Background
Slovenian VAT rules and requirements for short-term rental accommodation are to be found in the VAT Act and in the Guidelines/Tax Authorities Brochure specifically issued concerning this subject under the title “Short-term rental hosts – section Individuals”.
Following the place of supply rules for B2B services, where the provider of the services is a non-resident, and the service recipient is a Slovenian resident(legal person or natural person), the place of supply is the Member State in which the recipient is residing.
Under these terms, the place of supply is Slovenia, and for B2B transactions the reverse-charge mechanism applies. To accommodate accounting rules with clarity for the B2B services provided by the advertising digital platforms or intermediaries in the short-term rental accommodation sector(like Booking or Airbnb), the Slovenian Tax Authorities issued clear VAT and accounting guidelines.
For these transactions, the local recipient of the advertising or intermediary services provided by the platform is mandated to register for VAT to be able to report and remit VAT paid on the booking services. If the service recipient is below the mandatory threshold, it is still obliged to register for VAT and to report only these transactions, while maintaining the sales income below the VAT threshold.
If its VAT registration is merely to report these transactions and remit owed VAT, in most of the cases it doesn’t have an input tax deduction right on the purchasing invoices, since its registration is only for this reason.
Advertising or booking facilitation services are taxable services under the Slovenia VAT Act, and as such, for B2B transactions should be reported by a local person.
Latest Updates from Digital Platforms
A few digital platform operators have recently sent a notification to Slovenia-based hosts of short-term rental accommodation, informing them that in the case that the local host lacks VAT registration, the platform shall include VAT on its commissions, and the host shall be responsible for the payment of it.
More than a few hosts have formally sent requests to the central tax authority(Financial Administration) to explain under what rules and requirements these platforms could demand such a reimbursement, and who is responsible for VAT collection and remittance for the advertising or intermediation services.
The Financial Administration explained that the rules that govern short-term rental accommodation via online platforms have been the same for more than a few years; nothing actually changed, and its responsibility of the host to register for VAT and report VAT on these transactions on a self-assessment basis.
Local Hosts and VAT Framework
Under the specifically designated framework for domestic landlords(hosts of the short-term rentals via booking platforms) if a private lodging providers is identified for VAT purposes solely as a recipient of intermediary services under the first paragraph of Article 25 of the VAT Act, they are accountable to self-asses VAT on the intermediary services received if those services are provided by a taxpayer who does not apply the cross-border VAT exemption in Slovenia(EU SME scheme); however, for other supplies what thay make as a small taxpayer, they aren’t obliged to charge and collect VAT.
As a service recipient for B2B intermediary services, they are accountable for charging, collecting, and remitting 22% VAT on these services provided by the non-resident booking platforms.