Starting from 1 January 2018, several changes became effective also within the Act on Value added Tax. This newsletter provides a summary of the most important changes.
- Tax representative of a foreign person
The introduction of special tax representative of a foreign person applies to the cases where a foreign person acquires, in the Slovak Republic, goods from another member state, provided that the goods will be, accordingly, supplied to another member state free of VAT according to Section 43 of the Act or exported free of VAT according to Section 47 of the Act or supplied in form of mail order where the place of supply is another member state. In these cases, a foreign person may appoint a tax representative. The appointment only applies to foreign persons not registered for VAT purposes in Slovakia, that haven’t supplied any goods or services based on which they would be required to pay VAT in Slovakia.
More foreign persons may be represented by one tax representative that is responsible to submit for these foreign persons one VAT return, one VAT control statement and one summary statement. Please be aware that any invoices for goods supplied by a foreign person with the place of delivery in Slovakia must include the tax representative’s details.
- Transfer of tax liability – repealed limit in agricultural crops and metals
From 1 January 2018, domestic transfer of tax liability to the recipient (tax payer) applies to all supplies related to agricultural crops and metals regardless of the invoiced sum. The amendment repeals the previous minimum tax base of €5,000.
- Triangular Trade
The amendment regulates the condition of triangular trades where the first customer may not be based (have a registered office, place of business, operation, residence or may not normally stay) in the member state of the second customer. Until 2017, the first customer couldn’t be registered for VAT in the country of the second customer to fulfil the condition of a triangular trade. The Slovak legislation becomes this way in accordance with the Council directive on the common system of VAT.
- Summary Statement
Registered VAT payers according to Section 7 and Section 7a are responsible to submit a summary statement if they are involved in a triangular trade as the first customers.
- Tax Guarantee and Tax Administrator’s Responsibility
If a natural person or legal person cancels its VAT registration within 12 months after lodging a guarantee for a tax or for a part thereof, the new provision of the Act orders the Tax Authority to immediately return the guarantee for the tax or for the remaining part. However, this doesn’t apply if the registration is cancelled due to the legal person having been dissolved without liquidation where the legal successor is or becomes a tax payer according to Section 4 (4) of the Act.
- Summary Invoice for a Foreign Person
Starting from 1 January 2018, summary invoices may be issued for rental and supplies of electricity, gas, water and heat for a period of 12 calendar months also in the case where the recipient is a foreign taxable person. Until 31 December 2017, it was possible to issue such summary invoices only where the recipient was a domestic taxable person.
- Assignment of Receivables within Special Regulation
If a customer – tax payer applying special regulation – fails to pay for supplied goods or services directly to the supplier or to another person based on assigned receivables, the right to tax deduction arises on the day on which the tax was paid to such person in the paid amount.
- Supply of Immovable Property
After fulfilment of the VAT Act requirements, supplies of immovable property may be exempted from tax but the supplier may decide to tax such a supply. In such a case, the person liable is the recipient or the buyer. The new provision of the VAT Act constitutes the supplier’s responsibility to inform the buyer in writing about the decision to tax the immovable property being supplied within the period of time designated for the issuance of an invoice.
- Capital Assets and Regulation of Deducted Tax
The new act extends the definition of capital assets to all constructions. The period of time for the adjustment of the deducted tax remains 20 years. The amended provision will be applied in accordance with interim provisions only to the constructions in which the tax payer deducted VAT after 31 December 2017.
