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09/29/17

Change in VAT rate as of 1 January 2018

Since the 2020 pension plan was rejected on Sunday, 24 September, new VAT rates will apply as of 1 January 2018. The standard rate will decrease from 8% to 7.7% and the special rate for accommodation services will decrease by 0.1% to 3.7%. The reduced rate of 2.5% remains unchanged.

This transition is a challenge for the companies. On the one hand, the companies have to adapt their software and on the other hand, they have to consider a number of things when issuing invoices.

The decisive factor for invoicing is not the invoice date, but the period in which the service was provided. Services provided in 2017 but not invoiced until 2018 are taxable at the old rate. However, the period of the service must be clearly stated on the invoice. If a service extends beyond 31 December 2017 (e.g. a newspaper subscription), the remuneration must be divided pro rata temporis between the old and the new tax rate.

The balance tax rates also changed from 01 January 2018 onwards