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If your company operates across borders, VAT in Europe is a key area to stay on top of. While the EU is working to streamline the rules, differences between countries still apply, from registration thresholds and reduced rates to e-invoicing and reporting requirements.
Understanding these rules is key for compliance. Our infographic provides a clear comparison of VAT differences across Bulgaria, Cyprus, the Czech Republic, Estonia, Hungary, Latvia, Poland, Portugal, Slovakia and Ukraine.
VAT in Europe affects companies involved in cross-border sales, service delivery, e-commerce and tax compliance.
This topic is particularly relevant for:
Companies expanding into new EU markets, who must meet country-specific rules for VAT registration, invoicing and compliance from day one.
E-commerce and digital services providers, who must apply the correct VAT rates across borders and managing OSS/IOSS obligations.
Non-EU businesses selling into the EU, who need to understand local VAT rules, appointing fiscal representatives and handling import VAT.
Shared service centres and outsourcing hubs, who coordinate VAT compliance and reporting for multiple countries across one organisation.
Small and mid-sized companies without in-house tax teams, who balance limited resources with growing VAT compliance responsibilities.
Corporate finance, tax and compliance teams, who manage accurate filings, ensuring deduction eligibility and avoiding financial penalties.
BULGARIA
0% applies to exports or intra-community supplies.
*Applies to:
CYPRUS
0% applies to healthcare, education, insurance, real estate.
No VAT applies for transactions (goods or services) which take place within the EU or non-EU under certain circumstances.
*Applies to:
**Applies to:
CZECH REPUBLIC
0% applies to exports, intra-community supplies, transactions exempt from tax without entitlement to tax deduction.
*Applies to:
ESTONIA
0% applies to export of goods and certain listed supplies of goods and services.
VAT exempt supplies listed postal, health, social, education, insurance.
*Applies to:
**Applies to:
HUNGARY
0% applies daily papers (issued at least 4 times a week).
*Applies to:
**Applies to:
LATVIA
0% applies to exports, intra-EU supplies and international passenger transport, medical care, state-recognized education, most banking, etc.
*Applies to:
**Applies to:
POLAND
0% applies to intra-Community supply of goods and export of goods, etc.
VAT exempt applies to healthcare, education, insurance, financial services.
*Applies to:
**Applies to:
PORTUGAL
0% applies to international passenger transport and intra-community supplies.
*Applies to:
**Applies to (among others):
ROMANIA
Exempt from VAT applies to healthcare services, education services, sports services, etc.
*Applies to (among others):
**Applies to (among others):
SLOVAKIA
0% applies to exports or intra-community supplies, healthcare, education, insurance, financial services, etc.
*Applies to:
**Applies to:
UKRAINE
0% applies to export of goods, certain supplies of goods for vehicles provision of certain services.
*Applies to:
**Applies to:
BULGARIA
The turnover threshold is reached in 12 consecutive months.
CYPRUS
The turnover threshold is reached in 12 consecutive months.
In addition, the registration is mandatory in case sales invoices are issued in the EU.
CZECH REPUBLIC
Company becomes a taxpayer either the day after it exceeds the 1st threshold in 12 consecutive months, or from January 1 of following year (in that case, the 2nd threshold applies).
ESTONIA
The turnover threshold is reached in 12 consecutive months.
HUNGARY
Registration obligation arises, among others, in such activities as: domestic sales in Hungary, transactions related to real estate, goods/assets purchased in Hungary and not shipped, organizing events, conferences, fairs.
LATVIA
VAT registration becomes mandatory in Latvia when the turnover threshold is reached in 12 consecutive months; a business receives services from EU or third-country suppliers, or a business provides services to VAT-registered entities in the EU.
Important: Registration must occur before receiving such cross-border services, regardless of transaction volume
POLAND
An entity is obliged to register as a VAT taxpayer if the turnover threshold is reached in 12 consecutive months or if sells certain goods, or if provides specific services.
PORTUGAL
The turnover threshold is reached in 12 consecutive months.
ROMANIA
The turnover threshold is reached. However, in case of any intra-community acquisition of goods in Romania OR an intra-community supply in Romania, the VAT registration in Romania becomes mandatory.
SLOVAKIA
The turnover threshold is reached in 12 consecutive months.
UKRAINE
The turnover threshold is reached in 12 consecutive months.
BULGARIA
CYPRUS
CZECH REPUBLIC
ESTONIA
HUNGARY
For residents is required for businesses engaging, among others, in domestic sales, moving their own goods into the country, participating in certain chain transactions or customs procedures, carrying out real estate-related transactions, purchasing goods that remain in Hungary, or organising events such as conferences and fairs.
