The draft Act on the Registration of Sales also introduces amendments to the VAT Act. One of them is a significant shortening of the time limit for adjusting VAT deductions in respect of unpaid liabilities. According to the current wording of the draft legislation, the change is expected to take effect on 1 January 2027.

If a VAT payer fails to pay for a received taxable supply for which they have claimed a VAT deduction, they will be required to reduce the deduction after the end of the third calendar month following the month in which the liability became due. Under the current rules, this obligation arises only after six calendar months have elapsed.

Example – current rules: An invoice is due on 29 January 2026 and remains unpaid. The sixth calendar month following January ends on 31 July 2026. Under the current rules, the VAT payer should therefore reduce the VAT deduction claimed in the VAT return for July 2026.

Example – proposed rules: For an invoice due on 29 January 2027, the third calendar month following January ends on 30 April 2027. If the invoice remains unpaid, the VAT payer will be required to reduce the VAT deduction claimed in the VAT return for April 2027.

The proposed amendment will therefore significantly shorten the period during which a VAT payer may retain a VAT deduction claimed in respect of unpaid liabilities.

The legislative process has not yet been completed. On 19 August 2026, the Senate returned the draft legislation to the Chamber of Deputies with proposed amendments. The final wording of the legislation may therefore still change.

Our tax specialists will be happy to help you assess the impact of the proposed changes and set up the appropriate procedures for recording and correctly treating unpaid liabilities for tax purposes.

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