VAT News (Amendment No. 102/2024 Coll.) – Part 1

New VAT Registration Rules Effective from January 1, 2025

VAT registration will follow a different concept than before. A person will automatically become a VAT payer by law upon meeting specified conditions, and the registration decision will only have a declaratory effect. Shorter deadlines will also apply for fulfilling obligations towards the tax authority.

• A domestic taxable person with a seat or establishment in Slovakia will become a VAT payer effective from January 1 of the following year if they exceed a turnover of 50,000 euros in the current calendar year,
• A taxable person with a seat or establishment in Slovakia will become a VAT payer on the day they supply goods, exceeding a turnover of 62,500 euros in the current calendar year.
• A person will become a VAT payer by supplying goods or services subject to tax if they have an establishment in Slovakia and if they are not a small business applying tax exemption under § 68b.

Situations where a person becomes a VAT payer by law remain unchanged (e.g., legal successor, supplier of a construction project, in the case of demerger, etc.). For VAT payers due to supplying a building, part of a building, or building land, the turnover threshold will be 62,500 euros (previously 49,790 euros).

A taxable person in the listed cases shall apply for VAT registration within five working days from the day they exceed the turnover, or from the day they become a VAT payer due to a statutory event. The taxable person must also apply for VAT registration within five working days from the day they exceed a turnover of 62,500 euros if they were not obliged to apply according to point above.

There is also an obligation to notify the tax authorities about the fact that the person becomes a VAT payer under a provision other than exceeding the turnover of 50,000 euros if they have already applied for registration due to exceeding the turnover of 50,000 euros.

Voluntary registration remains possible.

VAT Payer under § 5 from 2025

A foreign taxable person without a seat, place of business, establishment, residence, or usual residence in Slovakia will become a VAT payer on the day they perform a taxable transaction subject to tax in Slovakia, with certain exceptions. The deadline for applying for registration is the same as for a domestic person, i. e. five working days from the day the person become a VAT payer.

Registration Decision

The tax authority will issue a registration decision within 10 days from receiving the registration application. In the case of voluntary registration, it will be issued within 21 days.

Right to Tax Deduction upon Registration

The amendment clarifies that a taxable person’s right to deduct tax on goods and services acquired before becoming a VAT payer can only be exercised in the first tax period following registration.

Late Registration

From January 1, 2025, late registration will require submitting a tax return and VAT transaction statement for each tax period. There will also be an opportunity to claim a deduction for related input tax in the late-filed tax returns. Currently, only one comprehensive tax return for the entire period when the person should have been a VAT payer is filed.

If a VAT payer submits a tax return and VAT transaction statement late due to failing to fulfill the registration obligation, they will be penalized for late submission and charged penalty interest for late tax payment. Currently, submitting a comprehensive tax return for the period when the person should have been a VAT payer within the legal deadline of 60 days and paying the tax within the same deadline is not penalized.

Small Businesses

From January 1, 2025, new special tax rules for small businesses will be introduced. The annual turnover in Slovakia and the EU will be monitored, affecting the tax exemption for supplies by foreign small businesses in Slovakia and domestic small businesses in another member state. The annual turnover in Slovakia will be monitored at 62,500 euros in the current and 50,000 euros in the previous calendar year. The EU annual turnover will be monitored at 100,000 euros in both the current and previous calendar years. Applicants must request permission to apply the special scheme in the state where they are established/reside. They will then be assigned an identification number with the suffix “EX,” allowing them to supply goods and services in the EU exempt from tax.

Purchases of goods and services from persons applying the special scheme for small businesses will not be subject to reverse-charge, as the supply will be exempt from VAT.