EU VAT GUIDE – Slovakia

How much is VAT in Slovakia? 

The Standard VAT Rate (Daň z pridanej hodnoty (DPH)) in Slovakia is 20%. 

Some supplies are exempt from VAT. This applies to business activities like education, health care, insurance, and banking services.

The exact list of taxable transactions and allocated Slovakia VAT rate can be found in VAT Slovakia regulations. 

VAT thresholds in Slovakia 

Valuable information about the VAT threshold in Slovakia and applicable provisions can be found in the VAT legislation. Also, a helpful source of information is an interpretation of the appropriate information shared by Tax Authority officials. 

VAT registration threshold for resident businesses: Threshold of EUR 49,790 for the period of 12 consecutive months.

VAT registration threshold for non-resident businesses: No registration threshold.

VAT registration threshold for intra-EU distance sales of goods and B2C supplies of services: EU-wide harmonized threshold of EUR 10,000.

VAT registration threshold for non-EU established suppliers of Electronically Supplied Services: No registration threshold.

VAT Taxable Activities in Slovakia

A taxable person by Slovakia VAT Law is a legal person or individual who carries out economic activity independently, whatever the purpose or results. 

Types of taxable activities that trigger the imposition of Slovakia VAT: 

• The supply of goods and rendering of services in Slovakia for consideration;
• Receipt of reverse-charge services by a taxable person in Slovakia;
• Export of goods;
• Import of goods.

Other case scenarios exist where domestic or foreign businesses should impose Slovakia VAT on their transactions. 

Tax Representative in Slovakia 

For non-EU-established businesses, having a tax representative for all VAT compliance-related activities is often mandatory. Tax persons with tax residence in third countries or territories with mutual assistance agreements signed with Slovakia can fulfill their tax obligations without the mandatory requirement to contract a tax representative. 

For EU-established companies, having a tax intermediary isn’t compulsory. Still, the economic operator could acquire the professional to ease up and streamline compliance challenges for its operations in the country. 

VAT on Electronically Supplied Services in Slovakia 

Electronically Supplied Services 

Under the EU VAT Directive 2006/112/EC framework, Electronically Supplied Services (ESS) are defined as services delivered via the Internet or other digital networks. This category of services is firmly connected by its automation, with minimal or no human intervention. 

Without such technological advancements, the efficient and uninterrupted offering of these services would be considerably challenged.

In line with the EU VAT Directive and Implementing Regulation, Slovakia has embraced this uniform definition of ESS, ensuring consistency in the treatment and taxation of digital services across the member states. 

The existence and global use of terms such as “digital services,” “digital products,” and “electronic services” often pave the way for ambiguity and inconsistency with the manner in which these types of services should be treated from the tax and legal perspective. 

Taxability Rules for ESS

The introduction of the E-commerce regulatory package in July 2021 was a prominent, expected step due to the evolving demands of the digital economy.  These amendments were essential to aligning the tax provisions with emerging business models and taxation scenarios.

This move has undoubtedly clarified the taxability rules, reduced compliance costs for taxable persons and tax authorities, and made things easier for all participants.  

The aim was to strengthen the uniformity and transparency of tax practices.

Key VAT Provisions from the E-Commerce Package:

B2B Transactions Involving Electronically Supplied Services – Determining the supply’s location adheres to established standard rules, practically meaning that if the purchaser is a taxable person, the place of supply will be where the buyer is established.

B2C Transactions Involving Electronically Supplied Services—Foreign taxable persons should apply VAT rates according to EU-wide harmonized regulations, which dictate that the VAT rate corresponds to the consumer’s country of residence. This ensures fairness and consistency in taxation across Member States.

Place of Supply Rules for Distance Selling of Goods and B2C Electronically Supplied Services—The EU-based suppliers whose yearly revenue does not exceed EUR 10,000 can choose what VAT rules will be used to determine the place of supply.
They can choose the VAT rules of the home country or adhere to the OSS scheme and follow EU-wide rules when determining the place of the supply.

Place of Supply Rules for Distance Selling of Goods and B2C Electronically Supplied Services– When a supplier’s annual sales surpass the EUR 10,000 mark, VAT must be applied based on the destination principle – that is, the VAT rate of the country where the goods are sent or where the service recipient resides. This approach aligns with the principle of taxing consumption where it occurs, ensuring equitable distribution of tax revenues across the EU.

