Global VAT Guide: February 2025

The February edition of the Global VAT Guide features comprehensive updates on VAT regulations and developments from The European Union, Czech Republic, Denmark, Finland, Germany, Italy, Saudi Arabia, Turkey, United Kingdom, Vietnam.

The European Union

Council Decision

On 12 December 2024, the EU Council granted a two-year extension to the reverse charge mechanism concerning supplies carried out by taxable persons undergoing liquidation or insolvency proceedings.  

This extension is part of Decision (EU) 2018/789, which provides a derogation from Article 193 of Directive 2006/112/EC (EU VAT Act) regarding VAT liability during liquidation proceedings. 

The original EU Council Decision from 25 May 2018, allowed Hungary to apply the reverse charge mechanism for VAT during liquidation or insolvency procedures. 

This was implemented to combat VAT fraud, particularly related to businesses that issued fictitious invoices but did not pay VAT. 

Under the reverse charge system, the purchasing taxpayer becomes liable for VAT, but they also gain the right to deduct it. 

This ensures that Hungary’s Tax and Customs Administration incurs fewer losses, as it reduces the chance of VAT fraud during liquidation. 

Following Hungary’s positive results in reducing VAT fraud and improving tax revenue, the EU Council has agreed to extend the derogation until 31 December 2026.

Czech Republic

Changes Announced by the Czech Statistical Office

The Czech Statistical Office has published updates on Intrastat reporting for 2025, covering several key changes: 

1. Intrastat Reporting for Monaco and San Marino: 

Monaco: Although Monaco is not part of the European Union, Council Directive 2006/112/EC applies, meaning that Intrastat reports for goods traded between Monaco and the EU will be reported as trade with France. 

San Marino: San Marino is not part of the EU and does not fall under the Common VAT Directive. As such, Intrastat reporting will not include trade with San Marino. 

2. Non-reporting of Bonuses and Discounts in Intrastat: 

Bonuses: Invoice values reported to Intrastat based on bonuses (usually given for purchasing a certain volume of goods) are not corrected. These bonuses are often granted to encourage continued purchasing over a specific period (e.g., annual, quarterly, or seasonal). 

Discounts: 

If a discount is provided after the taxable supply date, it does not need to be corrected in the Intrastat data. 

However, if a discount is granted immediately after the taxable event, the invoice value reported to Intrastat must be reduced by the value of the discount. 

3. Non-reporting of Electricity Recharging: 

Electric car recharging: Intrastat reports will not include data on the recharging of electricity for electric vehicles. 

Limiting the VAT deduction right

The Czech Government is preparing significant changes to the Statute of Limitations and the threshold for quarterly returns filing. 

The Bill amending Act No. 235/2004 Coll., on Value-Added Tax (VAT), was signed by the President on 18 December 2024, and promulgated in the Collection of Laws on 23 December 2024. 

Some of the key updates that will take effect from January 2025 include: 

• VAT Deduction Right 

• The right to deduct VAT will now be limited to 2 years, reduced from the previous 3-year period 

• Quarterly Returns Filing Threshold 

• The threshold for switching from monthly to quarterly VAT returns will increase from CZK 10 million to CZK 15 million.

New form version 2025

In January 2025, the Tax Administration of the Czech Republic released an updated version of the VAT Return and the Control List for reporting periods starting 1 January 2025. 

Some of the key changes include: 

New Reporting Boxes: The updated forms now include two newly added boxes for reporting corrections 

• Correction of Taxable Base by the Taxable Person: 

• This box is for reporting corrections related to business reasons, such as decreases (e.g., discounts, cancellations), though it also covers cases where corrections result in an increase of the taxable base. 

• These corrections must be reported when they arise during the period. 

• Correction of Tax Deduction under Section 74a: 

• This section addresses tax deductions in specific cases, notably when the taxpayer has ceased activity. It provides guidance on how to handle tax deductions that should be adjusted following the cessation of business operations.

Representative for delivery 

As part of the amendments to the Czech VAT Law (235/2004 Sb. Zákon o dani z přidané hodnoty), effective from 1 January 2025, additional compliance obligations have been introduced for non-EU businesses. 

These requirements are aimed at ensuring the electronic delivery of correspondence in line with regulatory standards. 

