We would like to draw your attention this year to the incoming obligation to submit a motor vehicle tax return in Slovakia that must be submitted by January 31, 2024. In this context, we would like to offer you our services related to filling motor vehicle tax return and comprehensive advisory in this area.

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Vehicle categories

The obligation to submit tax return for calendar year 2023 arises for every vehicle belonging to the M, N, O or L category, which is used for business purposes, even if only for a part of the year.

The information about the vehicle category can be found in the Certificate of registration – part 1 or part 2 in line J – Category.

Tax obligation

The taxpayer is:

In the case of an organizational unit registered as a holder in the registration book, the taxpayer is a legal person – the founder of this organizational unit.

Tax rate

When calculating the tax obligation, it is necessary to adjust the annual tax rate, which is bindingly determined and divided for personal and commercial vehicles in relation to the tax base, first, according to the number of months that have elapsed since the month of the vehicle´s first registration in Slovakia. The exceptions are commercial vehicles of category O4 for which the annual tax rate will flatrate decrease by 60% regardless of the age of the vehicle. Subsequently, this adjusted (reduced of increased) tax rate can be further reduced by 50% depending on the type of the vehicle actuation. This additional reduction applies to the hybrid motor and hybrid electric vehicles, compressed or liquefied natural gas (CNG or LNG) vehicles and hydrogen-powered vehicles.

The taxpayers are also entitled to a further reduction of the tax rate by 50% in the case of using a vehicle in combined transportation at least 60-times in a given tax period.

Electric cars

The ecological aspect of the motor vehicle tax is reflected in electric cars, for which the legislator has set an annual tax rate of EUR 0.

The annual tax rates for the personal and commercial vehicles can be found in Annex no. 1 and Annex no. 1a of Act no. 361/2014 Coll. on motor vehicle tax as amended.

Incurrence of tax obligation

The tax obligation to the motor vehicle tax arises from the first month, in which the vehicle was used for the business purposes. Use of the vehicle for the business purposes means:

The tax obligation ceases to exist on the last day of the month in which:

The chargeability and termination of the tax obligation shall be included in the tax return.

A taxpayer is obliged to pay a proportionate part of the tax within a time limit for submitting a tax return in case of chargeability and termination of the tax obligation during the tax period. The proportionate part of the tax shall be calculated as a product of 1/12 of annual tax rate or adjusted annual tax rate and based on the number of calendar months for which the motor vehicle has been used. If the tax exemption for legally defined vehicles ceases during the tax period, the taxpayer will pay a proportionate part of the tax.

Tax period

The tax period is a calendar year. The exception occurs only in the following cases – when the tax period is determined separately:

Calculation of tax and tax advances

The tax obligation is determined based on the number of months the vehicle is used for business purposes in the given tax period.

The tax advances are determined based on the estimated tax for the next tax period, but as a sum of the annual tax rate adjusted by the number of months from the date of the first vehicle registration and the type of the vehicle actuation for each vehicle that is a subject to the tax of January 1 of the next tax period.

The limits for determining the quarterly and monthly advances are adjusted as follows:

The payment of advances is not affected by the change in the subject of the tax, the creation and termination of the tax exemption, the reduction and increase of the annual tax are during the tax period and submitting of an additional tax return.

Notification obligation

The notification obligation arises only in a case when the taxpayer didn’t use the vehicle for business purposes, didn’t account it, didn’t register the vehicle in the tax register or didn’t claim the expenses related to the use of the vehicle during the given period.

The tax obligation for such a vehicle terminates on December 31 of the previous tax period and it is required to notify the tax administrator of this fact by January 31 after the end of the given tax period.

Tomáš Ptáček
Senior Tax Consultant | Accace Slovakia
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Can you bear the burden of proof in the tax audit process? A tax audit on VAT can affect any entrepreneur, regardless of whether they are large multinational corporations with various local and cross-border transactions or small and medium-sized enterprises that supply only one type of goods or provide standard services.

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A tax audit can make “life” difficult even for honest entrepreneurs whose business is fully compliant with the law. And that’s simply because they can’t sufficiently prove the transactions they’ve made, or they’ve chosen the wrong business partner. The burden of proof is on the side of the taxpayer, therefore the entrepreneur should remember in every transaction that the evidence of its real execution must be kept, as they may be needed in the future. The standard period for the tax audit on VAT, during which a taxpayer may be investigated, is almost 6 years. This represents a relatively long period when considering employees fluctuation, changes in internal operations, physical storage of documents, etc.

