On 26 October 2026, the Tax Administration published guidelines on invoicing requirements for periodic invoices covering services remunerated by a fixed monthly fee combined with a success-based component. The guidance mandates that each periodic invoice must separately disclose the scope and type of services rendered, the fixed fee portion, and the success fee portion. This ensures proper VAT liability determination for each component, especially where success fees may relate to different tax periods. The rules apply to all VAT-registered service providers using such fee structures.
Key Takeaways
- Itemized Invoicing: Invoices must break down fixed and success fees, describing services for each component to enable correct VAT reporting.
- Time of Supply: VAT on success fees becomes chargeable when the entitlement is confirmed, not when the periodic invoice is issued.
- Record Retention: Providers must keep detailed service logs linking success fees to specific outcomes for audit purposes.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement