How Carry Forward Works in Vatify

Under the carry forward option, the VAT credit is rolled into the next filing period and applied against the next VAT liability. Vatify refers to carry forward option as "To Compensate" — the credit balance compensates future liabilities instead of being claimed as a cash refund.

The Credit Pool Per Country

Vatify maintains a carry forward balance per client per country. When a return is filed with a credit result, Vatify:

1. Records the credit amount in the client's profile for that country
2. Pre-populates the "Available Credit" field in the next period's return
3. Applies that credit to reduce the calculated VAT liability (if client select "To compensate" option, they can also select "Request Refund" if final credit position is negative)

This balance is tracked separately per country registration — and even per sub-jurisdiction when needed (e.g., Spain's Navarra territory has its own carry forward pool, distinct from mainland Spain).

User Flow

When generating a VAT return draft:

• If the result is a credit, the user can choose between "Request Refund" or "To Compensate" (Credit position is calculated before to display or hide those payment options)
• If they choose "To Compensate," the system stores the amount as available credit
• On the next period's return, that credit is automatically pulled in and displayed
• The net position is then recalculated: if the new period is also a credit, it accumulates; if it's a liability, the carry forward reduces the amount due.

Country-by-Country Rules

Carry forward rules vary significantly across European countries. Here's how the main countries where Vatify has implemented or is implementing carry forward logic behave.

Countries already Auto-Managed by Vatify

1. Spain (ES)

Authority: AEAT (Agencia Estatal de Administración Tributaria)

Spain allows carry forward to the following period as a default option for credit positions when the return is in a credit position. Refunds can only be requested at year-end (in the last quarterly return, Q4 reporting period) unless the company is enrolled in the Monthly Refund Register (REDEME). For most companies, VAT credit accumulates as carry forward across Q1–Q3 and can only be refunded at year-end.

VATify behavior:

• "To Compensate" option shown when result is credit
• Carry forward disabled when result is a payment
• Navarra (a separate fiscal territory within Spain) has its own independent carry forward balance

2. Spain – Navarra (ES/NAV)

Navarra is governed by its own Hacienda Tributaria de Navarra, separate from AEAT. VATify treats this as a distinct jurisdiction with its own carry forward pool — the Navarra credit does not mix with the mainland Spain balance.

3. Slovenia (SI)

Authority: FURS (Finančna uprava Republike Slovenije)

VAT credit reported in the periodic VAT return can either be refunded by the tax authorities or carried forward to offset future VAT liabilities, at the taxpayer’s choice. 

From 1 January 2025, new rules introduce a 5-year limitation: any VAT surplus must either be used to offset future liabilities or be claimed as a refund within five years from the relevant VAT return; otherwise, the right is lost. These limitations apply only to VAT surpluses arising from 2025 onwards, while existing surpluses from earlier periods can still be carried forward or refunded until 31 December 2029 under transitional provisions.

4. Italy (IT)

Authority: Agenzia delle Entrate

Italy has a more complex credit management framework, in which VAT credit is normally carried forward each quarter. 

The minimum refund amount is EUR 2,582.28, and the VAT refund is usually claimed through the annual VAT return, submitted the following year. 

It is possible to submit quarterly refund requests (TR form) if the balance for the relevant period exceeds €2,582.28. Italy also supports F24 offset — using the VAT credit to offset other tax liabilities (not just VAT). 

5. Romania (RO)

Authority: ANAF (Agenția Națională de Administrare Fiscală)

Romania allows credit balances to be carried forward to the following period.

Countries planned to be Auto-Managed by Vatify

Lithuania (LT)

• Authority: VMI (Valstybinė mokesčių inspekcija)
• Lithuania supports the "To Compensate" position.  

Belgium (BE)

Authority: FPS Finance (SPF Finances / FOD Financiën)

VAT refund rules:

• Refund via the VAT return: by ticking the refund box in the quarterly or monthly VAT return. As from 2025, the monthly filers will be able to request the refund of the VAT credit on a monthly basis. This will be the VAT credit resulting from box 72 only for that particular declaration period, and not for the accumulated VAT credits from previous months. Credits from VAT returns will only be refunded if the last six VAT returns were submitted on time and if the VAT credit exceeds the threshold of 50 EUR.
• Refund via the online tax account: If the refund box not been ticked when submitting the VAT return, the VAT credit will be deposited on the provision account. This credit is then available to settle future VAT dues. As from the moment the credits are deposited on the provision account, the company can apply for the (partial) refund if the amount exceeds the threshold of 50 EUR.

Amounts below threshold are automatically carried forward to the taxpayer's account

VATify is currently implementing this conditional logic — today the system only shows "Request Refund," which is not always compliant with Belgian rules. The future planned solution will automatically enforce carry forward when thresholds aren't met and accumulate the balance across periods.

Luxembourg (LU)

Authority: AED (Administration de l'Enregistrement, des Domaines et de la TVA)

Luxembourg supports both monthly and quarterly returns, with carry forward enabled for both. The "To Compensate" return type has been specified and is ready for development.

How Carry Forward Appears in VATify

In the Vatify interface, carry forward is visible in two places:

1. Return draft: When preparing a return, the system shows an "Available Credit" field pre-populated from previous periods. The user can see the accumulated balance before submitting.
2. Client profile: The client's country registration page shows a "VAT Credit" section tracking the current carry forward balance per country.

There are plans to make this even more auditable — requiring a supporting document (e.g., previous return PDF or payment receipt) to be attached whenever a carry forward or prepayment amount is automatically populated, ensuring there is always a traceable source for every pre-filled value

Summary: Carry Forward Functionality in VATify 
 

Country	Status	Key Rule
Spain (ES)	Active	Carry forward only when credit; refund only at year-end (or via REDEME)
Navarra (NAV)	Active	Separate balance from Spain
Romania (RO)	Active	Standard carry forward
Slovenia (SI)	Active	Standard carry forward
Italy (IT)	Active/Expanding	Complex: IVA TR threshold (€2,582.28), F24 offset, annual VAT return
Luxembourg (LU)	Planned	Standard carry forward
Lithuania (LT)	Planned	Standard carry forward
Belgium (BE)	Planned	Standard carry forward