Circular 2025/C/6 on the modernisation of the VAT chain

1. Modernisation of VAT Procedures:
   • The law of 12.03.2023 introduces significant changes to the VAT Code and its implementing decrees, aiming to modernize the VAT chain. This includes new deadlines for submitting periodic VAT returns, correcting material errors, and an automated procedure for unfiled returns, leading to a substitute return if necessary.
2. Introduction of the VAT Provision Account:
   • The VAT current account and special account are abolished, replaced by the VAT Provision Account. This new account will manage VAT credits not immediately refunded and payments made by taxpayers. The VAT Provision Account will automatically allocate amounts to settle VAT debts.
3. Enhanced Refund Procedures:
   • The refund process for VAT surpluses has been reformed. Surpluses will be registered in the VAT Provision Account unless a refund is expressly requested and conditions are met. Monthly refunds are now generalized for taxpayers submitting monthly returns, eliminating the need for special permits.
4. New Penalty and Compliance Measures:
   • The law introduces new proportional and non-proportional fines for late submission or non-submission of periodic VAT returns and late payment of taxes. The replacement declaration procedure imposes penalties if taxpayers fail to submit required returns within specified deadlines.
5. Gradual Implementation and Transitional Provisions:
   • The new regulations will be implemented gradually, with a transition period until 01.10.2025. During this period, administrative tolerances will apply to ensure a smooth transition. The law and its implementing decrees officially come into force on 01.01.2025, with specific provisions effective from 01.02.2025.

Source Fisconet