Whether you are already a VAT payer or are just planning to become one, it is important to understand the obligations that come with this “status.”

Registration Requirement

If your turnover exceeds €49,790 for 12 consecutive months, you are required to register as a VAT payer under Section 4(1) of the VAT Act within 20 days after the end of the month in which you reached that turnover. If, 12 months after registration, your turnover does not exceed €100,000, you may apply to the tax office to change your status to a quarterly VAT payer pursuant to Section 77 of the VAT Act. Please note that the turnover is not reset to zero at the beginning of the year; instead, it is calculated monthly based on the last 12 months. You may apply for registration under Section 4(2) of the Act. This is known as voluntary registration.

Sale and Construction of Single-Family Homes and Apartments

If you are building a house or apartment and plan to sell it, and the proceeds exceed €49,790, you are required to file a report under Section 4(4) within 10 days of receiving even a partial payment or upon delivery of the building (whichever occurs first). You become a VAT payer upon receipt of payment or delivery, and the sale price must be increased by the amount of VAT. In the case of building a house, it is therefore more advantageous to become a VAT payer as soon as possible. You will be able to deduct VAT on purchases right from the start of construction. If you were to apply for registration only before the sale, you would still be able to claim the VAT, but in the case of building a house for €100,000, you would have €20,000 in VAT liabilities throughout the entire construction period.

Filing of Reports (DP, KV, and SV)

Once you have obtained your VAT registration certificate, you are required to file a monthly or quarterly VAT return and a control statement. The VAT return totals the input VAT and output VAT and determines whether you will owe VAT for that month or receive a VAT refund (excess VAT deduction). In the control statement, you submit to the tax authority data from all received and issued invoices, as well as summary data for all cash receipts or revenue from an electronic cash register. If you sell goods or services to the EU, you are also required to file a summary report. In this report, you submit data from invoices issued by EU partners to the pan-European VIES system.

VAT Payment

Based on the VAT return you file, if you have a tax liability, you must pay the tax no later than the last day of the filing deadline for the VAT return. If you have an excess deduction (input VAT exceeds output VAT), you do not have to pay any tax. The tax office then waits to see what you file the following month. If the tax due the following month is higher than the excess credit from the previous month, you pay only the difference, and the remainder is automatically offset against the excess credit from the previous month. If the tax due is less than the excess credit from the previous month, or if there is another excess credit, the tax office will transfer the amount of the excess VAT credit from the previous month to the taxpayer’s account within 30 business days from the date the VAT return is filed.

Special VAT payer (Section 7, Section 7a)

If you purchase services within the EU (most commonly Google and Facebook ads), you must register as a VAT payer under Section 7 or Section 7a. Once your certificate is issued, you will purchase services without VAT, but you must file a VAT return and pay the VAT each month. Please note that for services, registration is mandatory before the service is provided (e.g., Facebook ads, Google Ads, etc.). This type of registration negatively affects the provision of services from countries outside the EU; if you are registered under Section 7 or Section 7a, you must also pay VAT on these services, which makes them more expensive for you. Mandatory registration also applies to purchases of goods exceeding €14,000.