Changes in VAT for Investment Assets Starting January 2025: Key Updates and Implications

• Important changes in VAT rules for long-term assets start from January 1, 2025
• Affects VAT deducted on purchase or creation of long-term assets like buildings, machines, furniture, or cars
• Requires monitoring and adjusting VAT if asset usage changes, such as from business to private use
• Previous rules until end of 2024 defined investment assets as movable items over 3,319.39 EUR and real estate regardless of price
• Monitoring period was 5 years for movable items and 20 years for real estate, starting from purchase date
• VAT adjustment was based on prediction, affecting cash flow significantly
• Adjustments were made in the last tax return of the year when the change occurred
• New terms introduced from 2025 include long-term assets and initial use
• Investment assets now include movable items over 1,700 EUR, real estate, and intangible assets over 2,400 EUR
• Monitoring period remains 5 or 20 years but starts from initial use, not purchase
• VAT adjustment now only for the specific year of change, not the entire remaining period
• Adjustments still made in the last tax return of the year when the change occurred
• Transitional rule applies old calculation rules to assets purchased or used before December 31, 2024
• New rules apply to assets purchased or first used from 2025 onward

Source: emineopartners.sk

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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