New tools to combat VAT fraud in cross-border e-commerce

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The Ministry of Finance of the Slovak Republic has published preliminary information on the prepared amendment to Act No. 222/2004 Coll. on value added tax, as amended (the “VAT Act”).  

The amendment shall primarily transpose the EU Council Directive, as a result of which new obligations for selected payment service providers will be introduced with effect from 1 January 2024. The aim of this amendment is to introduce harmonised rules that shall serve to combat the tax fraud in the area of cross-border electronic commerce, as well as to verify the accuracy of the amount of declared tax.

Obligations of selected payment service providers:  

  • keeping of the records in electronic form for recipients of cross-border payments, if, during the calendar quarter, the payment service provider provided to the same recipient payment services corresponding to more than 25 cross-border payments,  
  • reporting of the maintained records to the Financial Administration of the Slovak Republic by no later than until the end of the calendar month following the respective calendar quarter.  

Payment service providers will be required to keep records of cross-border payments for three calendar years. 

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