Regulatory update

Reverse charge extended to foreign entities in Slovakia

31 December 2015

The domestic reverse charge will be extended to foreign entities in Slovakia under section 69 of the 222/2004 Slovakian VAT act as from 1 January 2016.

Countries:
Service:

The reverse charge mechanism applies with regard to goods and services (other than the distance sale of goods) supplied by a foreign person to a taxable entity established in Slovakia.

The extension results in the following:

  • Foreign companies that only carry out local supplies in Slovakia subject to the local reverse charge mechanism are not be obliged to register for Slovak VAT.
  • If they are already registered for Slovak VAT, they are not entitled to deduct input VAT via a Slovak VAT return, if this input VAT relates only to the supplies where the reverse-charge mechanism applies.
  • Foreign companies would be able to claim input VAT using the VAT refund procedure, providing they meet certain conditions.

The extension of the domestic reverse charge in Slovakia is a welcome change for foreign entities. It simplifies their business activity in the country, and reduces the administrative burden that they have faced to-date.

Got questions? Contact our VAT experts.

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Written by

Dr. Robert Nagy

VAT Account Manager

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