Below is an overview of the key points regarding these correspondence-related obligations: 

• Appointment of “Representative for Delivery” (“Zmocněnec pro účely doručování”): 

• Non-EU businesses must appoint a “Representative for Delivery” by 31 March 2025. 

• Existing Representatives with a Data Box (“datová schránka”): 

• If the non-EU business already has a “Representative for Delivery” with a data box, no further action will be required. 

• Notification of Electronic Contact Address: 

• Regardless of the above, all foreign persons (i.e., businesses registered outside the European Union) are required to provide a contact electronic address (email) by 28 February 2025. This can be done using a dedicated “Notification of Change in Registration Details” form, which must be submitted via the e-tax portal. The notification can be completed by an authorized representative acting on behalf of the taxpayer. 

• Multiple Representatives for Delivery: 

• In cases where the non-EU business has more than one “Representative for Delivery,” the circumstances should be reviewed to ensure compliance with the newly introduced rules. Specifically, according to Article 98a (2) of the Czech VAT Law, “A foreign person may choose only one agent for the delivery of documents in the area of value added tax

Finland

The Finnish Tax Administration (VERO SKATT) has updated its guidance for foreign VAT refund procedures for non-EU businesses, with the changes coming into effect on 20 January 2025. 

The updates are as follows: 

• Section 1.2: Rates of VAT 

• The VAT rates have been updated to reflect the latest changes. 

• Section 1.3: Contact Details 

• The address of the Finnish Tax Administration’s office has been added to the guidance for easier contact and correspondence. 

• Section 2: Who is entitled to a refund? 

• This section has been updated with information on intra-community acquisitions by small business operations run by foreigners: 

• Small businesses are not obligated to notify if they are registered in the EU VAT system for small businesses. 

• Small businesses are not obligated to notify if the total amount of intra-community acquisitions during the current and previous calendar year is EUR 10,000. 

• Section 3.1.3: Reverse Charge 

• New information has been included regarding the VAT liability for construction services provided to machinery, equipment, and furniture used for special activities on a property. 

• Section 3.1.4: Special VAT Scheme 

• This section has been added to explain the right of a foreign business utilizing special VAT arrangements to receive a VAT refund. 

It is important to note that the application form for VAT refunds, VEROH 9550e 1.2019 APPLICATION FOR REFUND OF VAT, has not changed since 2019. 

Germany

Starting November 2024, the Federal Central Tax Office (BZSt) began the phased introduction of the Wirtschafts-Identifikationsnummer (W-IdNr.), a unique Economic Identification Number designed to streamline tax and administrative processes for businesses. 

The W-IdNr. follows the format: 

“DE” followed by a 9-digit sequence, and an additional 5 digits used to identify the economic activity. 

Businesses already possessing a VAT ID number for intracommunity trade (i.e., beginning with DE followed by a 9-digit sequence) will use this VAT ID as their W-IdNr. 

Newly registered businesses will receive their W-IdNr. immediately upon registration. 

Existing businesses without an EU-valid VAT ID will have their W-IdNr. assigned gradually until 2026. 

W-IdNr. will be provided electronically via ELSTER or through other communication channels dedicated to the business’s authorized representatives. 

Starting 1 January 2025, businesses must indicate their W-IdNr. in a dedicated box on the Periodic (Preliminary) VAT Return for applicable reporting periods. 

