What VAT Means for a Company
A company registered for VAT is a company that has VAT payer status and records the relevant transactions in its accounting and tax reporting. It is important for an accountant not to limit the review to formally confirming the status: the accounting policy, information system settings, electronic invoices and the correct recognition of input VAT as a credit must also be checked.
The mere fact of conducting business does not answer whether a particular company must account for VAT. First, its current tax status is established, and then each transaction is analyzed: sale, purchase, return, adjustment or another business event. This is especially important if the organization has only recently started paying VAT or keeps records for several legal entities in a single information database.
The settings and accounting procedures of one company should not be automatically transferred to another. Even when organizations conduct similar activities, they may have different VAT statuses. As a result, the same report may be generated correctly for one legal entity but fail to display the expected data for another.
Company VAT: What to Check in the Accounting System
If VAT information is not included in a report, the company’s tax status should first be compared with its accounting settings. In practice, the reason may be that one company was a VAT payer while another was not. If the second organization subsequently became a VAT payer, its previous accounting policy settings may no longer correspond to the actual situation.
The accountant should check:
the date from which the company accounts for transactions as a VAT payer;
whether the accounting policy setting corresponds to that date;
whether the organization’s tax status is specified correctly;
whether electronic invoices for the required period have been recorded;
whether documents are included in reports after being posted;
whether the necessary accounting system updates and fixes have been installed.
After the accounting policy is changed, electronic invoices may need to be reposted from the beginning of the relevant period. For the case described in the source data, the solution was to adjust the accounting policy and repost all electronic invoices from the beginning of 2026. However, before mass reposting, the accountant should assess the effect of the operation on periods that have already been closed, registers and prepared reports.
If several companies are maintained, it is better to check each one separately. This helps avoid confusing a settings issue with an absence of transactions or a difference in tax status.
How to Account for a Company’s Input VAT
Input VAT cannot be assessed solely on the basis of the standard rate applied by the company to its sales. The rate specified by the supplier in the electronic invoice, the purpose of the purchase and the connection between the purchase and taxable turnover all matter.
The clarification concerning the new Tax Code provides an example: a company purchases medical services subject to VAT at a rate of 5%, while its sales are taxed at a rate of 16%. In this case, the amount of VAT shown in the supplier’s electronic invoice—that is, the amount calculated at the rate of 5%—is recognized as a credit. The difference between the purchase and sales rates does not in itself mean that input VAT must be recalculated at the company’s sales rate.
For the accountant, this means that at least three circumstances must be checked for each purchase:
the amount of VAT shown in the electronic invoice;
whether the purchase is used for taxable turnover;
whether the transaction as recorded corresponds to the source documents and accounting data.
The supplier’s rate should not be mechanically replaced with the rate that the company applies to its own sales. It is the amount of VAT shown in the electronic invoice that is recognized as a credit, provided that the conditions for claiming the credit are met.
What an Accountant Should Do in 2026
It is advisable to begin VAT work with a step-by-step review of the source data rather than with correcting the report. First, confirm the company’s status and the date from which it applies. Then compare this information with the accounting policy and the software settings. After that, check the documents, electronic invoices and the flow of data into the reports.
A practical procedure may be as follows:
- Confirm the company’s current VAT status.
- Check the date from which the relevant accounting procedure applies.
- Compare the status and date with the accounting policy in the information system.
- Check the electronic invoices for the period under review.
- Make sure that input VAT is recorded in the amount specified by the supplier.
- If necessary, install the fixes provided for the accounting system.
- After adjusting the settings, repost the affected documents and generate the report again.
Before changing documents that have already been posted, it is advisable to save the results of the initial review and determine which periods will be affected. If reports for those periods have already been prepared or submitted, the consequences of the corrections must be assessed separately.
Article numbers in the Tax Code should be checked against the current version as applicable to the specific transaction. The provided data does not include article numbers, so specifying them without documentary confirmation would be incorrect.
Frequently Asked Questions
What does the expression “company registered for VAT” mean? — It usually refers to an organization that has VAT payer status and records taxable transactions, input VAT and electronic invoices in its accounting records.
Why is a VAT report generated for one company but not for another? — A possible reason is a difference in the organizations’ tax statuses or accounting policy settings. Each company must be checked separately, and its settings must be compared with the date from which VAT accounting began.
What should be done if a company has recently started paying VAT? — The accounting policy should be updated, the electronic invoices should be checked, and it should be determined whether documents need to be reposted from the date on which the new status took effect. The report should then be generated again.
Can VAT at 5% be recognized as a credit if the company’s sales are taxed at a rate of 16%? — Yes, in the clarification provided, the amount of VAT shown by the supplier in the electronic invoice at the rate of 5% is recognized as a credit if the purchase is used for turnover taxed at the rate of 16%.
Must input VAT be recalculated at the company’s sales rate? — No, the difference in rates does not in itself require such a recalculation. The amount of VAT in the electronic invoice and the conditions for recognizing it as a credit should be used as the basis.