Slovakia VAT Guide

Introduction

EU-wide VAT legislation was introduced to harmonize the VAT principles of all EU Member States and remove conflicts. Consequently, most Slovakia VAT rules correlate with EU VAT Directive 2006/112/EC.

Should you collect VAT in Slovakia?

You must collect the Slovakia VAT in Slovakia if your business is engaged in the following types of activities:

1. Supply of Goods: Supply of goods means transferring the right to dispose of a tangible property as owner.
2. Intra-EU acquisition: Acquiring or purchasing goods within Slovakia from another EU Member State as a VAT-registered person (typically known as the Reverse Charge Mechanism).
3. Supply of Services: Supply of services covers any transaction not covered in the supply of goods.
4. Import of Goods: Any transaction that imports goods from a non-EU state to an EU Member State.

To learn more, it is recommended that you visit the VAT Act of Slovakia (Section 2). On top of that, because the VAT laws of most EU Member States are harmonized with the overall EU VAT law (i.e., Directive 2006/112/EC) and also of Slovakia, you can refer to Articles 14-30 of the EU tax directive for detailed information on taxable transactions.

When should you register for VAT in Slovakia?

Normally, the value-added tax is destination-based (owing to place of supply rules – discussed separately in the One Stop Shop article), requiring every person (whether registered anywhere or not) to register for VAT when making any taxable sales in Slovakia. VAT registration in Slovakia is necessary for the following types of transactions:

• Supply of Goods or Services in Slovakia to non-taxable persons: Sellers must register in Slovakia and pay VAT only if they have not opted for One Stop Shop (see Notes 1 and 2 below).
• Supply of Services in Slovakia to a taxable person: The recipient of services must register and pay VAT in the country if the supplier is not established in Slovakia (under Article 196 of the EU VAT Directive (pg.39)).
• B2B Acquisition of Goods: Where the goods are sold by a taxable person from any EU Country to a taxable person in Slovakia, the buyer should register for Slovakia VAT (reverse charge basis under Article 197 of EU VAT Directive (pg. 39)).
• Import of Goods in Slovakia: The importer must pay and register for VAT (if not covered in the Import One Stop Shop–see our OSS article for details).
• Export of Goods/ Services: Exporting goods/ services to non-EU countries would require a VAT number.

Important Note 1: If you supply goods from other EU Member States to Slovakia, you would be required to attain registration for Slovakia VAT only if your total annual sales (goods/ services) in the EU are more than EUR 10,000; in contrast, they should be taxed in the supplier’s member state owing to the EU-wide VAT threshold specified for TBE services and distance sale of goods. Refer to our EU One Stop Shop Article for more details, which contains information about the EU-wide VAT threshold and distance sale of goods.

Important Note 2: When you opt for EU One Stop Shop registration, you are exempted from separate registration for Slovakia VAT. One Stop Shop applies to the B2C sales made by taxable persons from other EU countries to Slovakia of over EUR 10,000 and the import of goods in Slovakia below EUR 150. Visit our EU One Stop Shop article for more details.

“Example 1: Company A, a Spain-based company, sells goods to a non-taxable buyer B in Slovakia. Company A’s total annual sales exceed EUR 10,000 in the EU, excluding sales in Slovakia.

Company A must either register for Slovakia VAT (if it does not opt to register for One Stop Shop) or the One Stop Shop.”

Slovakia VAT Threshold Summary

To read the official guidance, visit the Section 4 of Slovak VAT law.

How can you Register for VAT in Slovakia?

To register for VAT in Slovakia, you can apply online. The application can be processed in a couple of weeks. The following details must accompany the VAT application:

• Name, address, and nature of business.
• Details of Offices/ facilities including branches, warehouse, etc.
• Bank Account details.
• If a Company is registered elsewhere (or in another EU Member State), the tax office and VAT number under which the Company is registered must be provided.
• Articles of Association.
• Certificate of Incorporation.
• VAT Certificate.
• Power of Attorney when appointing a fiscal representative in Slovakia.

Please visit the official website of the Slovakia Tax Authority for additional information about registration in Slovakia. The registration process may sometimes involve cumbersome formalities, so you can use TaxDo’s streamlined software without going anywhere else. Just fill out the required information on our software, and we will do the rest.

How should you collect and calculate VAT in Slovakia?

VAT is generally charged on a destination-based principle (see the place of supply rules described in the OSS Article), which includes all taxable transactions (described earlier in this article) except those that are otherwise exempt; thus, the VAT Rate is applied to any sales made to Slovakia.

VAT Rates

You must charge the VAT Rate of 20%, other than the products/ services you are supplying that are covered under the reduced rates of 10% and 5%. Below is an illustrative list of items covered under the reduced VAT Rate:

For a complete list of reduced-rate goods/ services, refer to the Slovak VAT Act (Section 27). Alternatively, the VAT rates in Slovakia are available on the EU Commission website.

Certain conditions may apply to the reduced rates, where things get trickier. TaxDo is here for you! Our experts are well-equipped with VAT laws and will resolve all your concerns.

Below is the simple formula you can use to calculate your VAT collection on each merchandise/ service sold:

VAT collectible = Sale value * (Standard Rate or reduced Rate as may be applicable)

Digital Products/ Services

Digital Products are those stored, used, or delivered in electronic format or any such form. You must charge Slovakia VAT for such digital products since Slovakia’s VAT laws align with EU VAT rules.

