Global VAT Guide: January 2025

The January edition of the Global VAT Guide features comprehensive updates on VAT regulations and developments from Belgium, Estonia, Finland, France, Germany, Hungary, Latvia, Lithuania, Poland, Portugal, Slovakia, Sweden, Bosnia and Herzegovina, and Serbia.

Belgium

To facilitate businesses, the Belgian authorities have introduced an option allowing businesses to grant multiple Biztax and/or VAT mandates to different agents.

As a result, the Biztax and VAT mandates are no longer unique.

A business can now have a maximum of three different representatives at the same time for these two types of mandates.

If an attempt is made to create a fourth mandate of the same type, one of the active mandates must be terminated.

Estonia

Effective 1 January 2025, Estonia’s Statistics Office announced the removal of the obligation to submit the Intrastat Arrival Questionnaire.

After conducting a thorough review over the past three years, Estonian authorities have determined that the collection of Arrivals data is no longer necessary.

As a result, this requirement will be waived in the Intrastat reporting process.

The official announcement clarified that opting out of the Arrivals data collection will not result in any changes to the existing XML format or other complex file types used for Intrastat declarations. Businesses will be able to continue using their current file formats without modification.

Additionally, the announcement outlined several updates to the Combined Nomenclature:

• 34 commodity codes have been deleted.
• 49 new codes have been added.
• The description of one commodity code has been revised.

Estonia’s Statistics Office also confirmed that there will be no change to the Intrastat statistical threshold for dispatches, which will remain at EUR 350,000 the same as in 2024.

Finland

On 3 January 2025, VeroSkatt, Finland’s tax authority, released a new version of the VAT return form – Form Specimen – for paper submissions.

This update incorporates the latest changes made to the electronic version of the form in September and November 2024.

Key Updates:

• Increased VAT Rate: The VAT rate on domestic sales has increased from 24% to 25.5%.
• Change in VAT Threshold Relief: The box titled “A person entitled to the lower VAT threshold relief must meet the following requirements” has been removed from the form.

These changes are important for businesses to ensure accurate reporting and compliance with the updated tax regulations starting in 2025.

France

On 12 December 2024, the latest version of the French VAT Return was published, applicable for reporting periods starting 1 January 2025.

The new updates introduce changes related to the following areas:

• Electricity Excise Duty
• Natural Gases
• Coals
• Non-Road Agricultural Diesel

These changes are crucial for ensuring accurate VAT reporting and compliance in the upcoming year. Businesses involved in these sectors should familiarize themselves with the updated requirements to ensure full compliance starting in 2025.

Germany

On 9 December 2024, the Federal Ministry of Finance issued an official letter outlining important changes for 2025.

These updates include revisions to the VAT return (Umsatzsteuer-Voranmeldung) and the Advance Payment Procedure (Vorauszahlungsverfahren), as well as new processes related to the special advance payment for the year.

Key Updates:

• Revised VAT Return and Advance Payment Procedure: Updates to both the VAT return and the Advance Payment Procedure for 2025.
• Special Advance Payment Process: Introduction of the application process for the permanent extension and registration of the special advance payment for 2025 (Antrag auf Dauerfristverlängerung und Anmeldung der Sondervorauszahlung).

Notable VAT Return Changes:

• Economic Identification Number: The revised VAT return will now require the inclusion of the economic identification number, applicable to both the VAT return and the Advance Payment Procedure.
• Small Business Regulation Adjustments: Changes to the small business regulation (§ 19 UStG) are also included in the updates.

These revisions are essential for businesses to comply with VAT requirements in 2025, and companies should familiarize themselves with these changes to ensure compliance.

Hungary

B2B e-Invoicing for electricity and natural gas to be implemented

Starting from 1 January 2025, Hungary will implement a mandatory e-invoicing system for all Business-to-Business (B2B) transactions within the electricity and natural gas sectors.

This new regulation aligns with the country’s ongoing efforts to digitize the tracking of energy consumption, as outlined in the existing Government Decree No. 273/2007 on electricity and Decree No. 19/2009 on natural gas.

These decrees have already laid the foundation for the digital transformation in consumption monitoring, which will now extend to the invoicing process.

Under the new mandate, all stakeholders in the energy sector—including electricity and natural gas suppliers, traders, distributors, and transmission system operators—are required to comply with this e-invoicing directive. The move is aimed at enhancing transparency, efficiency, and accuracy in the sector, while streamlining the administrative burden associated with traditional invoicing methods.