Intrastat threshold 2025

Country	File	Reporting Type	Amount
Austria	Intrastat Arrivals	Simplified Reporting	EUR 1,100,000.00
Austria	Intrastat Dispatches	Simplified Reporting	EUR 1,100,000.00
Austria	Intrastat Arrivals	Detailed Reporting	EUR 12,000,000.00
Austria	Intrastat Dispatches	Detailed Reporting	EUR 12,000,000.00
Belgium	Intrastat Arrivals	Simplified Reporting	EUR 1,500,000.00
Belgium	Intrastat Dispatches	Simplified Reporting	EUR 1,000,000.00
Belgium	Intrastat Arrivals	Detailed Reporting	EUR 25,000,000.00
Belgium	Intrastat Dispatches	Detailed Reporting	EUR 25,000,000.00
Bulgaria	Intrastat Arrivals	Simplified Reporting	BGN 1,700,000.00
Bulgaria	Intrastat Dispatches	Simplified Reporting	BGN 2,200,000.00
Bulgaria	Intrastat Arrivals	Detailed Reporting	BGN 17,000,000.00
Bulgaria	Intrastat Dispatches	Detailed Reporting	BGN 36,100,000.00
Croatia	Intrastat Arrivals	Simplified Reporting	EUR 450,000.00
Croatia	Intrastat Dispatches	Simplified Reporting	EUR 300,000.00
Cyprus	Intrastat Arrivals	Simplified Reporting	EUR 350,000.00
Cyprus	Intrastat Dispatches	Simplified Reporting	EUR 75,000.00
Cyprus	Intrastat Arrivals	Detailed Reporting	EUR 2,700,000.00
Cyprus	Intrastat Dispatches	Detailed Reporting	EUR 5,800,000.00
Czech Republic	Intrastat Arrivals	Simplified Reporting	CZK 15,000,000.00
Czech Republic	Intrastat Dispatches	Simplified Reporting	CZK 15,000,000.00
Czech Republic	Intrastat Arrivals	Detailed Reporting	CZK 30,000,000.00
Czech Republic	Intrastat Dispatches	Detailed Reporting	CZK 30,000,000.00
Denmark	Intrastat Dispatches	Simplified Reporting	Between DKK 11,300,000.00 and DKK 16,500,000.00
Denmark	Intrastat Arrivals	Detailed Reporting	DKK 41,000,000.00
Denmark	Intrastat Dispatches	Detailed Reporting	DKK 16,500,000.00
Estonia	Intrastat Arrivals	Simplified Reporting	NA – Form phased out for Reporting periods starting 1 Jan 2025
Estonia	Intrastat Dispatches	Simplified Reporting	EUR 350,000.00
Finland	Intrastat Arrivals	Simplified Reporting	EUR 800,000.00
Finland	Intrastat Dispatches	Simplified Reporting	EUR 800,000.00
France	Intrastat Arrivals	Simplified Reporting	From 1 Jan 2022 – the obligation to file Intrastat is not determined via assessing is a reporting threshold reached / exceeded Obligation to file Intrastat only upon getting a letter from the Administration. In case the taxpayer did not get such a letter – obligation to only file VIES.
France	Intrastat Dispatches	Simplified Reporting	From 1 Jan 2022 – the obligation to file Intrastat is not determined via assessing is a reporting threshold reached / exceeded.  Instead – obligation to file Intrastat only upon getting a letter from the Administration.  In case the taxpayer did not get such a letter – obligation to only file VIES.
Germany	Intrastat Arrivals	Simplified Reporting	EUR 800,000.00
Germany	Intrastat Dispatches	Simplified Reporting	EUR 500,000.00
Germany	Intrastat Arrivals	Detailed Reporting	EUR 49,000,000.00
Germany	Intrastat Dispatches	Detailed Reporting	EUR 52,000,000.00
Greece	Intrastat Arrivals	Simplified Reporting	EUR 200,000.00
Greece	Intrastat Dispatches	Simplified Reporting	EUR 90,000.00
Hungary	Intrastat Arrivals	Simplified Reporting	HUF 400,000,000.00
Hungary	Intrastat Dispatches	Simplified Reporting	HUF 160,000,000.00
Hungary	Intrastat Arrivals	Detailed Reporting	HUF 5,500,000,000.00
Hungary	Intrastat Dispatches	Detailed Reporting	HUF 15,000,000,000.00
Hungary	Intrastat Arrivals	Extended Detailed Reporting	Enterprises involved in processing (nature of transaction codes 41, 42, 51, 52) – Must Report Irrespective of Threshold
Hungary	Intrastat Dispatches	Extended Detailed Reporting	Enterprises involved in processing (nature of transaction codes 41, 42, 51, 52) – Must Report Irrespective of Threshold
