The Government´s amendment to the VAT Act was submitted to the National Council of the Slovak Republic on 28 August 2020. The purpose of this amendment is, in particular, to transpose some articles of the Council (EU) directives, which should fundamentally change the application of VAT in electronic trading in goods from 1 January 2021 and introduce the possibility of correcting the tax base and related VAT in the case of unpaid receivables, which has not been possible so far in the Slovak Republic as one of the few EU Member States.
The amendment proposes, in particular, the following changes to the VAT Act:
- redefining mail order business and adjusting the rules for determining the place of delivery for distance selling of goods within the EU, but also for goods imported from third territories or third countries – the Member State in which the shipping or transport of goods to the customer ends;
- abolition of the tax exemption in case of imports of consignments the value of which does not exceed EUR 22, as this exemption distorted economic competition between suppliers established inside and outside the EU;
- extension of the existing voluntary special arrangement, the so-called Mini One Stop Shop (MOSS), which currently only applies to digital services (telecommunications services, radio and television broadcasting services and electronic services), to other services provided by a taxable person not established in the EU to other than taxable persons established in some EU Member States, the place of delivery of which is in the given Member State of consumption;
- extension of the existing voluntary special arrangement MOSS for digital services supplied by taxable persons, which are established in the EU territory but not established in the Member State of consumption, to other services provided by this taxable person, as well as to the distance selling of goods within the EU, and certain domestic supplies of goods – extension of the system to a single point of contact, the so-called One Stop Shop (OSS);
- introduction of a new voluntary special arrangement in the case of the distance selling of goods which is imported from a third country, the value of which does not exceed EUR 150 and, at the same time, is not subject to excise duty – this new arrangement will allow taxable persons to meet their tax return and tax payment obligations in only one Member State, the so-called Member State of identification;
- introduction of the possibility of correcting the tax base on the supply of goods or services if the taxable person, the supplier, has not been paid and its claim has become uncollectible. At the same time, it is proposed to impose an obligation on the customer who has not paid for the supply of goods or services, to correct the deducted tax.
The act is proposed to take effect from 1 January 2021, except for the provisions which are directly transposed the articles of the Council Directive (EU) 2017/2455 as amended and the Council Directive (EU) 2019/1995 as amended, which are proposed with regard to Decision of the Council EU 2020/1109 to take effect from 1 July 2021.