Slovakia Considers Reverting Standard VAT Rate to 20% Amid Economic Pressure

February 2, 2025

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Last year, the government of Slovakia adopted amendments to the VAT Law that increased the standard VAT from 20% to 23%. A new reduced VAT rate of 19% was introduced for essential food and medicine, eliminating the existing 10% reduced VAT rate.

The new standard VAT rate came into effect on January 1, 2025. However, the Slovakian Parliament has already prepared new amendments to the VAT Law, which propose, among other things, returning to the previous standard VAT rate.

Impact of the Proposed Amendments to the VAT Law

The amendments to return the standard VAT rate to 20% were proposed after the anti-government protests and under the pressure of opposition lawmakers. With the new standard VAT rate in place, Slovakia has one of the highest VAT rates in the EU, whereas only a few EU countries have higher rates.

However, the VAT Law amendments propose more than just this change. They also suggest extending the 5% reduced VAT rate on specified products until July 2025 and increasing the VAT registration threshold to EUR 75,000.

If the amendments are approved and adopted, this will be the second change in the standard VAT rate and registration threshold in less than a year. However, the debate on whether these amendments should be approved is ongoing. Moreover, additional proposals might be made when deciding whether to implement new rules.

Conclusion

With political pressure rising and voices against the Prime Minister's policy becoming louder, some amendments that could bring financial relief for Slovak citizens and the economy are expected to be adopted.

Nevertheless, individuals and businesses affected by these potential changes should monitor the situation's development. If adopted, taxable persons must adjust their accounting and invoicing systems. Additionally, changing the VAT registration threshold could lead to many taxable persons applying for deregistration from the VAT system if they see this as the best option for their businesses.

Source: Parliamentary Press Release 664, Parliamentary Press Release 687, VATabout, AnswerConnect

Why did Slovakia increase its standard VAT rate to 23%?

Slovakia increased its standard VAT rate from 20% to 23% in 2025 as part of government amendments to the VAT Law, aiming to boost revenue and address economic challenges.

Is Slovakia planning to reduce the VAT rate back to 20%?

Yes, the Slovakian Parliament is considering amendments to revert the standard VAT rate to 20% following public protests and opposition pressure.

What are the other proposed changes to Slovakia’s VAT Law?

The proposed amendments include extending the 5% reduced VAT rate for specified products until July 2025 and increasing the VAT registration threshold to EUR 75,000.

How does Slovakia’s VAT rate compare to other EU countries?

At 23%, Slovakia currently has one of the highest VAT rates in the EU. If reduced to 20%, it would align more closely with the rates in many other member states.

How would a lower VAT rate impact businesses in Slovakia?

If the VAT rate returns to 20%, businesses may need to adjust their pricing, invoicing, and accounting systems while benefiting from potentially lower costs for consumers.

When will a final decision be made on Slovakia’s VAT amendments?

The debate is ongoing, and additional proposals may arise before a final decision is made. Businesses and taxpayers should closely monitor updates from Parliament.

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