Newsletter September 2017

1. REGULATION NO 23 OF 30/08/2017 CONCERNING THE SEPARATE PAYMENT OF NET PRICE AND TAX ON SALES (SPLIT-PAYMENT-PROCEDURE)

  • Businesses and natural persons liable to VAT are obliged to make a separate payment of net price and VAT as of 1 January 2018. The procedure provides for the opening of a separate VAT account, which is different from the current account to which customers pay VAT and from which input tax is paid to suppliers/service providers or VAT liabilities are paid to the tax authorities.
  • This means that an invoice issued by a person liable to VAT is paid in two ways:
    – a payment in the amount of the net amount of the deliveries or services to the general bank account of the supplier;
    – a payment in the amount of the value added tax for the above-mentioned deliveries or services to the value added tax account.
  • All taxable persons and public institutions are obliged to pay VAT on the supplier’s or service provider’s VAT account, regardless of whether or not they are subject to VAT. There is an exception for natural persons who are not liable to VAT and are not obliged to register as VAT payers.
  • Only cash payments and payments by bank card or cash replacements are excluded from the separate VAT payment, irrespective of the payer’s status. For these transactions, the payees have 7 days to deposit the VAT withheld on their own VAT account.
  • The amounts accumulated on the VAT account are only used for the payment of VAT liabilities to the tax authorities or for VAT payments on the VAT accounts of the suppliers/service providers. Other transfers from the VAT account to another own account or to another third party account can only be made after prior approval by the tax authorities. The approval of the tax office would have to be given within a period of three days after the submission of the application.
  • Sales tax accounts can be opened at the State Treasury or at banks. The VAT accounts opened at the State Treasury are kept free of charge.
  • The procedure can be used as a voluntary option from October 1,2017. Taxpayers who opt for the application from 1 October benefit from the following benefits:
    – Cancellation of the default and delay surcharges for value added tax fixed until 30 September, subject to certain conditions;
    – Cancellation of the VAT surcharges for late payments and delays.
  • Reduction of 5% of the profit tax and/or micro-entrepreneur’s tax fixed for the fourth quarter of 2017.

2. REGULATION NO. 25 OF 30/08/2017 (AMENDMENT AND SUPPLEMENTATION OF THE TAX CODE)

  • As of 1 January 2018, the deductibility of expenses for assigned receivables will be limited to 30% of the value of the receivables.
  • From 3 September 2017, the employer’s paid medical service subscriptions for its own employees are no longer subject to social security contributions up to a value of €400 per year. Until now, these services have only been exempt from wage tax. Medical service subscriptions are defined as prepaid medical services that are offered directly to subscribers and not through insurance and are not included in the statutory health insurance coverage.