Reverse Charge Extended To Foreign Entities In Slovakia

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.

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.