Proposed changes to the VAT law in Slovakia – Part 1

An amendment to the VAT Act is currently being prepared in Slovakia. The amendment brings several important changes for VAT registered taxpayers. Comments on the draft amendment to the law are currently being evaluated.

The main aim of the amendment is to integrate special regulations for small companies into the previous directive on the common system of VAT.

Individual provisions of the amendment provide for different validity dates from March 31, 2024, July 1, 2024 to January 1, 2025.

Below we list the first part of the most important VAT changes that the amendment is intended to regulate. We will inform you about further changes in the following article.

Special treatment for small businesses

Following the implementation of the Small Business Directive, the amendment introduces a new system of sales VAT tax exemption for domestic and foreign small businesses from January 1, 2025. The aim of the change is to reduce the administrative burden on small businesses and to unify the treatment for exemption from economic activity in Slovakia for both domestic and foreign persons.

In this context, the amendment introduces an annual domestic turnover of 50,000 euros and an annual turnover in the EU of 100,000 euros. Domestic VAT registered taxpayers who do not reach the turnover established in Slovakia and the turnover established in other Member States can provide goods and services in other Member States exempt from tax without having to register in those Member States. For these purposes, small businesses are assigned a special VAT identification number with the prefix EX. The same regulation applies domestically to foreign VAT taxpayers who do not achieve the specified turnover in the EU and at the same time the specified turnover in Slovakia.

Registration of domestic persons for VAT

The amendment introduces changes to the VAT registration of domestic entrepreneurs for taxpayers.

It is proposed to change the period for which turnover is calculated within the framework of mandatory VAT registration to calendar year and to round the turnover value to the amount of 50,000 euros.

The deadline for submitting a VAT registration application is reduced to 5 days. A taxpayer becomes a registered person subject to VAT from the day on which the fact that made him a taxpayer occurs (previously based on a decision of the tax authority).

The conditions for voluntary VAT registration remain unchanged.

The effectiveness of individual provisions is expected to come into force from July 1, 2024, with the exception of the change in the sales amount, which is expected to only come into force from January 1, 2025.

Registration of foreign persons for VAT

In addition, with effect from July 1, 2024, the provisions of the VAT registration requirement for foreign persons will be changed. A foreign person now becomes a taxable person by carrying out a taxable transaction subject to VAT and for which he must register (previously on the basis of a decision from the tax authority). In addition, a foreigner is not obliged to submit an application for registration before starting to carry out such activity, but, according to the new law, must submit it only afterwards and immediately from the day on which he became a payer.

Reverse charge procedure when importing goods

The amendment to the law also proposes to establish the conditions and rules for the application of the reverse charge procedure when importing goods from third countries into Slovakia so that this institute can be applied from July 1, 2024.

The essence of self-taxation when importing goods is that VAT is not collected by the customs office, but the taxpayer calculates it himself, includes it in the VAT return for the assessment period in which the tax liability arose, and at the same time can the law to deduct input tax in the same sales tax return. In practice, this procedure will eliminate the obligation to pay import taxes for selected companies.

However, certain requirements should apply for the application of self-taxation. Above all, the entrepreneur (or the declarant acting as an indirect representative) must be a registered VAT payer and must have the actual status of an authorized economic entity in Slovakia in accordance with customs regulations.


Ondřej Hrubý

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