More Changes to the VAT Act to Come

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In the 2/2019 issue of our Newsletter, we informed you about planned changes to the VAT Act regarding rules for the taxation of trade between Member States on the basis of Council Directive (EU) No 2018/1910 of 4 December 2018 amending Council Directive No 2006/112/EC on VAT. These amendments have not yet been approved.

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.

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