The Ministry of Finance announced the updated tax categories of the electronic invoice system on December 30, 2022. The update refers to changes regarding the description of some tax categories (in terms of their use). The following updated rules apply to the two tax categories starting from January 1, 2023.

Two tax categories

Category OE – not subject to VAT 2 and refers to amounts:

  • Of the transfer of multipurpose value vouchers,
  • Of transactions based on which the persons referred to in Article 9 of the VAT Law are not taxpayers,
  • The tax base following Article 17, paragraph 4, point. 2) and 3) of the Law on VAT doesn’t include,
  • Of the instalments due for payment upon the transaction completion,
  • Of other transactions and claims based on which there is no obligation to calculate VAT (e.g. delivery of goods, i.e. provision of services free of charge, which is not subject to VAT taxation, claims based on damages, contractual penalties, deposits, etc.).

For transfer of multipurpose value vouchers claims, damages, contractual penalties, deposits, interest for late payment and other claims (on which there is no obligation to calculate VAT), there is no obligation to issue an electronic invoice. The exception is cases when the payment request goes to the public sector entity.

Category N – Annulment refers to:

  • The annulment of data on trade of goods and services that entrepreneurs carry out without compensation, including trade without compensation which is considered not to carry following Art. 6. paragraph 1. item 1) and 6a of the Law on VAT,
  • Annulment of the payment part amount due to the VAT Act application or another law. E.g. for sales between related parties where the calculating VAT base is determined following Article 17b for sales of excise goods for which the supplier of excise goods does not have an obligation to pay the excise duty, for the secondary raw materials and waste sale in cases when the tax paid rate is 1%, as well as the other grounds annulments.

Updates of this category also include two remarks

Starting from January 1, 2023, there is no obligation to issue an electronic invoice for the sale of goods, i.e. services that are carried out without compensation, regardless of whether it is a sale that is subject to VAT or a sale that is not subject to taxation, by the VAT Law.

However, if a public sector entity or a private sector entity issues an electronic invoice for a transaction, after reporting data on that transaction, showing that there is no obligation to pay for that transaction is done by cancelling the data on the transaction by specifying the corresponding quantity in the section: quantity with a “minus” sign.

After reporting data on the turnover of goods and services that is carried out for a fee, and in which there is a reduction in the amount to be paid, the reduction in the amount to be paid is shown by specifying -1 in the quantity part, and the amount for which the reduction is made in the price part.