Periodic Return ÁFA BEVALLÁS 2465A  – Control List – 2465M  – 2025 forms version published

On 4 December 2024, the Hungarian authorities published the draft versions of the VAT Return and M-Sheet for reporting periods beginning 1 January 2025.

These drafts introduce several important changes:

• VAT Return: New Reporting Boxes
  • The updated VAT Return now includes newly added boxes to report:
    • VAT related to invoice corrections
    • Deductible VAT from reverse charge transactions
    • Agricultural process-related activities
    • Sales and purchases of natural gas

• M-Sheet: Changes in Rounding
  • The M-Sheet will no longer require rounding to the nearest thousand, providing more precise reporting.

The official announcement notes that further changes to these documents may still be possible before their final implementation.

Reverse charge for natural gas and other VAT changes in 2025

On 11 December 2024, the Hungarian Tax and Customs Administration (NAV) published a clarifying blog post regarding the Reverse Charge mechanism for Business-to-Business (B2B) natural gas supplies.

This update is part of the Autumn 2024 Tax Package, which was adopted by the Hungarian Parliament on 15 October 2024, amending Hungary’s tax laws for 2025.

The changes bring a significant update to VAT rules for the energy sector, particularly for businesses involved in the trade of natural gas.

From 1 January 2025 to 31 December 2026, all B2B sales of natural gas between registered taxable established domestic gas suppliers and other registered taxable established traders will be subject to the reverse charge mechanism.

Under this system, VAT liability shifts from the seller to the buyer. The Hungarian Tax and Customs Administration’s clarifications help businesses better understand how to navigate these new rules.

Under the reverse charge system, instead of the gas supplier collecting and paying VAT to the Hungarian tax authorities, the buyer will be responsible for calculating and remitting VAT on the transaction.

This mechanism is designed to simplify VAT compliance, reduce tax fraud risks, and improve administrative efficiency in the energy sector.

Both supplier and buyer must be registered taxpayers in Hungary, with no VAT exemptions.

The Hungarian Tax and Customs Administration has emphasized that businesses should share their VAT registration information with each other before engaging in any transactions. This step is crucial to avoid issues and ensure the reverse charge mechanism applies correctly.

For natural gas sourced from a network within the European Union (EU) or a connected network, the place of supply is considered to be the Hungarian establishment of the buyer.

This means that the Hungarian buyer is responsible for VAT compliance under the reverse charge system, as long as their establishment meets the requirements for VAT liability within Hungary.

The Hungarian Tax and Customs Administration has outlined the reporting obligations for both suppliers and buyers when submitting their VAT returns.

The following data must be reported:

• Tax Number of both the purchaser and the seller of the product.
• Date of Supply of the goods.
• Tax Base of the sold/purchased product in Hungarian Forints (HUF).
• Quantity of gas sold or purchased in cubic meters.

It is crucial to carefully consider the tax point for transactions.

The reverse charge mechanism applies strictly after December 31, 2024.

Therefore, if the buyer has access to gas and the invoice is issued in 2024, the supplier remains responsible for paying VAT.

This includes advance payments made for gas supply before 1 January 2025, which are also subject to VAT being paid by the supplier.

In cases where the gas supplier is not established in Hungary, but the buyer is a registered Hungarian taxpayer, the cross-border reverse charge system will apply.

Under these circumstances, the Hungarian buyer will be responsible for reporting and paying VAT on the transaction, even though the supplier is located outside Hungary.

Latvia

Through Council Implementing Decision (EU) 2024/3207 of 12 December 2024, published in the Official Journal of the EU on 23 December 2024 and Latvia was granted a further two-year extension, until 31 December 2026, to apply a special VAT treatment measure.

This allows Latvia to continue designating the recipient of timber or related services as the person liable to pay VAT.

Lithuania

As of 1 November 2024, the Lithuanian State Tax Inspectorate has introduced a new system for automatically comparing the submitted VAT return form (FR0600) with the Sales ledgers in the Electronic Invoicing Subsystem (i.SAF).

They have published an official FAQ addressing the most practical topics.

Does this affect the filing deadlines?

No, this automatic cross-check system does not change the deadlines for submission, VAT payment, or refunds.

All forms and payments must still be processed on the same schedule:

• i.SAF ledgers are due by the 20th calendar day
• VAT return is due by the 25th calendar day after the end of the tax period

The system simply facilitates follow-ups on discrepancies through VAT and i.SAF revisions or explanations to the Tax Inspectorate.

Discrepancies can still be submitted with the message “Document accepted with identified deficiencies,” ensuring compliance with regular filing deadlines.

The New Cross-check System

This system is designed to streamline data reporting for each taxpayer, including foreign registrations, which are also required to submit Sales and Purchase ledgers in i.SAF.