The digital products include the following:

• E-books, images, newspapers, movies, periodicals, videos, etc.
• Software-as-a-Service (SaaS), Platform-as-a-Services (PaaS) or Infrastructure-as-a-Service (IaaS).
• Online ads and affiliate marketing.
• Websites, site hosting services, and internet service providers.

VAT Exemptions

The legislation provides certain exemptions from the VAT, such as:

• Agricultural products.
• Human tissues and organs, mother’s milk, human blood, and other blood fractions.
• Stamps are currently tender at a regular selling price.
• Investment gold.
• The National Bank imported gold.
• Natural gas is imported through a natural gas distribution system.
• Electricity.
• Coffins, urns, and ornamental funerary articles.
• Supply of goods to an entrepreneur for his business (B2B).
• Exports.

Please visit the VAT Act to see what exemptions are covered.

B2B and Reverse Charge Mechanism in Slovakia?

Suppose you are a taxable person from another EU Member State and sell the goods/ services to a VAT-registered person in Slovakia. In that case, the transaction is considered a B2B Intra-Community supply, and you are not required to charge the VAT on an invoice raised to the buyer. On the other side of the pond, the Slovak buyer will account for VAT on the intra-community acquisition (under the reverse charge mechanism). The buyer will calculate the input VAT on purchase from another state in the VAT return and show the output VAT for the same amount, allowing him to adjust the tax liability, resulting in a zero VAT payment. Reverse charge is applied under Articles 196 & 197 of the EU VAT Directive.

Likewise, suppose you maintain a warehouse in Slovakia from another EU Member State and transfer the goods. In that case, you will need a VAT number in Slovakia, and you should account for Slovakia’s VAT as an intra-community acquisition under the reverse charge. When filing the return in Slovakia, he will show the deemed purchase (input VAT) and deemed sale (output VAT), leading to zero tax.

“Example 2: Company A in France sells goods in Europe. For this purpose, it has set up a warehouse in Slovakia. It transfers the goods from France to Slovakia Warehouse and sells them in Slovakia.

Company A must register and account for Slovakia VAT on the stock transfer (considered an Intra-community B2B acquisition). While filing the VAT return in Slovakia, Company A will show the input VAT on the intra-community acquisition and report the output VAT for the same amount. This way, the VAT liability would become zero on the stock transfer. Later, Company A must charge and pay Slovakia VAT for goods sold to consumers in Slovakia.

Should you appoint a fiscal representative in Slovakia?

Appointing a fiscal representative is mandatory when you do not have an establishment, registered office, or branch office in the EU and carry out any VAT-exempted or taxable transaction in the country. However, it is optional for businesses based in another EU Member State.

The appointed fiscal representative shall require a power of attorney from the taxable person registered in another EU Member State.  

Fiscal representative appointment and carrying out the transaction may be complex, as any defaults can attract heavy fines and penalties. TaxDo can help you by appointing a fiscal representative and handling all the duties, as we work with leading tax partners in Europe, so we can find it easily.

To learn more about fiscal representatives, visit the official Slovak VAT law (Section 69a).

How should you file VAT in Slovakia?

The VAT declaration frequency in Portugal is as follows:

*In case of new registration, you can file quarterly only if 12 calendar months lapsed since the VAT registration.

For more information, refer to the Slovakia Official Website.

Filing dates are sometimes extended in exceptional circumstances through a notification by the Slovak tax authority.

Note: If your tax due date is a holiday or weekend, the next business day would be considered the final due date.

You can file the VAT return in Slovakia through the online portal or using TaxDo’s specialized software, which seamlessly files, calculates, and reports your taxes. Additionally, if you are selling to other EU Member States and opted for One-Stop-Shop, you must file an OSS return. Refer to our OSS article for further details.

Are there any fines or penalties for default when filing or paying VAT?

The legislation levies a penalty of up to EUR 16,000 for late submission of a VAT return. Interest for non-payment of VAT is levied at the rate that is four times of of the base rate of the European Central Bank per annum (and be no less than 15%).

However, assigning your tax burden to TaxDo would not result in you paying any penalty or interest. We will adhere to the due dates. Please review the guidelines Slovakia issued for penalties and interest.

VAT Invoice in Slovakia

A VAT invoice is a testament to how much VAT is charged and collected and evidence of the B2B/B2C supply basis for applying the other rules. Accordingly, the Slovakia VAT invoice must include the following information:

• Business Name and Address of buyer and seller.
• Business VAT number issued to the supplier.
• Date of issue.
• Quantity and type (customary trade name) of the goods supplied or the scope and nature of the other service.
• Time of delivery or other service.
• The applicable VAT rate and the amount of tax are attributable to the consideration.

For more details, refer to the VAT Act (Section 74).

Important Note 3: For any sales made to a country outside Slovakia, you must convert the amounts to your official currency. For this purpose, you can use the European Central Bank’s official exchange Rates.

Keeping Records: You must keep the VAT records for at least ten years under Article 369 of the EU VAT Directive.

Special VAT territory in Slovakia – Services originating in or provided to the Principality of Monaco are construed to be services originating in or intended for France. Similarly, the services originating in or intended for the Isle of Man are construed as the services originating in the United Kingdom of Great Britain and Northern Ireland or intended for the United Kingdom of Great Britain and Northern Ireland.