Unpaid invoices and VAT: What changes from January 2025?

An amendment to the VAT Act came into force on 1 January 2025. It affects taxpayers who have claimed VAT deductions on invoices that have remained unpaid for more than 6 months. Although the amendment has been in force since the beginning of the year, the concrete practical effects will not be visible until July 2025 due to the deadlines.

How does the VAT deduction rule change?

If you are a VAT payer and you have claimed a VAT deduction on an invoice you have received but have not paid for more than 6 months, you must now repay the deduction. The period is calculated in full calendar months and starts after the month the invoice is due. This is one of the important things that the amendment to the VAT Act has brought, among others.

There are a few exceptions:

• It only applies to invoices with a taxable supply date (DSTD) after 1 January 2025.
• Older obligations before 1 January 2025 are not addressed.
• It does not apply to reverse charge invoices.

What if you only pay part of the invoice?

If you only pay part of an invoice, you will have to repay the proportion of VAT corresponding to the unpaid amount.

• When it is not clear which specific items on an invoice have not been paid, you reduce the VAT deduction in proportion to the total outstanding amount (even if the VAT rates on one invoice are different).

Example: there are 2 VAT rates on an unpaid invoice; the unpaid amount is not related to a specific item with a given VAT rate and the receivable as a whole remains unpaid to the extent of e.g. 20%. Then you must apply the same ratio for the purpose of reducing the tax deduction according to Section 74b(3) of the VAT Act as follows: you will reduce the tax deduction by 20% of the VAT deduction at the reduced rate and 20% of the VAT deduction at the standard rate.

• If an invoice has multiple due dates, such as for advances, instalments, retention payments, etc., each part of the invoice must be treated separately according to its due date.

What if you pay the invoice late?

The VAT Act says that you can reclaim VAT when you have partially or fully paid the invoice. However, you need to do this within 2 years of when you became entitled.

The correction is made by means of an internal document, which you must have:

• the same VAT date as on the original invoice;
• the same number as the document you originally used to recover the VAT.

What will the change look like in practice?

The first corrections to VAT deductions will appear - due to the 6-month deadline - in the July 2025 tax return, which is filed in August 2025.

Where to write corrections in the return or control statement?

• Tax return - according to § 74b of the VAT Act , lines 40/41 and 34.
• Control report - section B.2, column 12, here you enter the document designation "P".

Get advice on VAT from a certified tax advisor

Do you want or need to register for VAT? Or are you already a taxable person and need advice on VAT? We can help, just use our full tax service.

We will facilitate everything from VAT registration to the actual processing of returns or control and summary statements. Contact us using the form below and we'll take a look at your situation together.

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