Changing VAT rates is one of the most delicate adjustments from both an accounting and fiscal perspective, and the year 2025 is no exception. Every time a VAT rate changes, questions arise regarding the treatment of advance payments already invoiced before the new rules come into force. The issue becomes even more important when the amounts involved are significant or when ongoing contracts include partial deliveries.

For 2025, the VAT rate changes require particular attention to the moment when the advance invoice was issued and the date on which the actual delivery takes place. According to Article 291 (4) of the Fiscal Code, the new VAT rate applies based on the moment when VAT becomes chargeable, that is, the date of delivery of the goods or performance of the service, not the date when the advance payment was collected.

In other words, if a company issued an advance invoice in December 2024 at the 19% VAT rate, and the delivery occurs in September 2025—after the new rate comes into effect—a VAT adjustment must be made.
. The adjustment involves partially reversing the VAT initially applied to the advance and re-invoicing the entire delivery at the new rate. In practice, this is done either through an adjustment invoice or by correcting the final invoice, depending on the specific circumstances.

For example, consider the following scenario: a company issued an advance invoice in March 2025, applying the standard VAT rate of 19%, valid until 31 July 2025. However, the delivery takes place in September 2025, after the new 21% rate enters into force. In such a situation, the company must adjust the VAT, because VAT becomes chargeable on the delivery date—not on the date the advance was received.

The adjustment is performed by issuing a correction invoice or by including the difference in the final invoice. The VAT initially applied to the advance (19%) is reversed, and the new 21% rate applies to the full value of the delivered goods. This adjustment is mandatory to comply with the principle that VAT must reflect the applicable rate at the time of delivery.

In complex contracts involving instalment payments or successive deliveries, correctly applying VAT rates may require careful analysis. Companies are advised to identify all advances invoiced before the rate change, review the contractual terms, and determine the chargeability date for each position. This is the only way to avoid costly future adjustments or inconsistencies in tax declarations.

It is also worth noting that when an advance is collected and the delivery occurs within the same fiscal period, no adjustment is required, even if the VAT rate changes in the meantime. Everything depends on the actual delivery date, as supported by the relevant documents (delivery notes, acceptance reports).

For companies applying the cash-accounting VAT system, the rules become slightly more complex because VAT becomes chargeable on the date of collection rather than the date of delivery. In these situations, the analysis must be performed case by case, and adjustments should be made proportionally to actual collections and deliveries.

In an increasingly dynamic fiscal environment, a change in VAT rates is not merely the modification of a number on an invoice. It often requires internal adjustments in the invoicing process, accounting records, and fiscal reporting. Correctly adjusting advance payments is essential for maintaining tax compliance and avoiding penalties or recalculations from the authorities.

If you have any questions regarding the regularization of advances in the event of a change in the VAT rate, please write to us using the form on Cabot contact page. A tax consultant can help you identify the correct solution for your company’s specific situation and avoid reporting errors.