In this article, we bring you the most important changes to the proposed amendment to the Value Added Tax (VAT), which should come into effect on 1. 1. 2020. In the Act on Income Tax, the effect of some provisions from 1. 1. 2021 or 1. 1. 2022.

We will inform you in due time of the approval of the final version of the amendments to the laws.

Brief overview of the proposed changes:

1. VAT Act

Registration changes

Abolishment of the obligation to register when delivering a part of the building, which is an individual apartment or apartment after five year of acceptance.

A foreigner person supplying petroleum oils and oils obtained from bituminous minerals will not have to register for VAT.

          New call-off stock mode

A call-off stock regime is a relationship between two taxable persons in which the carriage of goods to another Member State is not regarded as a supply of goods to another Member State under certain conditions.

New rules should be also laid down for the acquisition of goods within the country from another Member state under the procedure.

          Equalization of the tax base for small tangible assets

Determination of the tax base for small tangible assets so that there is no obligation to pay VAT on the entire purchase price in case of these assets

          Chain stores

Establishing a clear rule on the allocation of goods transport for chain transactions within the EU.

          Accommodation services

A new definition of accommodation services that would be exempt from VAT.

          Defining the substantive conditions for VAT exemption when goods are delivered to another EU Member State

Clarification of the conditions for exemption from VAT on the supply of goods to another Member State and the establishment of specific evidence for exemption from VAT on the supply of goods to another Member State.

          Exemption for transactions involving crude oil and minerals oils

Exemption for taxable transactions linked to international trade relating to oil in storage (as of 1. 1. 2020).

          Exemption in customs warehouse

It lays down the obligations of persons who possess crude oil at the time they are traded in a customs warehouse and they are no longer subject to the cumtoms warehousing procedure.

2. Income Tax Act

The amendment to the Income Tax Act intended to simplify the calculation of the tax base for small and medium-sized enterprises to avoid the use of hybrid inconsistencies with third countries as well as to clarify certain concepts

          Micro-taxpayer

A natural or legal person, if it is a non-dependent person who has an income less than 49 790 EUR, may benefit from certain tax return benefits. This proposal should enter into force on 1. 1. 2021.

          Hybrid inconsistence with third countries

Implementation of Council Directive (EU) 2017/952 in Slovak legislation if at least one of the parties is a legal person who is a taxpayer or, in the case of reverse hybrids, an entity in a Member State. The proposed amendment introduces rules that prevent the use of hybrid elements due to different tax assessments of financial instruments and taxpayers leading to tax reductions.

          Change in the scope of tax expense eligible for payment

The proposed adjustment modifies the scope of expenditure as well as their amount, which are considered to be tax expenditure only after payment.

          Deduction of tax loss

Change in the number of years of amortization of losses and possibility of higher amortization of losses per tax period.

          Non-monetary benefits provided to employees

• Proposal to delete Annex no. 6 of the Income Tax Act (calculation od the increase in cash)

• exemption in cash up to 500 EUR if the employer is not recognize tax expense

• increase in the amount of non-monetary benefits for the purpose of providing accommodation for an employee provided by an employer whose principal activity is production in a multi-shift operation

          New depreciation group

New depreciation group 0, with a depreciation period of 2 years, for cars with hybrid or electric drive.

          Increase in the quarterly advance payment limit

Increase in the limit for paying quarterly advances from 2500 EUR to 5000 EUR.

          Clarification of terms

Replacement of the term “taxpayer of a non-contracting State” by “taxpayer of a non-cooperating State” due to the incorporation of the EU black list.

          Taxpayer income with limited tax liability

Clarification of the definition of profit-sharing (dividends) considered as income from a source in the Slovak Republic of a taxpayer with limited tax liability.