Ireland	Intrastat Arrivals	Simplified Reporting	EUR 750,000.00
Ireland	Intrastat Dispatches	Simplified Reporting	EUR 750,000.00
Ireland	Intrastat Arrivals	Detailed Reporting	EUR 5,000,000.00
Ireland	Intrastat Dispatches	Detailed Reporting	EUR 34,000,000.00
Italy	Intrastat Arrivals	Simplified Reporting	Quarterly amount >= 350,000 euros in at least one of the previous 4 quarters
Italy	Intrastat Dispatches	Simplified Reporting	Quarterly amount >= 100,000 euros in at least one of the 4 previous quarters
Italy	Intrastat Arrivals	Detailed Reporting	EUR 20,000,000.00
Italy	Intrastat Dispatches	Detailed Reporting	EUR 20,000,000.00
Latvia	Intrastat Arrivals	Simplified Reporting	EUR 350,000.00
Latvia	Intrastat Dispatches	Simplified Reporting	EUR 200,000.00
Latvia	Intrastat Arrivals	Detailed Reporting	EUR 5,000,000.00
Latvia	Intrastat Dispatches	Detailed Reporting	EUR 7,000,000.00
Lithuania	Intrastat Arrivals	Simplified Reporting	EUR 570,000.00
Lithuania	Intrastat Dispatches	Simplified Reporting	EUR 400,000.00
Lithuania	Intrastat Arrivals	Detailed Reporting	EUR 7,000,000.00
Lithuania	Intrastat Dispatches	Detailed Reporting	EUR 10,000,000.00
Luxembourg	Intrastat Arrivals	Simplified Reporting	EUR 250,000.00
Luxembourg	Intrastat Dispatches	Simplified Reporting	EUR 200,000.00
Luxembourg	Intrastat Arrivals	Detailed Reporting	EUR 375,000.00
Luxembourg	Intrastat Dispatches	Detailed Reporting	EUR 375,000.00
Luxembourg	Intrastat Arrivals	Extended Detailed Reporting	EUR 4,000,000.00
Luxembourg	Intrastat Dispatches	Extended Detailed Reporting	EUR 8,000,000.00
Malta	Intrastat Arrivals	Simplified Reporting	EUR 700.00
Malta	Intrastat Dispatches	Simplified Reporting	EUR 700.00
Netherlands	Intrastat Arrivals	Simplified Reporting	From 1 Jan 2023 Liability to report – not upon exceeding threshold – but upon being selected via Sampling Method
Netherlands	Intrastat Dispatches	Simplified Reporting	From 1 Jan 2023 Liability to report – not upon exceeding threshold – but upon being selected via Sampling Method
Northern Ireland	Intrastat Arrivals	Simplified Reporting	GBP 500,000.00
Northern Ireland	Intrastat Dispatches	Simplified Reporting	GBP 250,000.00
Northern Ireland	Intrastat Arrivals	Detailed Reporting	GBP 24,000,000.00
Northern Ireland	Intrastat Dispatches	Detailed Reporting	GBP 24,000,000.00
Poland	Intrastat Arrivals	Simplified Reporting	PLN 6,200,000.00
Poland	Intrastat Dispatches	Simplified Reporting	PLN 2,800,000.00
Poland	Intrastat Arrivals	Detailed Reporting	PLN 105,000,000.00
Poland	Intrastat Dispatches	Detailed Reporting	PLN 150,000,000.00
Portugal	Intrastat Arrivals	Simplified Reporting	EUR 650,000.00
Portugal	Intrastat Dispatches	Simplified Reporting	EUR 600,000.00
Portugal	Intrastat Arrivals	Detailed Reporting	EUR 6,500,000.00
Portugal	Intrastat Dispatches	Detailed Reporting	EUR 6,500,000.00
Romania	Intrastat Arrivals	Simplified Reporting	RON 1,000,000.00
Romania	Intrastat Dispatches	Simplified Reporting	RON 1,000,000.00
Romania	Intrastat Arrivals	Detailed Reporting	RON 10,000,000.00
Romania	Intrastat Dispatches	Detailed Reporting	RON 20,000,000.00
Slovakia	Intrastat Arrivals	Simplified Reporting	EUR 1,000,000.00
Slovakia	Intrastat Dispatches	Simplified Reporting	EUR 1,000,000.00
Slovenia	Intrastat Arrivals	Simplified Reporting	EUR 240,000.00
Slovenia	Intrastat Dispatches	Simplified Reporting	EUR 270,000.00
Slovenia	Intrastat Arrivals	Detailed Reporting	EUR 4,000,000.00
Slovenia	Intrastat Dispatches	Detailed Reporting	EUR 9,000,000.00
Spain	Intrastat Arrivals	Simplified Reporting	EUR 400,000.00
Spain	Intrastat Dispatches	Simplified Reporting	EUR 400,000.00
Sweden	Intrastat Arrivals	Simplified Reporting	SEK 15,000,000.00
Sweden	Intrastat Dispatches	Simplified Reporting	SEK 12,000,000.00

