Country Guide - VAT in Slovakia

VAT in Slovakia - Three Types of Rates

There are three types of VAT rates in Slovakia:

1. Standard VAT rate,

2. Reduced VAT rates,

3. Zero VAT rate.

How much is VAT in Slovakia Regions?

Unlike other countries in the European Union (EU), such as France, Italy, or Spain, the Slovakian VAT law does not include regions with a special Slovakia VAT rate.

VAT Registration Threshold

The VAT legislation in Slovakia, along with explanatory guidelines provided by the Slovakian government and the Tax Authority, includes information about the VAT registration threshold in Slovakia.  Slovakia's VAT registration threshold for domestic businesses is EUR 50,000 for 12 consecutive months. 

In addition to this, if, in a single transaction, the turnover not only exceeds EUR 50,000 but also exceeds EUR 62,500 at the same time, the taxable person must act quickly and submit a registration application to the tax office within five working days from the moment its turnover surpasses EUR 62,500. In contrast, Slovakia does not have a registration VAT threshold for foreign businesses operating within its borders.

Additionally, there is no registration threshold for non-EU suppliers of Electronically Supplied Services. For intra-EU distance sales of goods and B2C supplies of services, Slovak legislation implements a harmonized threshold of EUR 10,000 at the EU level.

Slovakia also transposed the EU SME rules into national legislation. Therefore, small businesses with an annual turnover in the entire EU of less than EUR 100,000 and an annual turnover in Slovakia of less than EUR 50,000 are eligible for this SME scheme.

Types of Taxable Activities in Slovakia

If individuals or businesses independently carry out any of the activities defined as taxable, they are considered taxable persons. These activities include the supply of goods and provision of services in Slovakia for a fee, the reception of reverse-charge services, and the export and import of goods.

VAT Registration Process

The registration process in Slovakia is defined for both domestic and foreign businesses. It includes the documents that should be submitted, deadlines, and exemptions.

Slovakia VAT Registration for Domestic Businesses

Individuals and businesses should apply and provide the required documents to the Tax Authority to complete the VAT registration process in Slovakia. The Tax Authority should complete the registration process within 21 days from the date the application is received.

One specific requirement in this process is that all applicants registering for VAT purposes should also provide information on all foreign and Slovak bank accounts used for business purposes.

Domestic businesses can register for VAT voluntarily. However, when the threshold is exceeded, they should initiate the mandatory VAT registration process 20 days after the end of the calendar month.

Slovakia VAT Registration for Foreign Businesses 

Under Slovakian law, a foreign business is defined as one without a permanent establishment or location within Slovakia. Since foreign businesses have no registration VAT threshold, they should register for VAT purposes before engaging in taxable activities in Slovakia.

The Slovak Tax Authority has a shorter deadline for completing the registration process for foreign businesses than domestic ones. Therefore, once the application is submitted with all necessary documents, the Tax Authority has seven days to complete the process.

Foreign businesses should submit documents with their application, including an original or notarized document from the Commercial Register translated into Slovak, and a notarized and translated Power of Attorney if they appoint legal representatives to complete this procedure.

Exemptions from this rule include documents in Czech, for which translation and notarization are unnecessary.

VAT Returns in Slovakia 

The standard tax period for submitting VAT returns in Slovakia is monthly or quarterly through the Slovak Tax Authorities' e-platform. The deadline for submitting VAT returns is the 25th of the month following the end of the reporting period.

Penalties for Failure to File Tax Return

Depending on the type of offense, businesses and individuals, foreign or domestic, may face penalties of up to EUR 20,000. For late VAT registration, penalties range from EUR 60 to 20,000. Notably, there are no interests for this offense.

Penalties for late payments range from EUR 30 to 16,000. However, additional penalties between EUR 30 and 16,000 can be imposed on offenders if they do not pay VAT after the Tax Authority issues a notice.

