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Updates:

Innovations in the 2021 preliminary VAT return form

08 February 2021

Annette Pogodda-Grünwald , Partner
Head of VAT, Head of Industry Sector Group Real Estate
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The BMF letter of December 22, 2020 has introduced some significant changes in the form for the preliminary VAT return and advance payment procedure for the calendar year 2021.

Services provided in the field of telecommunications

Effective January 1, 2021, the scope of application of the recipient's liability for VAT has been expanded to include other services in the field of telecommunications.

As of January 1, 2021, such transactions have to be reported separately on the preliminary VAT return form by the supplier on line 49 (box 60) and by the recipient of the service along with the tax on line 42 (boxes 84 and 85).

Reduction of the assessment base

If the assessment base for a taxable turnover has changed, the entrepreneur must correct the amount of tax due. The changes shall be entered in the assessment bases of the respective turnover. As of January 1, 2021, in contrary to the previous preliminary VAT return form, cases of change of the tax base due to uncollectibility of the charges agreed upon shall be taken into account separately in the preliminary VAT return and advance payment procedure.

Thus, the reduction in the tax base must be additionally entered on line 73 (box 50) in the form 2021 if the change is due to uncollectibility (for example: due to insolvency of the debtor, statute of limitations, etc.) of the agreed charge for a taxable turnover.

If the assessment base for the deduction of input VAT has changed for the entrepreneur to whom this turnover was performed, the deduction of input VAT has to be adjusted. If the change in the assessment basis for the input VAT deduction occurs because the agreed charges for a taxable transaction have become irrecoverable, the reduction in the deductible input VAT amounts must also be entered in line 74 (box 37) of the preliminary VAT return form. All other cases of reduction of charges are not to be entered in the new boxes.

System-side changes are required

Amended preliminary VAT return forms regarding the separate recording of the reduction of charges require system-side changes. If the accounting system does not provide the facility of separate posting, a manual solution must be created.