LATVIA
POLAND
PORTUGAL
ROMANIA
SLOVAKIA
UKRAINE
BULGARIA
There is no threshold for non-resident businesses and registration for VAT is mandatory.
CYPRUS
There is no threshold for non-resident businesses and registration for VAT is mandatory.
CZECH REPUBLIC
There is no threshold for non-resident businesses and registration for VAT is mandatory.
ESTONIA
There is no threshold for non-resident businesses and registration for VAT is mandatory.
HUNGARY
There is no threshold for non-resident businesses and registration for VAT is mandatory.
LATVIA
There is no threshold for non-resident businesses and registration for VAT is mandatory. Specific cases include distance sales, assembly of goods, excise goods, or intra-EU acquisitions over EUR 10,000.
POLAND
PORTUGAL
There is no threshold for non-resident businesses and registration for VAT is mandatory.
ROMANIA
There is no threshold for non-resident businesses and registration for VAT is mandatory.
SLOVAKIA
There is no threshold for non-resident businesses and registration for VAT is mandatory.
UKRAINE
| Country | Mandatory e-invoicing | Mandatory real-time reporting |
|---|---|---|
| Bulgaria | ✔ For public procurement contracts since November 1, 2019. | X However, SAF-T reporting will be required in 2026 for large enterprises, in 2028 for mid-sized enterprises and in 2030 to all other taxpayers |
| Cyprus | ✔ For B2G transactions. | X |
| Czech Republic | X | X |
| Estonia | ✔ Starting from July 2025, Estonian taxpayers are required to issue e-invoices upon the buyer’s request. | X |
| Hungary | X Complete coverage with peace of mind | ✔ Just the basics, no strategic input |
| Latvia | ✔ Applicable for B2G transactions; from January 2026 also for all businesses in B2B. | X |
| Poland | X However, in 2026 it will be mandatory for businesses. | ✔ SAF-T reporting is mandatory for all taxpayers. |
| Portugal | X However, in 2026 it will be mandatory for all transactions. | ✔ SAF-T reporting is mandatory for all taxpayers. |
| Romania | ✔ For B2G and B2B transactions. | ✔ SAF-T reporting is mandatory for all taxpayers. |
| Slovakia | X However, in 2027 it will be mandatory for local transactions. | X |
| Ukraine | X However, electronic VAT invoices are mandatory. | ✔ SAF-T reporting is mandatory for large taxpayers; by 2027 it will extend to all taxpayers. |
| Country | Monthly | Quarterly | Simplified schemes for small businesses | |
|---|---|---|---|---|
| Bulgaria | ✔ | X | All businesses file VAT returns monthly. | X |
| Cyprus | ✔ | ✔ | Quarterly is for all businesses, but under certain conditions, monthly filings are allowed. | ✔ |
| Czech Republic | ✔ | ✔ | Quarterly is allowed if the turnover for the preceding calendar year did not exceed CZK 15,000,000 (EUR 602 197,50) | ✔ |
| Estonia | ✔ | X | All businesses file VAT returns monthly. | ✔ |
| Hungary | ✔ | ✔ | Monthly for businesses with net payable VAT exceeding HUF 1 million (approx. EUR 2,500) in the second year before the current one or in any quarter of the current year. Quarterly is allowed if total VAT from the start of the year stays below HUF 250,000 (approx. EUR 625). | ✔ |
| Latvia | ✔ | ✔ | Monthly is for businesses exceeding EUR 50,000 in turnover. Quarterly (or bi-annually) is for businesses below this threshold. | ✔ |
| Poland | ✔ | ✔ | Quarterly may be chosen by small taxpayers, i.e. entities whose turnover during the tax year does not exceed EUR 2,000,000, if 12 months have passed since their registration for VAT. | X |
| Portugal | ✔ | ✔ | Monthly for businesses with an annual turnover exceeding EUR 650,000. Quarterly for businesses with an annual turnover below EUR 650,000. | ✔ |
| Romania | ✔ | ✔ | Monthly is for all businesses, but for taxable persons whose turnover in the previous year was below EUR 100,000, quarterly filings are allowed. | ✔ |
| Slovakia | ✔ | ✔ | Quarterly is only for businesses with turnover lower than EUR 100,000 for 12 consecutive months. | ✔ |
