Value Added Tax (VAT) Guidelines: Slovakia

The following transactions are subject to VAT in Slovakia:

 

Certain actions carried out for no consideration are also deemed to be taxable supplies. For example: Usage of the business assets for non-business purposes by taxable person or its employees, giving of business gifts etc.

 

Certain transactions are not subject to Slovak VAT. For example: Assumption of a receivable, compensation pay­ments for damage, transfer of a business as a going concern etc.

 

In general, if the payment for a supply is effected prior to the supply, the VAT liability arises on the date when the payment was received.

 

The standard VAT rate is 20 percent and the reduced rate is 10 percent. 

 

There are some rules for VAT exemptions as well. It will be distinguished between VAT exemptions with input VAT recovery (so-called zero rated supplies) and VAT exemption without an input VAT deduction (exempt supplies).

 

Zero rated supplies are, for example, exports of goods from the Slovak Republic to a third country, intra-Com­munity supply of goods from the Slovak Republic to another EU Member State or cross-border passenger and their luggage transport. 

 

VAT exempt supplies without input VAT deduction are, for example, universal postal services, sale of stamped stationery and fiscal stamps or supplies in connection to healthcare and Social assistance services. 

 

If a foreign entrepreneur supplies goods from another EU Member State to the Slovak Republic and the custo­mer is a Slovak VAT payer, the supply of goods is considered as intra-Community acquisition of goods and the Slovak VAT payer is obliged to apply Slovak VAT under the reverse charge mechanism.

 

Supply of goods by a business to a customer who is VAT registered in another EU Member State (provided the goods are transported from Slovak Republic to another EU Member State) is considered as an intra-Community supply of goods which is exempt from Slovak VAT. The acquisition of goods must be subject to VAT in the other EU Member State.

 

In general, the transfer of own goods from the Slovak Republic to another EU Member State or vice versa by the same business person is also considered as taxable supply.

 

Generally, the place of supply of services provided to another business person (business to business services – B2B) is in the country where the recipient of these services is established. 

 

Generally, the place of supply of services provided to non-business persons or to customers who do not receive such services for their business (business to customer services – B2C), is in the country of the provider of these services. 

 

Apart from these general rules, there are special rules for certain types of services. 

 

Certain local transactions are subject to domestic reverse charge mechanism. 

 

Provided that a supply is performed by foreign person and that the recipient is a taxable person established in Slovakia, selected supplies are subject to reverse charge mechanism and the recipient of the services/goods is liable to apply Slovak VAT. 

 

If a Slovak VAT payer exports goods to a customer outside of the EU and the goods are dispatched or transpor­ted by the supplier or by the purchaser (without seat, place of business, fixed establishment or domicile within in Slovakia), the supplier does not need to charge VAT. 

Taxable person established in the Slovak Republic is required to register as a VAT payer if he is an Entrepreneur who exceeded the turnover of EUR 49,790 in preceding 12 consecutive calendar months. 

 

Taxable person non-established in the Slovak Republic is obliged to register as a VAT payer, if he met one of the following conditions:

 

There are some simplification rules to avoid a registration of a non-established person for VAT purposes in the Slovak Republic:

In general, businesses registered for Slovak VAT must submit VAT returns on monthly basis. The VAT payer may switch to a tax period of calendar quarter, if more than 12 calendar months passed from his registration as a VAT payer in Slovakia and if his turnover for 12 preceding calendar months did not exceed EUR 100,000. VAT registered business persons must submit the VAT return and pay the VAT within 25 days of the end of the rele­vant tax period. VAT returns and supplementary VAT returns, EC Sales Listings and VAT ledger statements must be filed electronically. VAT payers except for VAT payers who are non-established (foreign) persons must also file nil VAT returns. 

 

A VAT payer is obliged to complete ESL form, for example, in case of a tax-exempt supply of goods to another EU Member State to a person identified for tax purposes in another EU-Member State.

 

EC Sales List (recapitulative statement) should be submitted electronically in the same deadline as VAT return. EC Sales Lists must be filed on monthly basis, unless the value of the goods referred to in the first three points in the relevant calendar quarter, as well as in the preceding 4 calendar quarters did not exceed EUR 50,000 – in such case the VAT payer may opt to file EC Sales List on quarterly basis. EC Sales Lists must be submitted within 25 days of the end of the relevant tax period. Penalties for non-filing of an EC Sales List of up to EUR 3,000 apply.

 

The Intrastat reporting is mandatory for persons registered or identified for VAT in Slovak republic, if they have dispatched goods to another EU-member state or have received goods from another EU-member state. The exemption threshold for Intrastat reporting for the year 2022 is set to EUR 1,000,000 for goods dispatched (Export) and EUR 1,000,000 for goods received (Import). 

 

Penalties for late filing or non-filing of Intrastat declarations of up to approx. EUR 3,300 may be imposed – however this is not a common practice.

 

Failing to register for VAT in time results in the obligation to file a registration application and penalty for late filing.

 

The late filling of a VAT return results in penalty and, if applicable, to late payment interest for late payment of tax. The failure-to-file penalty amount can range from EUR 30 to EUR 16,000.  

 

The VAT payer is also obliged to pay late payment interest resulting from unpaid tax for each day of delay. The late payment interest rate amounts to 15 percent p.a., or 4-times the basic ECB interest rate (whichever is higher).

 

Moreover, a situation where the VAT due is increased (for example as a result a performed tax audit, or as a result of a filed supplementary VAT return) is penalized by the tax authorities as well. The corresponding penalties amount to:

A VAT payer registered for VAT in Slovak Republic may in general deduct input VAT in the VAT return under the further preconditions (e.g. the supplies are used for its economic activities as a VAT payer). There are several limitations, when only part of the VAT can be deducted, e.g. VAT payer provides both taxable and VAT exempt supplies or VAT payer is using its business property also for non-business purposes etc.

 

Input VAT from certain supplies (e.g. entertainment and representation expenses) cannot be deducted at all.

 

Persons registered for VAT in another EU Member State and not established in the Slovak Republic may apply for VAT refund under the following conditions: 

 

The VAT payer must fill in an electronic refund application in the country of establishment. The application must be filled in Slovak or English language and delivered to the tax authority by 30 September of the calendar year following the refund period.

 

A foreign person from a third country (non-EU) can under special conditions apply for the refund of tax by filing an application with the Tax Office Bratislava.

 

There are several restrictions that limit VAT refund in Slovak Republic:

 

Input VAT on certain employee expenses:

Slovak VAT payer must issue a tax document for almost all taxable supplies and for VAT exempt supplies with credit made to other taxable persons. The tax documents do not need to be in Slovak language only, but upon request of the tax administrator, the VAT payer should arrange for their translation into Slovak language.

 

A VAT credit note is used to reduce the VAT originally charged on a supply. A credit note must be issued if:

 

Corrective invoices including credit notes are in general subject to the same rules as those for regular invoices. Moreover, they should clearly and explicitly relate to the original invoice. 

 

An electronic submission of invoices (for example via email, computer fax) is generally possible. Specific con­di­tions must be fulfilled by the recipient regarding the validity and the integrity of the issued/received invoice, for example: an electronic signature pursuant to the relevant legislation, or an electronic data interchange.