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Slovak VAT changes

Anti-fraud measures to help close VAT Gap

The Slovak Republic government has put out to consultation two changes to the VAT law to help reduce the Central European country’s VAT Gap.

Slovakia has made great strides in cutting the deficit between expected and actual VAT revenues – the VAT Gap. Since its 2014 introduction of Control Statement transaction reporting and domestic reverse charge, its VAT Gap has reduced from 28% to 11% in the last figures, 2021.

The new proposals are for:

  1. VAT Deductions Current legislation in the field of correction of deducted tax according to Section 53 of the VAT Act takes into account cases where the correction of deducted tax is preceded by the correction of the tax base on the part of the supplier of goods or services. In practice, however, other situations may arise that would justify correcting the deducted tax, generally in the case when there is a change in the factors used to determine the amount of the deducted tax. However, these situations are not taken into account in the current version of the VAT Act .

2. Investment Property treatment The VAT Act in its current version contains, for its purposes, a legal definition of the term “investment property”, which is applied across the whole of this Act, but primarily within the framework of the adjustment of deducted tax for investment property. The definition in question is not sufficient, as it is not clear from it that this term should include exclusively long-term assets of the payer.

The currently valid and effective formula, which determines the amount of either additional deductible tax or additional non-deductible tax for investment property, does not reflect the requirements set by Council Directive 2006/112/EC of November 28, 2006 on the common value added tax system as amended.

For more information on Slovakia, consult our Slovak VAT Guide.


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