This uniformity in VAT regulations simplifies the compliance process for businesses operating within the European Union and extends its benefits to international entities engaging with the EU market. 

How much is VAT in Slovakia for Electronically Supplied Services?

VAT rate Slovakia: A standard VAT rate of 20% is applied in most cases on sales of Electronically Supplied Services in Slovakia

E-Commerce VAT Rules in Slovakia 

On July 1, 2021, the European Union adopted important updates to EU VAT Directive VAT regulation to meet the evolving digital economy’s needs. This reform was projected to ease the VAT compliance challenges for cross-border taxable persons.

Relevant Features of the 2021 E-Commerce VAT Reforms:

• Cross-Border Sales of Low-Value Goods: The introduction of the EU-wide threshold for imports of low-value goods from third countries or third territories and the related possibility to report tax liabilities under the simplified scheme. 
• Intra-Community Distance Sales: The reforms have eliminated the previously established threshold for intra-community distance sales of goods. These thresholds have been defined per national rules, further complicating the transfer of goods’ supply. 
• Domestic Sales by Deemed Suppliers: In certain cases, digital platform operators will be the responsible taxable persons for VAT. 
• Provision of B2C Services: The scope of provision of services that could be reported under the OSS schemes has been drastically broadened. This expansion simplifies VAT reporting for businesses providing digital services across the EU, fostering a more streamlined approach to VAT compliance and reducing administrative burdens.

These adjustments reflect the EU’s commitment to simplifying VAT compliance, reducing business operational hurdles, and enhancing transparency and fairness in the digital single market.

E-Commerce VAT Simplification:

Besides the abovementioned changes introduced through the E-commerce reform in 2021, this legislative move led to a significant reassessment of the concept of OSS schemes, which has allowed for the introduction of the new simplified reporting scheme -Import One Stop Shop(IOSS).

This enhancement of VAT special schemes, with the IOSS as a notable addition, marks a critical advancement in the EU’s approach to e-commerce taxation.

The E-Commerce VAT package made the following special schemes available:

• Union One-Stop-Shop Scheme;

• Non-Union One-Stop-Scheme;

• Import One-Stop-Shop Scheme.

Overview of EU VAT Special Schemes

Non-Union Scheme can be leveraged by:

This simplified reporting scheme is designed for taxable persons outside the EU. It permits non-EU sellers to report a broad scope of various B2C cross-border supplies of services, where the purchaser is the end customer.

Union Scheme can be leveraged by:

• EU-based businesses: Taxable entities that are residents in one of the Member States can take advantage of this scheme if they provide B2C services or engage in intra-community distance sales of goods. An important condition that cannot be overlooked is that domestic supplies, i.e., where the customer is a resident of the same MS, cannot be reported under this scheme. 
• Non-EU Based Businesses on Intra-Community Sales: Businesses not based in the EU are also eligible to use the Union Scheme specifically for intra-community distance sales of goods.
• Digital Marketplaces: Whether based in the EU or not, digital marketplaces facilitating intra-community distance sales of goods and for certain domestic supplies can leverage the Union Scheme. 

Import Scheme can be leveraged by:

The IOSS scheme can be used by a large number of taxable persons. Taxable persons whose place of business is within the EU or outside the Union. The scope of taxpayers who can benefit from this scheme also covers digital marketplaces in some situations. 

OSS Return and Payment 

The Slovakia VAT rules don’t provide a simplified registration and reporting system tailored specifically to meet the liability concerns of taxable persons providing digital services to customers residing in Slovakia. However, non-resident businesses can leverage the OSS schemes as an electronic reporting tool, which means they will not be obliged to register for SVK VAT. 

The development and introduction of the EU-wide OSS schemes will ease compliance challenges for many cross-border businesses with customers residing in Slovakia. Before implementing the E-commerce package, many companies that provide services or goods to customers residing in Slovakia would have to be registered locally.

When the situation doesn’t permit foreign merchants to report their transactions through OSS schemes, the taxable person in question should be aware of domestic regulations and operate under the rules of national legislation. 

