Which advance return period applies, and by when it is due

A carpenter starts trading in March and pays 3,600 € of VAT by December. He reads in the statute that founders file for the calendar month, and files twelve returns for a full year. Four sentences further down, the law says that something else applies to the assessment periods up to 2026. He could have filed quarterly, and nobody would have told him.

An advance return is a self-assessment, not a notification

A business registered for VAT does not report its tax so that the tax office can work it out. It works the figure out itself and transmits the result. Section 18(1) of the VAT Act says so literally: an advance return in which the trader must calculate the tax for the period himself.

The distinction is not wordplay. A self-assessment has the effect of an assessment as soon as it arrives. No notice follows that one could wait for, and no review begins that would first confirm the amount. What was transmitted is, from that moment, the assessed tax.

Everything else follows from this. If your own figure takes effect immediately, then the period and the deadline are settled by the statute rather than by the tax office. The trader has to read both correctly, and a mistake usually surfaces only once it has already cost money.

The annual return is untouched by this. It comes in addition, after the end of the calendar year, and settles what the advance returns anticipated. A quarterly filer therefore submits five declarations a year: four advance returns and one annual return.

Transmission is electronic, through the officially designated interface. Only on application, and only to avoid undue hardship, may the tax office waive it; an official paper form then replaces the transmission. The waiver is the exception, not a second equally available route.

The calendar quarter is the default

Section 18(2) of the VAT Act opens with a sentence of five words: the advance return period is the calendar quarter. Everything that follows is a departure from it. Anyone unable to check whether a departure applies to them is at least on the side of the statutory default by filing quarterly.

The first departure is the month. If the tax for the preceding calendar year exceeds 9,000 euros, the calendar month is the advance return period. The words more than carry weight here: exactly 9,000 euros is not more than 9,000 euros, and whoever lands precisely on the figure stays with the quarter.

What counts is the tax, not turnover. That is the most common confusion in this provision. The relevant figure is the previous year's liability, that is VAT after deduction of input tax, as shown in the annual return. A turnover of 200,000 euros says nothing about it on its own.

The relevant year is also the preceding calendar year, not the current one. Someone who realises in May that they will cross the threshold this year does not switch mid-year. The period is fixed for the whole calendar year and changes only with the next one.

The third row is the only one that involves a decision by the tax office. The first two follow directly from the statute and take effect without anyone doing anything. So whoever hears nothing and applies for nothing is always in row one or two, never in the exception.

Below 2,000 euros the tax office may exempt you, it does not have to

If the tax for the preceding calendar year is no more than 2,000 euros, the tax office may release the trader from the obligation to file advance returns and to make advance payments. The verb is may, and it is not there by accident.

An exemption is therefore a discretionary decision. It does not take effect because the figure has been undercut, but because the tax office grants it. Until then the obligation stands in full: filing and payment, quarter after quarter, with every consequence of a missed deadline.

This is the costliest misreading of the provision. Someone with a low previous-year tax who concludes that they are automatically exempt simply files nothing. They consider themselves outside the procedure while the tax office sees four outstanding advance returns.

• the exemption applies only once granted in writing, not from the moment the amount is undercut
• it covers filing and payment, both of which fall away together
• the annual return is not affected and remains due in every case
• if the tax rises above the amount again, the basis for the exemption ends

An exempt trader therefore remains inside the procedure. What disappears is the anticipation during the year, not the tax itself. It then falls due in one go with the annual return, which tends to make cash planning harder rather than easier.

Anyone who wants the exemption applies for it. It is not offered, and the tax office does not review it afresh each year of its own motion. The application requires no particular form and rests on exactly one figure: the assessed tax of the previous year.

Founders, and the exception that expires at the end of 2026

Sentence 4 of the provision is unambiguous: where a trader takes up a professional or commercial activity, the calendar month is the advance return period in the current and the following calendar year. Read on its own, that means twelve advance returns for two years for every founder.

