As of 1.1.2026, the new reduced VAT rate will be 13.5%. The new VAT will be applied to all goods and services for which the current VAT rate is 14%. The change in the VAT rate will especially impact sales invoicing and there are a few things to consider when choosing the right VAT rate. The regulations are different when selling goods or services already produced and when invoicing in advance.
Easor App has been updated with a new value added tax rate (VAT rate) of 13.5%. In this guide, we explain how to create sales invoices with the new VAT rate and what should be taken into account in invoicing. In addition, we will tell you about receiving purchase invoices with the new VAT rate and what you should pay attention to when processing purchase invoices.
General principle in VAT #
At the time of the VAT rate change, the general principle of VAT is applied. The supply of goods and services is subject to the accrual principle, i.e. the moment when the goods or services are supplied to the purchaser. Services and goods supplied before 1 January 2026 will be invoiced with 14% VAT, while services and goods supplied after 1 January will be invoiced with 13.5% VAT.
Examples:
- Company sells the goods on 25.12.2025 and sends the invoice on 1.1.2026. The company applies a VAT rate of 14% to the sale, because the goods were delivered to the buyer before 1.1.2026.
- Company has provided a service to its customer in December 2025 and will invoice this on 2.1.2026. The company applies a VAT rate of 14% to the sales, because the service was provided before the VAT rate change on 1.1.2026.
- Company has received the order for goods on 28.12.2025 and delivers the goods on 10.1.2026. The company must apply the new VAT rate of 13.5%, because the goods have been delivered after the VAT change on 1.1.2026.
- On 31.12.2025, the company sends goods to its customer. The customer receives the goods in their own warehouse on 2.1.2026. Depending on the terms of the contract on whether the vendor or the customer is responsible for the transport, the VAT rate applicable to the sale is determined. If the transport is the vendor’s responsibility and the receival of the goods took place on 2.1.2026, the applicable VAT rate is 13.5%. If the transport is the responsibility of the customer, the moment of delivery of the goods is 31.12.2025 when the goods were shipped, and the applicable VAT rate is 14%.
Advance payments and invoicing #
In the case of advance payments, cash principle is applied in VAT. This means that the applicable VAT rate is determined by the actual time of payment and not by the accrual principle.
Example: In November, the company invoices in advance for goods that are due to be delivered in January. The due date of the advance invoice is 15.11.2025 and the customer pays the invoice on the due date. The VAT rate applicable to the advance payment is 14% because the payment was received before 1.1.2026. If the customer paid the invoice only on 1.1.2026, the applicable VAT rate would be 13.5%. The company should issue a credit note for the invoice issued in November and issue a new sales invoice with the new increased VAT rate.
Discounts and credit notes #
The company may receive or give annual, seasonal or other discounts. The VAT rate applicable to discounts and credit notes issued is the VAT rate in force when the goods or services were supplied. Any credit losses incurred shall be reduced by value added tax at the rate applied to the original sale.
Recurring supply of services or sale of goods #
An example of a recurring service is a rental service, where VAT is based on the passage of time. Such goods or service is considered to be supplied when the accounting period for it ends.
Example: If the rental period is from 1 March 2026 to 28 February 2026, the service is deemed to be supplied on 28 February 2026, in which case the service is subject to a VAT rate of 13.5% for the whole period. If the tenant pays the rent for the whole period in advance by 31.12.2025 at the latest, the VAT rate applicable to the sale is 14%. If the rent is charged monthly, the accounting period is one month and the VAT rate is always determined by the end of the accounting period. In this case, a VAT rate of 14% will apply to the rent until December 2025 and 13.5% to the rent from January 2026 onwards.
