Postponement of information obligation regarding VAT deduction for mixed and partial taxpayers

Information obligation from 2024

Starting from 2024, there is an information obligation regarding VAT deduction for mixed and partial taxpayers. This applies to taxpayers using the general pro rata or actual use.

Mixed taxpayers applying the general pro rata

For mixed taxpayers applying the general pro rata, this ratio determines the right to deduct VAT. The ratio is the ratio between the turnover from deductible transactions and the total amount of all transactions of the economic activity. The ratio determines the proportion of VAT that may be deducted.

From January 1, 2024, mixed taxpayers deducting VAT based on the general pro rata must communicate the provisional and final ratio annually with the periodic VAT return.

Mixed and partial taxpayers applying actual use

In addition to the general pro rata, the actual use rule can also be applied to determine the right to deduct VAT. In determining actual use, and therefore the right to deduct, VAT is charged on goods and services that are:

• used exclusively for taxable transactions;

• used exclusively for exempt transactions;

• used for both taxable and exempt transactions.

From 1 January 2024, mixed and partial taxpayers applying the actual use method will have to report certain information annually with the periodic VAT return.

Tolerances in 2024

General extension until August 9

Initially, affected VAT taxpayers were required to communicate the requested information by 20 April 2024 at the latest (or 20 June 2024 for mixed taxpayers who were already applying actual use on 31 December 2022).

Those deadlines are pushed back to the latest filing date of the periodic VAT return for:

• the second quarter of 2024 (no later than 20 July 2024) or

• June 2024 (no later than 20 July 2024).

Due to the extension provided during the summer holidays, the deadline is further extended until August 9, 2024.

Specific extension for actual use

Taxpayers using the actual use method must also provide certain additional information to the VAT administration by adding it to the periodic VAT return:

• the breakdown, in percentages, of the charged VAT on the transactions:

  • used exclusively for taxable transactions;

  • used exclusively for exempt transactions;

  • used for both taxable and exempt transactions.

• the specific ratio(s)

Since this requires allocation of each purchase invoice with VAT to one of those sectors, the VAT taxpayer may include this data based on estimates in that first return (= by August 9, 2024 at the latest). They must communicate the final figures no later than with the periodic VAT return for:

• the third quarter of 2024 (by October 21, 2024), or

• November 2024 (by December 20, 2024).

Do you have any questions about this new tolerance? Then contact one of our experts using the form below.