Below you can find a brief summary of the two most important changes regarding VAT since 1 January 2016, which were approved with slightly modified wording in comparison with the bill:
An increase in the turnover limit for VAT settlement after a payment has been received
As we informed you in Newsletter 2/2015, with effect from 1 January 2016, a special regulation of VAT application based on the receipt of a payment for the supply of goods or services (so-called “cash accounting”) will be introduced. This regulation was approved in its proposed wording; however, within the framework of the representatives’ modifying proposals, the amount of the maximum annual turnover was increased from the originally proposed EUR 75,000 to EUR 100,000. The increase will allow for the use of this special VAT mode by more payers.
VAT rate reduction for select types of basic foodstuffs
The amendment to the VAT Act extends the range of goods to which a reduced VAT rate of 10% will be applied. At present, for example, a reduced VAT rate is applied to medicines, books, and medical aids. With effect from 1 January 2016, the VAT rate amounting to 10% will also be applied to so-called “basic foodstuffs” such as meat, milk, and bread.