VAT in practice

Another step towards the ViDA system

An amendment to the VAT Act is currently going through the legislative process; it is intended to implement the first part of the European ‘VAT in the Digital Age' (ViDA) package from 1 January 2027.
One of the main changes is to be an amendment to the One Stop Shop (OSS) scheme, which allows VAT on selected cross-border transactions to be paid via a single Member State. Its scope is to be extended, for example, to certain cross-border supplies of electricity, gas, heating and cooling.
The amendment also extends the liability of electronic platforms for VAT payment under the ‘deemed supplier' scheme and harmonises the time of supply for selected services reported via the OSS.
Also worthy of attention are the planned changes to the call-off stock scheme, which are proposed to come into effect on 1 July 2028. However, the current rules may continue to be applied on a transitional basis until 30 June 2029 for goods whose transport to the destination Member State is completed by 30 June 2028 at the latest. Companies that use cross-border warehousing models should therefore review their supply chain and logistics processes in advance, particularly any registration requirements in individual countries. The draft amendment is now proceeding through the legislative process.

Planning agreements may be subject to VAT

The General Financial Directorate has recently confirmed that the fact that a planning agreement under the Building Act is governed by public law does not, in itself, mean that the services provided under it are exempt from VAT. If a municipality, city district or region receives payment from a developer in return for its obligations, the decisive factor is whether this payment constitutes direct consideration for a specific service provided. If so, this may constitute an economic activity subject to VAT.
The practical implications are particularly significant for the drafting of new planning agreements and the assessment of existing ones. It is advisable to clearly define the individual obligations of the municipality or region, their link to the agreed consideration, and the method of invoicing. The General Financial Directorate's conclusions apply from 17 June 2026; therefore, local authorities and developers should check whether the current terms of their contracts and their tax treatment comply with the current interpretation.

New interpretation of VAT on the donation of goods

With effect from 1 July 2026, the General Financial Directorate has updated its approach to VAT on the supply of goods free of charge.
For certain goods, such as food, clothing or older collections, the taxable amount may, under certain conditions, be their very low value. However, to apply this scheme, it is important to be able to demonstrate why the goods no longer have a normal market value and to whom, when and to what extent they were donated. Companies should therefore pay attention to keeping records of donations and retain supporting documents proving, for example, the age, condition, "unsaleability", or commercial reasons for disposing of the goods.
Documentation will be particularly important for companies. We therefore recommend keeping records demonstrating the condition, age and unsaleability of the goods, the reasons for their disposal, and information on to whom, when, and to what extent they were donated.

VAT and grants

The Financial Administration has confirmed that the mere fact that a project is funded by a grant does not automatically give rise to the right to deduct VAT; in other words, the source of funding is not the determining factor for the right to deduct. What is decisive is the purpose for which the supplies received are actually used. If they are used exclusively for non-remunerated activities unrelated to economic activity, a right to deduct will not generally arise. Conversely, a deduction may be applicable if the company demonstrates that the results of the project are used for its taxable activities - for example, in the development of a product or technology, or the subsequent provision of paid services. The key factor will always be the ability to substantiate this link with specific supporting documents.