Date of occurrence of the chargeable event

This article will introduce you to the determination of the chargeable event and the date of its occurrence, essential for the proper application of the provisions of the Value Added Tax Act(VATA).
Chargeable event within the meaning of Art. 25 (1) VATA is the supply of goods or services effected by taxable persons under this Act, the intra-European Union acquisition, as well as the importation of goods, while under Art. 11 RAVATA a chargeable event is also any supply effected by taxable persons under the Act, including supplies whereof the place of transaction is outside the territory of the country.
The chargeable event occurs on the date on which ownership of the goods passes or on which the services are performed. Pursuant to Art. 25 (7) VATA, the tax becomes chargeable upon receipt of the payment (with the exception of a payment received in connection with an intra-European Union supply). In certain cases the chargeable event occurs without any transfer of ownership over property - on the date of the actual delivery of the goods.

Date of occurrence of the chargeable event

Generally according to Art. 25 (2) VATA, the chargeable event occurs on the date on which ownership of the goods passes or on which the services are performed.
There exist some exceptions. For supplies with continuous performance for more than a year, for which no chargeability exists for a period of more than a year. In the case of such supplies, the chargeable event is considered to have taken place at the end of each calendar year and, in the calendar year in which supplies are terminated, the chargeable event occurs on the date of termination of the supplies - Art. 25 (5) VATA.
A chargeable event for services occurs on the date on which the service has been performed - Art. 25 (2) VATA. The service is deemed as performed on the date on which the revenue therefrom should be declared under the applicable accounting standards.

Date of occurrence of the chargeable event for actual delivery of the goods

The chargeable event occurs on the date of the actual handing over of the goods as per Art. 6 (2) VATA, except for supplies of newspapers, magazines, books and other publications, music audio and video recordings, as well as recordings of films on an electronic or technical medium, when other conditions are present, outlined in detail in VATA.

Date of occurrence of the chargeable event for supplies on the granting of copyright

This is the date on which the authors or copyright holders approve the allocated amounts of collective management organisations by signing a bilateral protocol. When, prior to the chargeable event, payment is made on delivery, the tax becomes chargeable upon receipt of the payment (Art. 12 (7) RAVATA).

Date of occurrence of the chargeable event for intra-European Union acquisitions

This is the date on which the chargeable event would have occurred upon a supply within the territory of the country (Art. 63 (1) VATA). An exception to this rule is provided only in intra-European Union acquisition of goods by a taxable person, which will be used for the purposes of their economic activity and the goods are dispatched or transported by or on behalf of the same person from another Member State. In this case, the chargeable event occurs on the date on which the transportation of goods on the territory of the country terminates.

Chargeable event for importation

It occurs and the tax becomes chargeable on the date on which the obligation to pay import duty within the territory of the country arises, or should have arisen, including where such an obligation does not exist or the rate of the said obligation is zero (Art. 54 (1) VATA). Wheere no payment obligation to pay import duty arises, the chargeable event occurs and the tax becomes chargeable on the date on which the formalities at customs end.

Chargeability of tax on the occurrence of a chargeable event

According to Art. 25 (6) VATA, on the date of occurrence of the chargeable event under the Act, the tax becomes chargeable in respect of the taxable supplies and an obligation for the registered person to charge the said tax shall arise, or grounds arise for exemption from the charging of tax in respect of the exempt supplies and the supplies whereof the place of transaction is outside the territory of the country.
Where an advance payment in full or in part is effected on a supply before the occurrence of a chargeable event, the tax becomes chargeable upon receipt of the payment (for the payment amount), with the exception of a payment received in connection with an intra-European Union supply, so that the tax is deemed as included in the amount of the payment.
Where a person who is not registered under VATA receives an advance payment in connection with a taxable supply and actually effects the said supply after the date of registration of the said person under this Act, the advance payment received shall be presumed to include a tax which becomes chargeable on the date on which the tax on the supply becomes chargeable.

Dependency of the date of occurrence of the tax event on the date of issuance of the tax invoice

The date of the chargeable event is not affected by the issuance of an invoice (tax or simplified) for delivery. On the contrary - the existence of the chargeable event is crucial to the issuance of the tax document, drawn up within 5 days from the date of occurrence of the chargeable event. Therefore, the fact that there is an invoice does not necessarily mean that the chargeable event has occurred for the purposes of VAT. It is entirely possible that such an event does not occur if no supply has taken place. In this respect, it is not advisable to issue a tax document before the supply has occurred as a chargeable event because it can lead to adverse consequences for the compiler of the invoice and the recipient thereof.