Slovakia: VAT Update 2020

13. January 2020

TPA News Finance Business Tax Update

Changes in VAT 2020 in Slovakia

Amendments to the VAT Act approved – adjustments to chain supplies, call-off stock, 10% VAT reduction on selected goods and other changes. All these changes come into force on 1 January 2020.

At the end of November 2019, it was announced in Collection of Laws an amendment to Act No. 222/2004 Coll., on value added tax. In this part of the Newsletter, we provide you with a brief overview of the most important changes that were approved in 2019.

In connection with the harmonisation and simplification of some selected taxation rules for trade between member states arising from Directive (EU) No. 2018/1910 of 4 December 2018, amending Directive (EU) No. 2006/112/EC on VAT, the following modifications were approved (i.e. quick fixes):

  • simplification of cross-border goods trade within the so-called call-off stock regime, when, subject to certain conditions, transporting goods to another member state shall not be regarded as the transfer of goods to another member state;
  • determining the place of goods supply with transport, carried out by a so-called intermediary entity, or on behalf of such intermediary entity, in so-called chain supplies within the EU;
  • the supply of goods exemption to another member state will be subject to notifying the goods acquirer‘s VAT ID to the supplier (substantive condition for the application of the exemption), and submission of a EC Sales List with the accurate, true and complete information on the supply of goods to another member state by the supplier for the relevant period.

In addition to amending the taxation of trade between member states, the following changes were also approved:

  • VAT exemption for transactions relating to crude oil and mineral oil listed in Annex No. 9 to the VAT Act, provided that those are delivered to customs warehouses, special warehouses or tax warehouses;
  • new rules for adjustment of deductions from services performed on investment property;
  • new determination of the tax base for the free supply of goods with a cost equal to or less than EUR 1,700;
  • amendment to the provision on the correction of the tax base on the sale of tourism services;
  • extension of the tax reduction to 10% on newspapers, magazines and periodicals, and selected types of food.

Slovakia: VAT Return from 1. January 2020

The interdepartmental comment procedure currently includes a draft measure from the Ministry of Finance of the Slovak Republic that establishes a specimen VAT return form and a specimen EC Sales List.

The specimen VAT return form has been adjusted to reflect amendments to the VAT Act in relation to a new exemption for transactions relating to crude oil and mineral oils. Meanwhile, the specimen EC Sales List reflects amendments to the VAT Act ensuing from an adjustment to the call-off stock system due to the adoption of Council Directive (EU) 2018/1910.

More important VAT changes in Slovakia

Since Slovakia is also obliged comply with both the VAT Act and Council Directive (EU) 2017/2455 of 5 December 2017 amending Directive 2006/112/EC and Directive 2009/132/EC, additional changes await the process of amending the VAT Act from 1 January 2020.

This amendment is intended to define the distance selling of goods both within the EU and imported from third territories or third countries (the VAT Act currently uses the term ‘distance selling’ for such goods). In accordance with the newly proposed regulations, the place in which goods for distance selling are supplied will be, in principle, the Member State in which the dispatch or transport of the goods to the customer ends. At the same time, a proposal has been made to extend voluntary special adjustments to the application of the tax on digital services in accordance with Sections 68a and 68b of the VAT Act. Another proposal suggests to cancel the exemption on imports of consignments with values not exceeding €22, because such an exemption distorts competition between EU and non-EU suppliers. Still another change would impact the distance selling of goods imported from third territories or third countries. For consignments which are not subject to excise duty and whose intrinsic value does not exceed €150, a new voluntary special arrangement for tax compliance is proposed in one Member State only, the so-called Member State of identification. The anticipated deadline for comments on these proposals is March 2020.

If you have questions about the current VAT in Slovakia, do not hesitate to contact our tax expert in Slovakia

 

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