VAT Rules for Electronically Supplied Services 

The EU VAT Directive 2006/112/EC defines Electronically Supplied Services (ESS) as services provided automatically or with minimal human intervention through digital networks, such as the Internet.

Like the rest of the EU Member States, Slovakia implemented the EU VAT Directive rule in its national legislature and embraced this EU-wide definition of ESS.

In practice, similar terms, such as digital services, digital products, and electronic services, are often used to describe these services.

Taxability Rules for ESS:

The EU VAT reform conducted in 2021 marks a significant milestone in the EU's efforts to regulate taxes in the digital economy. This groundbreaking reform introduced new rules and expanded and further defined existing ones.

EU VAT rules define the place of supply for B2B ESS, where the buyer is established. For B2C transactions regarding ESS, when foreign businesses provide services, the applicable VAT rate is that of the consumer’s country of residence.

The rules for a place of supply for distance selling goods and B2C ESS depend on whether the EUR 10,000 threshold is exceeded. Once the threshold is exceeded, VAT should be applied based on the so-called destination principle. The destination principle states that the VAT rate of the country where goods and services are dispatched is applied.

However, if the threshold is not exceeded, businesses have two options. The first option is to apply the VAT rate of their home country, e.g., the VAT rate Slovakia, or register for OSS and follow the place of supply rules under this system.

How much is VAT in Slovakia on ESS?

The Slovak VAT rate for ESS is 23%.

E-Commerce Rules

Apart from introducing the stated rules for ESS, the 2021 EU VAT package introduced the EU-wide EUR 150 threshold for importing low-valued goods from non-EU countries, the deemed supplier rules for platform operators, and the unified EUR 10,000 threshold.

Previously established Union and Non-Union Schemes were further expanded, and a new scheme was added so that the current OSS system contains three schemes:

• Union Scheme,

• Non-Union Scheme,

• Import Scheme.

VAT EU Reporting

Submission of EC Sales List and Intrastat is required under certain conditions in Slovakia.

EC Sales List

According to the VAT Slovakia law, all taxable persons are required to submit an EC Sales List (ESL) for their sales of goods and services to another EU-registered entity.

Like regular VAT returns, an ESL should be submitted electronically to the Tax Authority every month if the intra-community supplies exceed EUR 50,000. In situations where these supplies are below EUR 50,000 in the current and previous four months, quarterly ESLs are allowed.

Intrastat 

In addition to the ESL, taxable persons in Slovakia involved in intra-EU transactions should file an Intrastat report if their imports and exports of goods within the EU are EUR 1 million. Additional thresholds are set for the agricultural and food sectors. If the taxable person operating in these sectors exceeds EUR 400,000 or exports of goods within the EU, or EUR 200,000 or imports of goods within the EU, they must submit an Intrastat report.

Digital Reporting

Local Businesses

Control Statements or Ledger Statements are mandatory for all VAT-registered taxable persons. This statement provides details on all issued or received invoices during the VAT period, including invoice date and number, type of transaction, tax rate, total amount, VAT amount, and VAT number of other business entities involved.

These reports are filed electronically via the Tax Authority’s portal or the downloadable form-filling program called eDane, distributed by the Tax Authority. Control Statements are reported on a transaction-by-transaction basis, with an exemption for simplified invoices received, provided their total tax deductions do not exceed EUR 3,000. If these conditions are met, these simplified invoices are reported in aggregated form.

The report includes detailed information on all B2B, B2G, and B2C sales and purchases, as well as domestic and intra-community transactions. Invoices related to exports, zero-rated, and exempt supplies are not included in the Control Statements.

Regarding the implementation of mandatory e-invoicing, according to the available text of the Law, mandatory B2B e-invoicing will come into effect on January 1, 2027. Additionally, starting January 1, 2030, taxable persons will be required to report cross-border transactions through e-invoices, aligning with the ViDA package.

Non-Resident Businesses

The obligation to submit the VAT Control Statement also applies to all non-resident businesses registered in Slovakia for VAT under the same conditions as for local businesses.