Two sentences further down sits the departure. For the assessment periods 2021 to 2026 something else applies in derogation from sentence 4, and it changes the outcome for practically everyone who founded in those years. The rule and its exception live in the same subsection.

The departure distinguishes two situations. Someone who traded for only part of the previous year converts their actual tax into an annual figure, and that converted figure is measured against the thresholds. Someone starting during the current year relies on the expected tax of that year.

For the carpenter from the opening, that means 3,600 euros over ten months converts to 4,320 euros a year. That is more than 2,000 and no more than 9,000 euros, so the quarter applies. Not twelve advance returns but four, and none of them was voluntarily excessive.

This exception carries a date, and that is its most important feature. It ends with the 2026 assessment period. From 2027 sentence 4 applies again unchanged, and the calendar month is then the period for every founder, however small the expected tax may be.

A course that quoted this figure without its expiry date would be wrong within months. So anyone founding in 2027 should plan for monthly filing from the outset, and anyone reading a 2025 leaflet today should first check which assessment period it refers to.

Two cases treated as if they were a start-up

Sentence 5 places two further situations alongside a start-up. In them too the calendar month is the period for the current and the following calendar year, although nobody takes up an activity in the usual sense. What is meant are the shelf company and the corporate shell.

A shelf company is a legal person or partnership entered in the commercial register that has never traded and demonstrably intends to do so. The month applies from the point at which the activity is actually taken up, not from registration.

A corporate shell is the takeover of a company that has traded before and is dormant or only marginally active at the time of the takeover. Here the month applies from the moment of the takeover. Both times the statute attaches to an event, not to an amount.

The purpose is easy to see. An empty vehicle with a register entry has no previous-year tax against which anything could be measured. Without sentence 5 it would automatically be a quarterly filer, and that is precisely what made such vehicles useful for VAT carousels.

• shelf company: monthly from the start of the actual exercise of the activity
• corporate shell: monthly from the moment of the takeover
• in both cases for the current and the following calendar year
• the departure in sentence 6 for periods up to 2026 concerns sentence 4 only, not sentence 5

The last point on the list is easily missed. Sentence 6 expressly says in derogation from sentence 4. Whoever activates a shelf company or takes over a shell therefore cannot rely on the conversion that is open to founders until 2026.

Who chooses the month voluntarily, and why

Section 18(2a) reverses the logic. If the preceding calendar year produced a surplus in the trader's favour of more than 9,000 euros, they may choose the calendar month instead of the quarter. The same amount, but measured against a refund.

This concerns businesses that permanently deduct more input tax than they owe output tax: heavy investment, heavy exports, little taxable domestic turnover. For them an advance return is not a payment but a refund, and a refund is better received twelve times a year than four.

The choice has a form and a binding effect. It is exercised by filing an advance return for the first calendar month by 10 February of the current year. It then binds the trader for that calendar year; switching back in July is not provided for.

That completes the four routes through the provision: the quarter as the rule, the month from a liability above 9,000 euros, the possible exemption up to 2,000 euros, and the option to file monthly where the surplus is large. Everything else concerns particular legal forms.

Finally the deadline, which reads the same for all four routes. Transmission is due by the tenth day after the end of the advance return period, and on the tenth day the advance payment falls due and must be paid by then. One deadline, two obligations.

Anyone who separates the two is counting on a payment term that does not exist. Filing buys no grace for payment; both end at the same moment. What can be done about it is the subject of the second module, and it is an application rather than a wait.

If the tenth day falls on a Saturday, Sunday or public holiday, the deadline ends on the next working day. This general rule of the Fiscal Code applies here too, and it is the only grace that arrives without an application. A calendar is no substitute for deadline control, but it helps.

The framework is now in place. The period follows from the previous year's tax, the deadline follows from the period, and both are fixed for the whole calendar year. Apply those three sentences correctly once and the question need not be asked again during the year.