Slovakia VAT Registration Changes for Small Businesses

The National Council of the Slovak Republic published a draft law proposing to amend the VAT law to simplify VAT compliance for small businesses by significantly increasing the threshold for mandatory VAT registration. Moreover, the proposal aims to set a single mandatory VAT registration threshold and replace the currently set lower thresholds.

The Impact of an Increase in VAT Registration Threshold

Under the proposed draft law, the mandatory VAT registration would increase from the current EUR 50,000 and EUR 62,500, depending on the type of business, to EUR 83,000. If adopted, the decision to increase the VAT registration threshold effective July 1, 2026, would have several significant impacts on taxable persons operating in Slovakia.

Firstly, fewer small businesses will be required to register for VAT. Secondly, many small businesses that are VAT-registered will fall outside the VAT system, reducing their administrative burden and compliance costs. Moreover, the proposed amendments state that VAT-registered businesses whose turnover remains below the new EUR 83,000 threshold may apply to deregister, effectively exiting the VAT system.

As set out in the draft legislation, once taxable persons apply for deregistration and meet the conditions, the Tax Authority will quickly determine the effective date of deregistration. After the date is determined, the taxable persons lose their VAT payer status and must return their VAT registration certificate within ten days. Notably, in their final VAT returns, deregistered taxable persons will no longer be entitled to input VAT deductions, except in limited cases related to assets that were supplied while they were still a VAT payer.

Also, the new rules clarify how pending registration applications will be handled. If a taxable person applies for VAT registration before June 30, 2026, due to exceeding the current lower threshold, but does not exceed the EUR 83,000 threshold, the application will be disregarded unless they actively choose to proceed. In case a taxable person wants to register for VAT, they have to notify the Tax Authority by July 15, 2026, and their application will be treated as an optional registration request.

Conclusion

The proposal to increase the VAT registration threshold is clearly aimed at supporting smaller businesses by allowing them to operate without the complexity of VAT obligations unless they reach a higher level of economic activity. In addition to clearly setting registration and deregistration rules under the new threshold, the draft law also introduces a form of relief for past non-compliance.

Source: National Council of the Slovak Republic