VAT Guarantee for High-Risk Taxpayers in Slovakia: New Rules
The Ministry of Finance of the Slovak Republic has proposed an amendment to the VAT Act introducing stricter measures for taxpayers classified as high-risk entities.
The aim of this measure is to strengthen the prevention of VAT fraud and tax arrears.
Who is considered a high-risk taxpayer
The classification of a taxpayer as high-risk will be based on several criteria, including:
the existence of tax arrears,
the amount of outstanding liabilities,
other risk indicators assessed by the tax authority.
If a taxpayer meets these criteria, the tax authority may impose additional obligations.
Obligation to provide a VAT guarantee
The tax authority may require a taxpayer to provide a VAT guarantee:
upon VAT registration,
or within 12 months after registration.
This obligation may be imposed where there is a reasonable concern that the taxpayer may fail to pay future VAT liabilities.
Amount of the VAT guarantee
The amount of the VAT guarantee is expected to range between:
EUR 5,000 and EUR 500,000.
When determining the amount, the tax authority will consider:
the risk of future tax arrears,
the overall financial and compliance profile of the taxpayer.
Once paid, the guarantee may be used to offset future VAT underpayments.
Recovery and return of the guarantee
If the taxpayer fails to deposit the guarantee in the required amount:
the tax authority may recover the amount from the taxpayer, particularly in cases of mandatory VAT registration.
The VAT guarantee will be returned:
after 12 months,
provided that it has not been used to settle tax arrears,
and no additional procedures under the Tax Code have been applied.
Additional record-keeping obligations
As part of transitional measures, the tax authority may impose a record-keeping obligation on the taxpayer.
This obligation may:
apply for up to 12 calendar months,
require the taxpayer to maintain and submit specific documentation related to taxable transactions.
Failure to comply may result in significant penalties.
Penalties for non-compliance
If the taxpayer fails to meet the imposed obligations:
a penalty ranging from EUR 5,000 to EUR 50,000 may be imposed.
What this means for businesses
The reintroduction of the VAT guarantee represents a significant tightening of the regulatory framework.
Businesses should:
assess their risk profile,
ensure timely fulfilment of tax obligations,
prepare for potential additional compliance requirements.
Early preparation can help mitigate financial and administrative risks.
