During the last quarter 2019, several bills came into force, which will amend the Slovak VAT Act as of 1 January 2020. The adopted changes cover inter alia rules implementing the Council Directive (EU) 2018/1910 on common rues for call-off stock arrangements and for the chain transactions.
Download it as a PDF or read about the most significant changes below.
New rules for call-off stock arrangements
By implementation of the Council Directive (EU) 2018/1910, the current VAT rules for call-off stock arrangements, when Slovakia is the country where the transport of goods ends, will be amended.
At the same time, new rules will be introduced for call-off stock arrangements, when Slovakia is the country where the transport of goods starts.
If all conditions set by the law are met, the transfer of goods from one Member State to another Member State by the supplier for the purpose of its sale to the person, the identity of which the supplier knows at the time of transport, shall be disregarded. The supply of goods and its acquisition will arise at the moment, when the right to dispose with the goods as an owner is transferred to the identified customer, while the tax liability will arise in line with the standard conditions.
The application of rules for call-off stock will require the involved parties to keep in detailed records, the content of which is subject to a special definition.
Moreover, the goods shall be supplied to the taxable person for whom they were intended within 12-month period after the arrival of the goods.
The supplier of the goods will be obliged to submit the EC Sales Lists twice. First time, when the goods is transferred to another Member State; second time, when the goods is supplied.
Ascription of the transport in the case of chain transaction
Chain transactions refer to successive supplies of goods which are subject to a single intra-Community transport.
The intra-Community movement of the goods should only be ascribed to one of the supplies, and only that supply should benefit from the VAT exemption provided for the intra-Community supplies. The other supplies in the chain should be taxed and could require the VAT identification of the supplier in the Member State of supply.
If the transport is organized by the intermediary operator (i.e., a supplier within the chain other than the first supplier in the chain), it was not clear to which supply of goods the transport shall be ascribed.
In order to avoid different approaches amongst Member States, which may lead to double taxation or non-taxation, and in order to enhance legal certainty for operators, a common rule was established by the Council Directive (EC) 2018/1910. With effect as from 1 January 2020, this directive is implemented to the Slovak VAT law.
Where the same goods are supplied successively and those goods are dispatched or transported from one Member State to another Member State directly from the first supplier to the last customer in the chain, then if the transport is organized by the intermediary operator, the dispatch or transport shall be ascribed only to the supply made to the intermediary operator. This requires the intermediary operator to communicate to his supplier the VAT identification number issued to him by the Member State other than is the Member State from which the goods are dispatched or transported.
Otherwise, the dispatch or transport shall be ascribed only to the supply of goods by the intermediary operator.
Intra-Community supply of goods
As from 1 January 2020, for exemption of the supply of goods from one Member State to another Member State, the VAT identification number issued to the acquirer by the Member State other than is the Member State from which the goods are transported will be one of the substantive conditions. The acquirer shall communicate this VAT number to his supplier.
Further, since 1 January 2020, for exemption it will be also required to declare the supply of goods to another Member State in the EC Sales List.
Moreover, a common rule will be established as regards the proving of the transport of the goods to another Member State by the new Article 45a of the Council Implementing Regulation (EU) 2018/1912.
Exemption for transactions of international trade in the customs warehouse, special or tax warehouse
The new rule for exemption will be introduced and this for transactions related to trading with crude oil in customs warehouse or special warehouse and with mineral oil in tax warehouse.
Amendment to the list of goods being subject to 10% VAT rate
Newspapers, magazines and periodic press will extend the list of goods being subject to the reduced 10% VAT rate, if some conditions are met.
Further, some foodstuffs, vegetable, fruit and fruit juice will extend this list also.
Free of charge supply of tangible assets with small value
With the aim to define similar conditions for tax base determination for free of charge supplies of tangible assets with small value (which is not subject to depreciation for income tax purposes) to conditions, which are defined for depreciable tangible assets, the legal fiction will be introduced for VAT purpose that the tangible assets with small value are subject to 4-year depreciation period.
Adjustments to input VAT deduction from technical upgrade services
Services resulting to technical upgrade of taxpayer´s capital goods, with respect to which no VAT deduction was claimed at the moment of its acquisition, will be subject to adjustment as far as VAT deduction is concerned, too.
With respect to services performed on movable tangible property, the 60 calendar months period will be defined for the adjustment of the deducted VAT.
For services performed on immovable tangible property, it will be the 240 calendar months period. The period for VAT adjustment begins to lapse from the tax period, in which the VAT deduction on such service was claimed.