Within two days of submitting data, the portal will inform taxpayers of any discrepancies between their i.SAF ledgers and VAT return, sending notifications through the Electronic Declaration System (EDS). Taxpayers will have 10 working days to correct or explain the discrepancies.

If these discrepancies are not addressed, the taxpayer will be subject to additional monitoring by the Tax Inspectorate.

Gradual Implementation: Sales Ledgers Only

Currently, the system only cross-checks Sales invoices and credit notes issued with VAT, and the VAT return boxes 29, 30, and 31.

Rounding in the boxes will not be considered a discrepancy.

Taxpayers participating in special schemes, such as margin taxation, are likely to encounter discrepancies, which must be explained through the State Tax Inspectorate’s online portal for form submission.

Poland

On 2 December 2024, the Polish Customs Department and Ministry of Finance published the updated thresholds for entities involved in trade with European Union countries.

These thresholds determine the obligation of businesses to submit Intrastat statistical declarations through the Tax and Customs Electronic Services Portal.

Thresholds for Simplified Reporting of Intrastat:

• Dispatches: PLN 2,800,000 (unchanged from 2024)
• Arrivals: PLN 6,000,000 (decreased from PLN 6,200,000 in 2024)

Thresholds for Detailed Reporting of Intrastat:

• Dispatches: PLN 158,000,000 (increased from PLN 150,000,000 in 2024)
• Arrivals: PLN 105,000,000 (increased from PLN 103,000,000 in 2024)

These adjustments reflect ongoing changes in trade patterns and customs requirements, and businesses that exceed the specified thresholds will need to comply with the appropriate level of reporting obligations.

Portugal

On 27 November 2024, Portugal announced updates to the Combined Nomenclature (CN) codes for 2025, which will have significant implications for the wine sector.

Starting in 2025, the current 8- and 9-digit CN codes will be expanded to 10 digits.

This change is particularly important for businesses involved in Intrastat reporting, as the new 10-digit CN codes will now be required when completing Intrastat declarations.

The update will be implemented with an effective deadline of January 2025, and businesses involved in the wine sector and other affected industries will need to adopt the new 10-digit CN codes for their declarations starting from this date.

Slovakia

On 2 December 2024, the Financial Administration department finalized the data file specifications for the Control List, which will be used for reporting periods starting 1 January 2025.

The updated version of the Control List form incorporates VAT-related measures introduced in the Slovakian Consolidation Package, including an increase in the standard VAT rate and modifications to the reduced VAT rates. These changes were mentioned in a previous newsletter.

Sweden

Effective January 2025, the scope of the simplified invoicing rules will be extended to taxpayers with a small annual turnover who are exempt from tax liability. These taxpayers will need to include the reason for their exemption on their simplified invoices, in addition to the other required information.

Also, in early December, the Swedish Tax Agency (Skatteverket) published Regulation SKVFS 2024:16, specifying the business sectors that are allowed to issue simplified invoices under Chapter 17, Section 26 § 2 of the VAT Act.

These sectors include:

• Sales made through a payment machine (e.g., motor fuel)
• The provision of tolls for road, bridge, or tunnel traffic
• The provision of parking spaces
• The retail sale of public passenger transport tickets

Bosnia and Herzegovina

On 10 December 2024, the Indirect Taxation Authority published public consultations on the draft Rulebook on Amendments to the VAT Ordinance, which includes changes to the VAT refund procedure for foreigners.

Among the main changes are:

• The minimum amount for VAT refund claims by non-residents will increase from BAM 100 to BAM 200. This is also the minimum amount per transaction/invoice.
• Changes to the deadlines (DLs) for VAT refund claims:
  • For diplomatic and international organizations: 12 months from the date of invoice issuance.
  • For individuals procuring goods and services as part of international projects: no later than 24 months from the date of invoice issuance.

Serbia

On November 28 2024, the Serbian Parliament published changes to the VAT Law in Official Gazette No. 94/2024, with effect from January 2025.

Among the amended articles are:

• Article 28: Conditions for the deduction of input tax

• Article 38: Recording and deletion from the register of VAT payers

In Article 28, the changes concern e-invoices:

• The right to deduct input VAT based on an e-invoice will now be exercised in the tax period in which the e-invoice was approved, regardless of the date the e-invoice was issued.

In Article 38, the changes pertain to the deadline for registering as a VAT payer:

• Previously: Registration was required no later than the deadline for submitting the first VAT return.
• From January 2025: Registration must occur within five days from the day the taxpayer achieves a turnover of 8 million dinars over the last 12 months.

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