The right to deduct VAT

Small and medium-sized enterprises that do not have implemented such detailed internal and control processes can often find themselves in problematic situations, e.g.:

related to the insufficient verification of the business partner

or insufficient supporting documentation.

As the Court of Justice of the EU has emphasized several times in its case-law, the right of taxable persons to deduct input VAT already paid on goods they have acquired or services they have received from output VAT is a basic principle of the common VAT system and the right to deduct tax is inseparable part of the VAT mechanism, and in principle cannot be limited.

Principle of neutrality

This principle of neutrality requires that VAT deduction is granted if the substantive requirements are met. In practice, this means demonstrating that:

the delivery of the goods or service occurred as declared on the invoice that the taxpayer has at the disposal,

a tax liability really arose by this delivery,

and also, that the taxpayer, as a buyer, used the purchased goods and services for his own taxable transactions.

The sanction in the form of an absolute denial of the right to deduct VAT is disproportionate if there was no tax evasion.

Tax audit process

The ideal tax audit scenario is as follows:

As a result, the doubts of the tax administrator are eliminated, and the tax audit ends without a finding.

When does the tax administrator not have to admit the right to VAT deduction?

The problem arises when transactions in which suppliers did not fulfill their obligations become the subject of tax control. For example, a supplier does not submit a tax return and control statement or does not pay the tax, and then becomes non-contactable.

These are situations where the supplier:

In such cases, which in practice are increasing more and more, the tax administrator tries not to recognize the right to VAT deduction to the customer, instead of recovering the unpaid tax from the supplier. Most often, the tax administrator argues that the actual supply of goods or services did not take place at all, or that it was not carried out in the manner declared by the supplier on the invoice.

Burden of proof in tax proceedings

In order for the taxpayer to avoid the refusing of the right to VAT deduction, the taxpayer must bear the burden of proof and sufficiently demonstrate that he actually received the goods or services as declared on the invoice and used them for his taxable output. However, this is usually problematic due to the lack of evidence at the side of the customer. Customers often provide only invoices, which does not satisfy the tax administrator, and they do not have other evidence proving the respective delivery.

It is therefore important that every customer should approaches this issue with proper attention and makes sure that they also have other evidence at their disposal, such as:

signed delivery notes and acceptance protocols,

transport documents, work schedule, orders, contracts,

email communication with the supplier,

record from the attendance system if the service is delivered at the customer’s premises, etc.

Often, VAT evasion actually occurred at the side of this non-contactable supplier or at an earlier stage of the business chain, but this fact itself, or other doubts about the supplier and subcontractors at an earlier stage cannot lead to the rejection of the right to VAT deduction.

However, the tax administrator, in his decisions refusing the right to VAT deduction, is often questioning the credibility of the supplier resulting from his:

However, if it is proven that goods or services were actually delivered between the customer and his supplier, the right for VAT deduction cannot be rejected only on the basis that the tax administrator considers this transaction to be irrational from an economic point of view, or that the supplier or some of the subcontractors did not fulfill his tax obligations at an earlier stage of the chain. In such a case, the tax administration is obliged to prove, based on all the circumstances and findings, that the given customer knew or could have known that he was participating in a transaction infected by tax evasion. Only when this is properly proven, the tax deduction should not be granted.

How can an entrepreneur avoid the rejection of the right to VAT deduction?

The task of the entrepreneur claiming the VAT deduction, is in the case of tax audit to demonstrate that he approaches the selection of his suppliers with appropriate care and prudence.

This may mean, for example, that:

Verifying your business partners, as well as obtaining and keeping evidence of the actual delivery is undoubtedly time-consuming and administratively demanding, but entrepreneurs should definitely not underestimate these facts. They can thus avoid time-consuming proving process during the tax audit and, last but not least, the financial consequences, which can even be liquidating for small entrepreneurs.

If you are interested in setting up control processes tailored to your company, so that a possible future tax audit does not catch you off guard, we would be glad to offer you our consulting services. Our experience in the field of tax audits will help you identify and reveal weak spots in your processes, and our specific measures will help you reduce the risk of a negative findings in the tax audit process. If you find this interesting, do not hesitate to contact us at .

Tomáš Ptáček
Senior Tax Consultant | Accace Slovakia
Get in touch with us
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