on 31 January, and the turnover was performed starting from 01 February.
Therefore, if the tax debtor for the received down payment was the recipient of the down payment and if he, based on that, calculated the VAT and issued a down payment invoice with VAT, and by the time of the turnover the tax debtor has changed, the following rules are applied from the aspect of the recipient of the down payment and the aspect down payment payer.
The VAT payer who performed the turnover
- Issuing an invoice without calculated VAT which states the total amount of the base without VAT;
- Cancels the advance payment invoice and corrects the calculated VAT if the VAT payer is in possession of the document stating that the recipient of goods and services has corrected the previous tax, i.e. that he did not use the previous tax based on the down payment invoice;
The Recipient of goods and services
- Calculates VAT on the total amount of transaction;
- Corrects the previous tax if he used the previous VAT based on the down payment invoice and submits a document (confirmation) about it.
The tax debtor changes in two cases
- When the down payment is made for a turnover that is not considered as turnover in the field of construction because the value threshold condition was not met at the time of the down payment, but later, at the time of turnover this condition was met;
- When the recipient of goods or services registers in the VAT system after down payment (turnovers for which the taxpayer has prescribed the recipient of goods and services in accordance with Article 10, paragraph 2 of the Law on Value Added Tax).
