With her decision from 20 October 2021, the current finance minister waives the duty to return and pay VAT:

• on supply of electricity or gas and on accepted payment before supply of electricity or gas;
• in case of supply of electricity or gas by a non-resident entity to the payer or an identified person under article 24 of the VAT Act and
• in case of buying gas from another member state or in case of gas import,

under the assumption that the taxable transaction will take place or the payment, from which duty to return tax arises, will be accepted in the period from 1 November to 31 December 2021.

The given decision has been published in the Financial Newsletter of the Finance Ministry no. 34/2021.

In this context, we would like to point out some practical problems on the part of suppliers, who should change the form of invoicing for electricity and gas supplies for this period, especially to update payment and instalment calendars, for example, or set up calculation of prepayments for the future final billing. To the clients, we recommend checking the received invoices for gas electricity in the given period, due to the fact that any potential applied VAT, if the supplier issued an invoice including the tax, may be challenged by the tax administrator.

With regard to the fact that the given decision is in conflict with the EU VAT rules, the Finance Ministry has asked the European Commission for understanding and non-application of sanctions arising from failure to comply with EU regulations, as well as for an accelerated preparation of a legislative proposal that would enable exemption from VAT. Although the ministry officially expects the request to be granted, as well as the option of continuing with the exemption from 1 January 2022, we would like to point out that this may be problematic and the solution from January 2022 cannot be predicted. At the same time, we, too, are aware that this change will bring a number of practical problems on the one side, which the already issued Information of the General Financial Directorate partly outlines, while on the other hand it will also bring a number of opportunities. If you have any questions regarding the above, please, do not hesitate to contact us, of course.