The Chamber Opposes the Removal of the €1,000 Threshold for VAT Declarations and the Mandatory Use of E-Invoices

The Ministry of Finance has started drafting amendments to the Value Added Tax Act, aiming to remove the €1,000 threshold for reporting invoice data in the VAT declaration appendix (KMD INF) and to impose a mandatory requirement for e-invoices in transactions between VAT-liable entities. The Chamber has proposed that these planned changes be abandoned, as they would significantly increase administrative burdens and costs for businesses, excessively restrict entrepreneurial freedom, and generate only marginal additional tax revenue.

Removing the €1,000 Threshold Is Not Justified
The draft amendment proposes that all VAT-taxable purchase and sales invoices must be reported in the VAT declaration appendix KMD INF, regardless of the invoice amount, thereby eliminating the current €1,000 threshold. This change is expected to increase the state's VAT revenues by approximately €4.1 million per year.

According to data from the Tax and Customs Board, cited in the draft amendment, about 45% of VAT-liable entities (approximately 54,000 businesses) currently enter transaction data into KMD INF manually. The Ministry justifies the need for this change by arguing that manual data entry errors result in lower tax revenues.

The Chamber of Commerce has expressed its opposition to the removal of the €1,000 threshold. A survey conducted among businesses revealed that 82% of respondents oppose the change, as it would significantly increase costs and administrative burdens while providing only a marginal benefit to state tax revenues.

In addition to the costs associated with adopting, upgrading, or replacing accounting software to avoid manual data entry, businesses would face increased workloads due to the higher volume of small invoices to be reported. More transactions to declare also increase the likelihood of errors. Therefore, eliminating the €1,000 threshold is not a reasonable measure.

The Chamber also emphasized that if the Ministry of Finance intends to proceed with this proposal, a more thorough analysis is needed regarding the proportionality and constitutionality of the change. Additionally, the impact on businesses should be assessed, including the costs of acquiring, upgrading, or maintaining accounting software, as well as the increased workload from manual data entry. Further considerations include the implications for reporting retail sector receipts and advance invoices in KMD INF and the potential risk that businesses may deliberately avoid VAT registration to bypass the reporting obligation.

Mandatory E-Invoicing for Transactions Between VAT-Payers
The proposal also includes a requirement for machine-readable e-invoices in transactions between VAT-registered businesses, which is expected to increase VAT revenues by approximately €2.3 million per year.

The Chamber of Commerce has informed the Ministry that while it supports the broader adoption of e-invoices—given their advantages, such as preventing lost invoices—it opposes making e-invoicing mandatory in the private sector. A survey conducted among businesses found that 76% of respondents oppose this requirement. Currently, only 7% of VAT-registered businesses have indicated in the business register that they accept e-invoices, meaning that 93% (120,047 businesses) would be required to implement e-invoicing under the proposed change.

The requirement would impose additional costs on businesses that either do not use accounting software or use software that does not support e-invoices. These costs would include acquiring, upgrading, or replacing accounting software and training expenses.

The Chamber argues that businesses should retain the freedom to choose how they manage their accounting and invoicing. The mandatory e-invoicing requirement excessively restricts business freedom, lacks practical necessity, generates only marginal additional tax revenue, and could be promoted more effectively through voluntary incentives rather than coercive measures.

Additionally, the Chamber stressed that if the Ministry intends to proceed with this proposal, the feasibility of the implementation timeline should be thoroughly evaluated. The proposed implementation date of January 1, 2027, is unrealistic, as businesses need sufficient time to gradually adopt the necessary changes.