The Ministry of Finance of the Slovak Republic has published a draft of the forthcoming amendment to Act No. 222/2004 Coll., on Value Added Tax, as amended (hereinafter referred to as the “VAT Act” or the “Amendment”). The subject of this draft amendment is, inter alia:
- The change in Section 53b introduces an obligation for the customer to make a correction of the deducted VAT on purchased goods or services, in the price of which VAT has been applied, unless the customer settles the obligation in part or in full within 100 days after its due date. This means that if the customer does not pay for the purchased goods or services within 100 days, the customer is obliged to correct the deducted VAT to the extent of the unpaid obligation in the tax period, in which 100 days have elapsed since its due date. The introduction of such an obligation is expected to increase the incentive for customers to pay outstanding debts, as non-payment will lead to an obligation to correct the deducted tax.
- Waiver of the obligation to register as a VAT payer after exceeding a turnover of EUR 49,790 if the taxable entity exclusively supplies goods or services that are exempt from VAT. The main aim of such a modification is to reduce the administrative burden. This is the case where the taxable entity carries out only exempt activities, such as the provision of financial or insurance services, or exempt property rental; in this case, VAT registration is no longer required once the turnover from these activities exceeds EUR 49,790. However, if such an entity wishes to register voluntarily, it may do so.
- Other changes aimed at reducing the administrative burden and eliminating some of the shortcomings of the act that have arisen from application in practice. These include, for example, a more detailed explanation of what constitutes a consignment of a small nature, the import of which is exempt from VAT, for the purposes of the VAT Act; the method for determining the amount of the correction of deducted tax on the theft of goods specified by the act; the abolition of the obligation to submit a zero tax return in the case of the first customer under a triangular trade scheme; a change of the time limit for payment of tax on the acquisition of a new means of transport from another EU Member State.
- With effect from 1 January 2024, a new record-keeping obligation is introduced for payment service providers through which payments for delivered goods or services are made – this change is primarily due to the transposition of the EU Council Directive, the main objective of which is to combat tax evasion arising from cross-border e-commerce, where situations arise when the customer is located in one EU Member State and the supplier of goods or services is located in another EU Member State, or in a third country, with the entire purchase being made in the online space. The absence of the customer’s information obligation in such transactions leads to insufficient and inaccurate information for national tax administrations and therefore often leads to a failure to declare tax liability. These records will subsequently be sent by each EU Member State to the central European payment system, where they will be checked.
The amendment to this VAT Act is proposed to take effect from 1 January 2023, except for the record-keeping obligation for selected payment service providers, which will take effect from 1 January 2024.