Changes proposed to VAT rates as of 2025
The Government proposes changes to the application of VAT rates as of 1 January 2025. According to the proposal, goods and services currently subject to reduced VAT of 10% would in future be subject to reduced VAT of 14%.
However, the change would not concern newspapers and magazines or public broadcasting – they would remain subject to reduced VAT of 10%.
This page contains instructions to be followed if the Government proposal is adopted.
The goods and services that would be subject to 14% VAT as of 2025 include the following:
- books (printed and electronic)
- pharmaceuticals
- sports and fitness services, such as gym, golf and ice rink bookings, and sale of ski lift tickets
- entrance fees to cultural, entertainment and sporting events, such as theatre, circus, cinema, exhibitions, amusement parks, zoos and museums
- passenger transport services (buses and coaches, trains, taxis, domestic flights)
- accommodation services (hotels, motels, hostels, farm stays, camping sites for tents, camper vans or trailers, and cottage rental).
Sanitary protection products and children's diapers, currently subject to 25.5% VAT, would be subject to reduced VAT of 14% in future.
Another change currently prepared concerns candy and chocolate, whose VAT rate would rise from 14% to 25.5%. The change is scheduled to enter into force on 1 June 2025.
VAT rate depends on the date of delivery
When goods are sold, the VAT rate applied depends on the date of delivery. The goods are regarded as delivered when they have been transferred to the buyer’s possession. If it has been agreed that the seller is responsible for the transport, then the goods are regarded as delivered when the buyer has received them. If the buyer is responsible for the transport, then the goods are regarded as delivered when the transport begins.
If goods subject to 10% VAT are delivered to the buyer no later than on 31 December 2024, then the VAT rate is 10% even if the buyer pays for the goods in 2025. If the goods are delivered on 1 January 2025 or later, the VAT rate is 14%.
If the seller has received an advance payment for the goods, the VAT rate applied is the rate that is in force when the payment is made.
VAT rate depends on the date of service provision
The VAT rate depends on the date when a service is provided. If the service is not yet completed when the VAT rate changes, the VAT rate applied is the rate that is in force when the service is completed. The service is considered completed when it is available to the buyer.
If a service subject to 10% VAT is completed no later than on 31 December 2024, the VAT rate applied is 10% even if the buyer pays for the service in 2025. If the service is completed on 1 January 2025 or later, the VAT rate applied is 14%.
If the seller has received an advance payment for the service, the VAT rate applied is the rate that is in force when the payment is made.
Continuous supply of goods and services
When goods are supplied or services provided on a continuous basis, the consideration paid for them depends on the time that passes. Goods supplied or services provided on a continuous basis are regarded as having been delivered or provided at the end of each remittance period.
Example: You buy a 1-year season ticket for commuting, and you will be charged for the ticket at 30-day intervals. You subscribe to the ticket and make the first payment in December 2024. After this, you will be charged once a month. The first payment is subject to 10% VAT. The following payments are subject to 14% VAT.
One-off supply of goods or services that are paid for in multiple instalments, such as hire purchase, are not continuous.
What is regarded as an advance payment?
An advance payment means that the seller has received the payment before the goods are delivered or service provided to the customer. The deciding factor is when the money is available to the seller. If the seller receives the advance payment before the amendment enters into force, then the VAT rate applied is the current VAT of 10%. If the seller receives the advance payment after the amendment has entered into force, then the VAT rate applied is 14%.
Example: In November 2024, you buy a train ticket for a trip that takes place in January 2025. Because you pay for the ticket before you use it, i.e. before the actual train trip, the payment is an advance payment. The advance payment is subject to the current VAT rate of 10%. If you pay for the ticket before you use it but not until 2025, the VAT rate is 14%.
Example: On 30 December 2024, you buy a 4-month season ticket for commuting. The season ticket is subject to 10% VAT.
Example: In December 2024, you buy a set of 6 movie vouchers. The vouchers are not for specific movies or screenings. You exchange a voucher for a movie ticket in 2025. The sale of the set of vouchers is subject to 10% VAT.
Example: You have a continuous membership in a gym and the membership fee can be paid either once a month or several months at a time. As of January 2025, the membership fee is subject to 14% VAT. If you pay the membership fees for January–March 2025 in advance in December 2024, the payment is an advance payment and subject to 10% VAT.