VAT Changes in Central and Eastern Europe in 2025: Key Reforms and New Challenges

Central and Eastern Europe is pushing forward with dynamic VAT reforms, aiming to match EU directives, close tax gaps, and embrace digitalization. According to LeitnerLeitner’s VAT Newsletter for Q4 2024, several CEE countries introduced or announced significant changes impacting business operations and investment strategies.

Hungary

Electronic invoicing: Stricter data reporting to the NAV Online Számla system, covering transactions with foreign partners.

VAT rates: The standard rate of 27% remains for 2025. Certain food-related reliefs have been extended.

Poland

Mandatory KSeF (National e-Invoicing System): Effective from 1 July 2024. All taxpayers must issue invoices electronically.

Paper invoices allowed only in exceptional cases.

VAT rates: Reduced rates for food and energy extended until the end of 2024.

Czech Republic

Unified reduced rate: From January 2024, the two reduced rates (10% and 15%) merged into a single 12% rate.

Affected sectors include food, books, and children’s goods.

Businesses report challenges adapting systems to the new rate.

Slovakia

Preparing for mandatory e-invoicing rollout in 2025.

Discussions ongoing about potential VAT rate cuts for basic food items to counter inflation.

Slovakia backs EU initiatives to combat the VAT gap.

Romania

New SAF-T (Standard Audit File for Tax) reporting required for large taxpayers as of 2024.

Increased scrutiny on high-risk transactions.

Reduced VAT rate of 9% on food remains under debate.

Bulgaria

Complete switch to electronic document exchange planned for 2025.

VAT rate: Standard remains at 20%. Reduced rates for restaurants and tourism extended until end of 2024.

Enhanced controls to prevent supply chain fraud.

These reforms show the region’s commitment to modernizing tax systems while posing significant compliance challenges for businesses. Digital transformation comes at a cost, as companies face technology investments and tight deadlines for adaptation.

CEE countries remain a bellwether for how fast tax legislation evolves to economic and EU demands. For investors, staying on top of local tax changes is crucial to avoid penalties and seize potential tax benefits.