In previous editions of our Newsletter, we have informed you of planned changes to the European Council’s VAT Directive (Council Directive 2006/112/EC) and the preliminary opinion of the Ministry of Finance of the Slovak Republic in which it expressed reservations about individual substantive changes.
In this regard, based on a resolution of the Government of the Slovak Republic, a bill proposing to amend the VAT Act is currently being discussed. It concerns changes in the harmonisation and simplification of certain rules in the VAT system for taxation of trade between Member States on the basis of Council Directive (EU) 2018/1910 of 4 December 2018 amending Directive 2006/112/EC.
Although the text of the bill is not yet available, the explanatory memorandum suggests the following changes:
a) common rules are to be introduced consisting of:
- facilitation of cross-border goods trading within the framework of the call-off stock arrangement (under this arrangement, when certain conditions are met, the carriage of goods to another Member State will not be deemed to have been relocated to another Member State, i.e. payers shall become exempt from tax or shall be liable to pay tax at a different moment; it will also be possible to apply this arrangement even if the supplier has a VAT identification number in the destination Member State),
- determination of the place of delivery of the goods with carriage performed by or on behalf of an intermediary entity as part of so-called intra-EU chain transactions (the aim is to establish a clear rule on the assignment of goods transport in intra-EU chain transactions, i.e. a precise rule for determining ‘floating deliveries’);
- an addition stating that a goods purchaser’s VAT identification number allocated by a Member State other than the Member State of departure of the goods shall constitute a substantive condition for the exemption of the supply of goods to another Member State (an important part of the conditions for tax exemption will also be a declaration of the delivery of the goods to a different Member State in a recapitulative statement – otherwise the tax administrator will not acknowledge a tax exemption).
b) tax exemptions for transactions involving crude oil and mineral oils shall be added to allow for the trade of stored crude oil, diesel, and petrol on international stock exchanges (this exemption will cover taxable transactions with specific goods listed in Annex No 9 to the VAT Act if such goods are delivered in customs warehouses, in special warehouses, or in tax warehouses).
The effective date of this Act is proposed for 1 January 2020. It will be a few months before the Act is approved, so we will keep a close eye on these proposals and inform you about them in subsequent editions of our Newsletter.