(Art. 37 para. 1–4 VAT Act)
- Taxable persons who wish to change from the effective reporting method to the net tax rate method must notify the FTA at the latest 60 days after the beginning of the tax period from which the change is to be made.
- The FTA shall approve the use of the net tax rate method if in the prior tax period neither of the thresholds in Article 37 paragraph 1 VAT Act was exceeded.
- The input tax previously deducted on the fair value of the goods and services at the time of the change, including the portion corrected as a subsequent input tax deduction, must be refunded to the FTA. The declaration must be made in the last reporting period before the change. Article 31 paragraph 3 VAT Act and Article 69 paragraphs 1–3, 70 and 71 apply by analogy.
- If simultaneously with the change to the net tax rate method the manner of reporting under Article 39 VAT Act is changed, the following corrections must also be made as per the date of the change:
if a change is made from agreed to collected considerations, the taxable person must reverse the following in the last reporting period before the change:
1. the declared tax on the taxable supplies invoiced but not yet paid on the date of change (debtor items); and
2. the input tax deduction on the taxable supplies invoiced to it but not yet paid (creditor items), insofar as these are input taxes that do not already have to be corrected on the basis of paragraph 3.
if a change is made from collected to agreed considerations, the taxable person must in the last reporting period before the change:
1. declare the tax on the existing debtor items at the appropriate statutory tax rate; and
2. deduct the tax charged on the creditor items as input tax.