Art. 78

(Art. 37 para. 1–4 VAT Act)

1. Persons newly entered in the VAT Register who wish use the net tax rate method must notify the FTA within 60 days of notification of their VAT number.
2. The FTA shall approve the use of the net tax rate method if in the first 12 months both the expected turnover and the expected taxes do not exceed the thresholds in Article 37 paragraph 1 VAT Act.
3. If no request is made within the period in paragraph 1, the taxable person must report for at least three full tax periods using the effective reporting method before they may change to the net tax rate method. An earlier change of the reporting method is possible at the time of any adjustment to the net tax rate that is not due to a change in the rates of taxation under Articles 25 and 55 VAT Act.
4. Paragraphs 1–3 apply to retroactive entries analogously.
5. The tax charged on goods and services on commencement of tax liability is taken into account in applying the net tax rate method. No subsequent input tax deduction may be made.