| Ukraine | ✔ | X | All businesses file VAT returns monthly. | X |
Filing allowed only in local language
Bulgaria, Czech Republic, Hungary, Latvia, Poland, Portugal,
Romania, Slovakia, Ukraine
Filing allowed in both local and English language
Cyprus, Estonia
| Country | Goods or services with prohibited VAT deductions |
|---|---|
| Bulgaria | VAT on certain expenses like entertainment or personal use items may not be deductible, but consulting local regulations or a tax professional is recommended for precise information. |
| Cyprus | VAT on entertainment expenses cannot be claimed unless it concerns the employees of the taxpayer. VAT charged for purchases of goods or services in or outside the EU cannot be claimed most of the times. |
| Czech Republic | Goods or services that are not related to economic activity such as representation, gifts over certain amounts, employee benefits and cars for business purposes. |
| Estonia | Input VAT cannot be deducted for goods and services related to the reception of guests or the provision of meals or accommodation for employees (except for business trips). Input VAT deduction is restricted to 50% for passenger cars not fully used for business purposes. |
| Hungary | VAT deductions are limited on vehicles and fuel, the purchase, renovation or construction of residential real estate, food, beverages and catering, entertainment and taxi services. 30% of the VAT on landline and mobile phone use cannot be deducted. 50% of the VAT on services used for renting, operating and maintaining a car cannot be deducted. |
| Latvia | Certain VAT deductions are restricted, such as 60% of the input VAT related to representation expenses; 20% of the input VAT on business-related car purchases; maintenance, repair and fuel is non-deductible; for cars valued over EUR 75,000, input VAT on purchase, maintenance, repair and fuel is entirely non-deductible. |
| Poland | VAT deduction is not allowed for accommodation and catering services, transactions that are non-taxable or exempt, or for invoices that reflect activities not performed or amounts that do not match actual transactions. |
| Portugal | Certain expenses are restricted from VAT deduction, such as expenses on travel, entertainment and hospitality; purchase, lease and running costs of passenger cars not used exclusively for business purposes, such as rent-a-car. |
| Romania | VAT is not deductible for the acquisitions made in relation to operations which are VAT exempt without credit or for any acquisitions which are not made for business purposes. Also, a flat rate of 50% VAT deduction right is allowed in relation to the acquisitions of cars and for the cars expenses which are used for both business and personal purposes. |
| Slovakia | VAT deduction of refreshment and entertainment is not allowed completely. Potentially, as of 1.7.2025, there will be 50% VAT deduction for business cars for personal use. |
| Ukraine | VAT deduction is not allowed if taxpayer hasn’t received properly and timely registered VAT invoice from the supplier. |
| Country | Mandatory fiscal representative for non-EU businesses | Exceptions |
|---|---|---|
| Bulgaria | ✔ | n/a |
| Cyprus | ✔ | Exceptions exist if the non-EU business is established in a country that has a mutual assistance agreement with Cyprus. |
| Czech Republic | X | n/a |
| Estonia | ✔ | Not required for Norwegian or UK businesses |
| Hungary | ✔ | n/a |
| Latvia | ✔ | Applicable to IOSS, not for OSS. Specific exceptions may apply based on mutual agreements or specific circumstances. |
| Poland | ✔ | Not required for Norwegian or UK businesses |
| Portugal | ✔ | n/a |
| Romania | ✔ | n/a |
| Slovakia | ✔ | Non-EU businesses with obligation to register for any tax in Slovakia must choose a representative for postal delivery with place of business in Slovakia. |
Ukraine is not an EU member.
