Tax Alert – Changes to VAT Act Implementing Regulations 2016 (EN)




Certain amendments to the Value Added Tax Act Implementing Regulations (the “VAT Act Implementing Regulations”), which enter into force on 29.01.2016, were promulgated in State Gazette No. 8/29.01.2016.

The main changes concern the update in the VAT sales ledgers and VAT return forms with regard to charging VAT on the private use of business assets, the adoption of new requirements to certain documents for different types of taxable supplies and the precision of various provisions in compliance with the VAT Act amendments or the case-law.


Following the VAT Act amendments concerning the charging of VAT on any private use of business assets by the taxable persons or their staff, the VAT Act Implementing Regulations have been also accordingly amended, as follows:

  • Calculation of the Wear and Tear Expense for Goods Used in the Supply of Services for Private Use before 31.12.2015

When services are supplied for private use after 31.12.2015, the calculation of the direct expenses for the goods used for supplies for private use before 31.12.2015 must take account of a wear and tear expense, which shall be determined as a part of the difference between the taxable base on which VAT has been deducted and wear and tear which has already been included in the direct costs when forming the taxable base of the services for private use supplied before 31.12.2015. The proportional part of that difference is calculated monthly using the linear method for the remainder of years until the end of the 5-year (or respectively the 20-year for immovable property) period as of the period when VAT was deducted.

  • Improvements with VAT Deduction 

It has been specified that the taxable persons are liable to self-charge VAT on the use and application of goods for private use even in case no VAT was deducted for the goods themselves provided that a VAT deduction has been enjoyed with regard to any improvements on the goods. In this case the taxable base shall be calculated only based on the taxable base of the improvements on which VAT has been deducted.

  • Changes to the Sales Ledgers and VAT Return Forms  

The title of column 16 of the VAT sales ledger has been changed from “VAT accrued in other cases under the VAT Act” to “VAT accrued on supplies of goods and services for private use”. Respectively, the VAT which the taxable persons accrue on such supplies for private use must be reported in that column.

In addition, cell 23 in the VAT return form would be henceforth titled “VAT accrued on supplies of goods and services for private use”. Apart from that, the names of other cells of the VAT return have been also changed and précised and certain explanatory notes have been added to them in order to clarify what types of supplies must be reported in the respective cells.

The updated sales ledgers and VAT return forms shall apply as of February 2016, while the current forms shall be last used in January 2016.