Electronic Platform and Deemed Supplier Rules 

Slovakia has incorporated into its national frameworks the amendments of the EU VAT Directive regarding the E-commerce reform from 2021. This legislative enhancement permitted cross-border operating taxable persons to reduce costs associated with compliance and bureaucratic procedures.

Adopting this directive brings into play the concept of the “deemed supplier,” significantly streamlining the tax process for specific online transactions. According to the EU VAT Directive, a digital marketplace operator can be classified as a “deemed supplier” in two distinct situations:

• When goods valued at EUR 150 or less are imported from outside the EU, and when the original suppliers sell directly to EU customers using the intermediary services of the digital marketplace;
• When goods in free circulation within the EU are offered by vendors whose residence is outside the EU to customers based in the Member States through the usage of the facilitation services of the digital platform. 

This approach simplifies tax obligations for digital marketplace transactions, aligning Slovakia’s VAT practices with EU standards and supporting a more unified digital market environment.

These provisions ensure a more straightforward VAT process for digital marketplaces and their transactions within the EU.

This adoption reflects Slovakia’s dedication to adhering to EU VAT standards, aiming to improve the transparency and uniformity of tax regulations applicable to digital sales. Consequently, this adjustment introduces new obligations for deemed suppliers, significantly altering the VAT implications of this sales model.

This regulatory framework introduces additional responsibilities for deemed suppliers, vastly changing this sales model’s VAT obligations for taxable entities. In this multi-sided business model, we have two separate transactions: 

1. The initial supply from the original vendor to the digital platform is recognized as a business-to-business (B2B) transaction.
2. The subsequent supply from the platform to the final consumer is classified as a business-to-consumer (B2C) transaction.

This ensures compliance and facilitates smoother operations under the simplified tax framework provided by the EU.

Invoice Requirements in Slovakia 

General invoice information:

• Date of invoice issuance;
• Date of the supply of goods or provision of services;
• Unique invoice number issued in sequence.

Seller information:

• Company name;
• Full address(head office);
• Billing address if different from company address;
•  VAT number.

Customer information:

• Name;
• Full address;
• VAT number;
• Delivery address;
• The billing address is different from the delivery address.

Fiscal Information:

• Description and breakdown of the goods or services – quantity, discounts, unit price excl. VAT;
• Net amount;
• The VAT rate(s) applied and the breakdown of VAT per rate;
• Invoice Total.

Additional information required in particular cases:

• Exemption reference – guaranteed by precise norm;
• Reverse charge – term if applicable;
• Self-billing – term if applicable;
• Tax Representative information for non-resident business.

Foreign Currency Invoice in Slovakia  

In Slovakia, it’s permissible to issue tax invoices in foreign currencies, but the VAT amount on the invoice must be shown in local currency.

VAT Return in Slovakia 

Domestic returns

Domestic taxpayers and non-established foreign businesses who conduct business under the national VAT Slovakia rules should submit monthly declarations. 

Penalties for late reporting and omitted declarations 

Taxpayers should charge Slovakia VAT on their transactions when the responsibility rises and submit the VAT return. If they do the return fillings after the deadline, they can expect to allocate more funds than they would if they had filled the return within the permitted time frame. 

In the case of the late filing of VAT returns and payments, the Slovakian Tax Authorities enforce the following penalties:

• If the taxable person doesn’t submit the return in the prescribed time – a fine from EUR 30 to 16,000;
• If the taxable person doesn’t submit the return after getting the notice – a fine from EUR 30 to 16,000;
• If the taxable person fails to submit the registration declaration in the prescribed period, a fine from EUR 60 to 20,000.

Need assistance with VAT in Slovakia?
We can help!

Dedicated account manager

As our client, you will be assigned to a multilingual account manager who can address all your tax-related inquiries and resolve any issues you may have at any time.

Single point of contact

We serve as single point of contact, simplifying the process and ensuring that your VAT compliance is handled efficiently and effectively within single stop.

Exclusive customer service

We support our clients, ensure fast response time and always go beyond by offering tailored assistance and individual attention.

Certified experts

Our team is combined of more than 30 experts, who can provide wide range of services and are certified members of IVA, AITC and VAT Forum. Currently we have more than 500 clients and knowledge how VAT works in 100 locations.