New VAT Rule: Adjusting Deductions for Unpaid Invoices After Six Months

• New VAT rule effective from 1 January 2025 for unpaid taxable supplies
• VAT deduction must be adjusted if payment is not made within six months after the invoice due date
• Applies to supplies made on or after 1 January 2025
• Example: Invoice due on 15 January 2025 must be paid by 31 July 2025 to avoid adjustment
• Affects VAT payers in the Czech Republic who claimed VAT deduction but did not pay
• Deduction can be reclaimed if payment is made later, within the general deadline
• Rule does not apply to reverse-charge mechanism recipients
• Keep detailed records of liabilities by due date
• Special attention needed for partial payments, set-offs, retention payments, and instalments
• Adjustments must be proportional for invoices with different VAT rates

Source: crowe.com

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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