Italy

Fiscal Representative

In accordance with the Decrees dated 4 December 2024 and 9 December 2024, additional guarantee requirements are being implemented for non-EU businesses that must appoint a fiscal representative in Italy: 

• 48-Month Guarantee: 

• The Italian fiscal representative is required to present a guarantee for a period of 48 months. The amount of the guarantee will vary depending on the number of entities represented. 

• 36-Month Guarantee: 

• A guarantee for a minimum amount of EUR 50,000 is required if the non-EU business conducts intra-community operations for which a VIES VAT number is necessary. (This minimum amount is expressed as “per un valore massimale minimo di euro 50.000,00”.) 

These guidelines are expected to be released within 120 days from the date of publication of the Decree. 

After the release of the Procedural Guidelines, businesses will have 60 days to present the required guarantee. 

Failure to submit the required guarantee within the specified timeframe will lead to the initiation of a procedure to automatically exclude the respective VAT number from the VIES VAT numbers database. 

Non-EU businesses from countries that have a mutual assistance agreement with Italy (e.g., United Kingdom and Norway) are exempt from the requirement to appoint a fiscal representative. 

As a result, they are not subject to the newly introduced guarantee requirements.

Saudi Arabia

Extend Tax Amnesty to 30 June 2025

On 29 December 2024, the Zakat, Tax and Customs Authority (ZATCA) announced the extension of their 2024 Cancellation of Fines and Exemption of Financial Penalties Initiative until 30 June 2025. 

This initiative provides exemptions from penalties for various tax-related infractions, including: 

• Late registration in all tax laws 

• Late payment of taxes 

• Late filing of returns 

• VAT return correction fines 

• Penalties for violations related to e-invoicing regulations and general VAT provisions 

To benefit from the initiative, taxpayers must: 

• Be registered under the applicable tax laws 

• Submit all previously non-submitted returns to ZATCA 

• Pay all the principal tax debts associated with the returns being submitted or modified 

Taxpayers are also eligible to request an instalment payment plan from ZATCA, provided the application is submitted while the initiative is still in effect, and all due instalments are paid by the deadlines specified in the Authority-approved instalment plan. 

ZATCA emphasized that the initiative does not cover penalties related to tax evasion, penalties paid before the initiative’s effective date, or penalties related to returns due after 31 December 2024. 

Turkey

Simplified invoices threshold

On 30 December 2024, the Ministry of Treasury and Finance published Communique No. 577 in the Official Gazette, updating the thresholds for 2025 based on the revaluation rate. 

One of the significant updates outlined in the communiqué is the revised threshold for issuing simplified invoices. 

Starting from January 2025, the threshold for issuing simplified invoices will increase to TRY 9,900, up from TRY 6,900 in 2024. 

This change impacts businesses and taxpayers who issue invoices below this threshold, and it is important to ensure compliance with the updated regulations moving forward. 

United Kingdom

HMRC updated postal address

On 20 December 2024, HMRC posted an update to their Direct Debit authorization guidelines. 

To remind taxpayers, the Direct Debit process allows HMRC to automatically withdraw or receive tax payments from a taxpayer’s account on the due date. 

This service has been available since 2016 and can be accessed via HMRC’s online services. 

If multiple signatories are required, a paper form is available as an alternative. 

The recent update changes the address on the paper form to which it must be sent for granting Direct Debit authorization. The new address is as follows: 

HMRC Payments 

VAT/CT61 

HM Revenue and Customs 

BX9 1XD 

Taxpayers wishing to use the paper form for Direct Debit authorization should ensure they send it to this updated address. 

Vietnam

Low-value imported goods subject to VAT and import duty

On 3 January 2025, the Prime Minister of Vietnam published Decision No. 01/2025/QD-TTg, which annuls Decision No. 78/2010/QD-TT dated 30 November 2010. 

Under the newly adopted decision, effective from February 18, 2025, low-value imported goods (valued at VND 1,000,000 or approximately 38 EUR) sent via express delivery services will now be subject to value-added tax (VAT) and import duty. 

This change marks a shift in Vietnam’s approach to low-value imports, ensuring that even smaller shipments will be subject to taxation upon entry. 

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