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Starting October 1, 2026, the procedure for calculating VAT on long-term contracts will change. If, due to amendments in the law, a seller becomes obligated to pay VAT after the contract was signed, and the buyer cannot deduct the tax, the seller must calculate VAT from the contract price, rather than on top of it.
The amendments were adopted in implementation of a Constitutional Court ruling, which found that automatically charging VAT above the contract price from buyers who are not entitled to a deduction is unconstitutional.
The amendments were adopted in implementation of a Constitutional Court ruling, which found that automatically charging VAT above the contract price from buyers who are not entitled to a deduction is unconstitutional.
What Has Changed
Previously, a seller could always charge VAT to the buyer separately, on top of the contract price. However, if tax legislation changed after the contract was signed, the seller found themselves in a difficult position: they had to pay the tax, but the buyer often could not deduct it. This was particularly relevant for companies on the simplified tax system that exceeded their income limits and became VAT payers.
The Constitutional Court ruled that automatically shifting the tax burden to the buyer disrupts the balance of interests between the parties. The legislator has now established a clear procedure.
The Constitutional Court ruled that automatically shifting the tax burden to the buyer disrupts the balance of interests between the parties. The legislator has now established a clear procedure.
How the New Rules Work
The new rules apply when three conditions are met simultaneously:
In this case, the seller calculates VAT using the settlement method — extracting the tax from the contract price rather than adding it on top. No invoice is required. The tax is paid out of the seller's own funds.
If at least one of these conditions is not met, the general procedure applies: VAT is charged on top of the price, and an invoice is issued.
- After the contract was signed, amendments to the Tax Code created a VAT obligation for the seller.
- The buyer is not entitled to deduct the VAT.
- The parties have not changed the contract price, and the contract contains no provision on how to act if the legislation changes.
In this case, the seller calculates VAT using the settlement method — extracting the tax from the contract price rather than adding it on top. No invoice is required. The tax is paid out of the seller's own funds.
If at least one of these conditions is not met, the general procedure applies: VAT is charged on top of the price, and an invoice is issued.
What Businesses Should Check Now
Companies with long-term contracts should consider the following:
Special attention should be paid by companies with long-term agreements — contractors, lessors, suppliers under framework agreements, as well as businesses on the simplified tax system that may become VAT payers.
- What price is specified in the contract — fixed or subject to revision?
- Are taxes included in the price or charged on top?
- Is there a procedure in the contract for action if legislation changes?
- What happens if the counterparty does not agree to amend the terms?
Special attention should be paid by companies with long-term agreements — contractors, lessors, suppliers under framework agreements, as well as businesses on the simplified tax system that may become VAT payers.
How We Can Help
Acsour experts are ready to help you adapt to the new rules:
- audit existing contracts for tax risks;
- advise on the application of the new VAT calculation rules;
- assist with amending contracts and adapting internal processes.
Want to check how the new VAT rules will affect your business and prepare in advance?
Submit a request — our experts will audit your contracts and help you adapt to the changes.
Submit a request — our experts will audit your contracts and help you adapt to the changes.