| Country | Penalties for late filing | Penalties for late payment |
|---|---|---|
| Bulgaria | Fines range from BGN 500 (EUR 255) to BGN 10,000 (EUR 5,113). | Interest of 5% is charged on the outstanding amount. |
| Cyprus | EUR 100 per return. | 10% of the outstanding VAT amount, plus daily interest at a rate determined by the Minister of Finance |
| Czech Republic | 0.05% of the assessed tax for each following day of delay but no more than 5% of the assessed tax. 0.05% of the determined tax deduction for each following day of delay but no more than 5% of the determined tax deduction. | Late payment interest is 8% plus the Czech National Bank’s repo rate on the first day of the half-year in which the underpayment occurred. For the first half of 2025, with a repo rate of 4%, the total interest rate is 12%. |
| Estonia | Penalties for late VAT return submission can be up to EUR 2,400 and for non-submission of the VAT return can be up to EUR 3,200. | Interest on late VAT payments is charged at 0.06% per day. |
| Hungary | If the 15-day compliance deadline set by the tax authority is missed, a first penalty of HUF 100,000 (approx. EUR 250) applies. If the taxpayer fails to comply after a second 15-day warning, the penalty increases to HUF 500,000 (approx. EUR 1,250). | Late payment interest is calculated daily at the Hungarian central bank base rate (6.5% in 2025) plus 5 percentage points. It is charged monthly but not imposed if the annual amount is below HUF 5,000 (approx. EUR 12.5). |
| Latvia | Fines range from EUR 285 to EUR 700. For late submissions, penalties vary based on the delay: EUR 25-70 for 3–10 days, EUR 75-150 for 11–20 days, EUR 155-280 for 21–30 days, EUR 285-700 for more than 30 days late. | Penalty of up to 30% of the unpaid amount may be imposed, along with late-payment interest at 0.05% of the unpaid VAT per day. For late payment, a late penalty of 0.05% of the unpaid VAT amount per day may be imposed. |
| Poland | Fines range between 10 and 120 daily rates. The daily rate cannot be lower than 1/30 of the minimum wage, nor can it exceed 400 times the minimum wage. | If a tax liability is not settled by the statutory deadline, it automatically becomes a tax arrears, triggering additional obligations such as late payment interest, fines, or other penalties as defined by the tax authority. |
| Portugal | Fixed penalty from EUR 150 to EUR 3,750, depending on delay and whether the omission is voluntary or detected by authorities. | Interest of 4% per year on overdue VAT plus additional penalties between 30% and 100% of the unpaid amount in case of repeated infractions. |
| Romania | Fines range between RON 1,000-5,000 (EUR 197-985) for medium and large taxpayers and RON 500-1,000 (EUR 99-197) for small taxpayers and individuals. | Late payment incurs 0.02% interest and a 0.01% penalty per day of delay. Undeclared or incorrectly declared tax is subject to a non-reporting penalty of 0.08% per day, which may be reduced by 75% under certain conditions. |
| Slovakia | Fines range from EUR 30 to EUR 16,000. | 15% p.a. counted on daily basis. |
| Ukraine | UAH 340 (EUR 7.24) for the first violation of submission (fail to submit or late submission); for the second similar violation during the year fine is UAH 1020 (EUR 21.73) | For unintentional delays, the penalty is 5% of the unpaid tax if paid within 30 days, and 10% if paid later. Intentional delays are fined at 25% for the first case and 50% for repeated delays over 90 days. Additional penalties apply from the 91st day, with responsible individuals fined between UAH 85–170 (EUR 1.81–3.62) for a first violation, and UAH 170–255 (EUR 3.62–5.43) for repeated offences within a year. During martial law in Ukraine, no fines or penalties apply if the tax liability is paid within 30 calendar days of receiving the notification. |
VAT has a direct impact on your financial operations, from how you price your products to how much working capital you have available. Errors in VAT treatment can inflate costs, trigger double taxation, or delay input VAT recovery, affecting both profitability and cash flow. Inaccurate reporting may also raise red flags during audits or due diligence, creating obstacles in financing, partnerships or M&A deals.
As digital VAT systems roll out across Europe, authorities are increasing scrutiny through real-time data checks and cross-border reporting. Businesses that don’t keep up with local requirements risk losing access to simplified schemes, facing restricted deductions or dealing with administrative delays that can disrupt operations and damage customer relationships
Whether you need support with VAT registration, filings, e-invoicing, or cross-border reporting, our experts are here to help you stay compliant and efficient. We work with businesses of all sizes, from fast-growing e-shops to multinational groups, ensuring their VAT processes are accurate, timely and tailored to local rules.
Learn more about our international VAT services and how we can support your operations across Europe and beyond.
For a more detailed overview, we have prepared individual eBooks on VAT in the following countries:
Czech Republic | Hungary | Poland | Romania | Slovakia
Market entry support | International tax services | Tax retainer | Tax advisory | Tax compliance | VAT services | IFRS consultancy and services | Personal income tax | Expat tax and global mobility | Transfer pricing | Transaction advisory | Advisory online portal | Online tax consulting | Fixed tax service packages
About Accace
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About Accace Circle
Accace operates internationally as Accace Circle, a co-created business community of like-minded BPO providers and advisors who deliver outstanding services with elevated customer experience and erase the borders of service delivery. Covering over 60 jurisdictions with more than 7,000 professionals, we support over 80,000 customers, mostly mid-size and international Fortune 500 companies from various sectors, and process at least 800,000 pay slips globally.
