Beginning the next year, there are also changes planned for the act on value added tax. The Ministry of Finance of the Slovak Republic has submitted a draft act on value added tax focused on those areas that need to be synchronized with the practice of the Court of Justice of the European Union as well as to the areas which experience problems of application due to the existing regulations concerning the value added tax.
Hereby we describe select most significant proposed changes in the act on value added tax:
- Modifications in the tax collateral
The amendment of the act modifies the tax collateral in several respects. It is proposed that the obligation to deposit a tax collateral is also extended to those natural or legal persons who have a back tax of 1,000 EUR and more as to the day they file an application for tax registration, or whose VAT registration has been cancelled due to a repetitive failure to file a tax return, a repetitive failure to pay their own taxes, and other legal reasons for the cancellation of the tax registration. The draft amendment of the tax collateral also proposes the solutions for the practice-related situations that are currently not laid down in law.
- New condition in trilateral business
In the current act, one of the conditions for a trilateral business is the requirement that the first purchaser must not be registered for VAT in the member country of the other purchaser. Following the guideline on the common system of value added tax, it is necessary to reformulate this condition so that the first purchaser does not have their residence, place of business, establishment, and domicile in the member country of the other purchaser, or does not usually reside in the member country of the other purchaser.
- Special adjustment concerning the assignment of claims
The amendment proposes to separately establish the tax duty for such a case, when the tax-payer (who applies a special adjustment) assigns a claim. In such cases, the tax-payer has the tax duty established on the day when the claim is assigned. The tax base will be the price required for the provided goods or service, excluding the tax. On the day when the claim is assigned, the purchaser is entitled to deduct the tax. The right to deduct the tax will not be related to the amount paid if the purchaser is using the regular scheme.
- Cancellation of the 5,000+ EUR limit
It is proposed to cancel the limit on the tax base for an invoice in the amount of 5,000 EUR and more to transfer the tax duty on cereal crops and metals that belong to the Common Customs Tariff. The transfer of the tax duty will, therefore, apply to all deliveries of these commodities without any limit.
- Possibility to issue aggregate invoice also for foreign person subject to taxation
The draft amendment enables issuing an aggregate invoice for electricity, gas, water, and heat for a period of no more than 12 calendar months, including the cases when the purchaser is a foreign person subject to taxation.
- Possibility of early return of excessive deduction
It is proposed to make available the faster return of a part of the undisputable excessive deduction based on the audit sheet data before the actual tax audit begins.
- Obligation to file aggregate sheet for persons registered for taxation according to Arts. 7 and 7a
The draft amendment of the act imposes the duty for the persons registered for taxation according to Arts. 7 and 7a of the act on value added tax to file an aggregate sheet if they participate in a trilateral business as the first purchaser. The period for which they file the aggregate sheet will be registered in the same way as that of the tax-payers who supply goods to other member countries.
- Obligation to return the tax deducted from the payment after deregistration
It is proposed to introduce a new regulation that obliges the payer to return the tax deducted from the payment in the last period of taxation if the goods or service in question have not been delivered until the day when the registration is cancelled.
It is proposed that this act, once passed, becomes effective as of 1 January 2018.
