Change of the limit for the execution of a document by the cash register e-kasa client and a fuel dispenser for VAT purposes
Act No. 222/2004 on value added tax (“VAT Act”) allows in certain cases to issue a so-called simplified invoice for VAT purposes. If the requirements of the VAT Act are met, VAT can be deducted from the simplified invoice. In practice, simplified invoices are encountered in documents for the payment of goods and services issued by an e-cashier client or in documents issued by a fuel dispenser for the purchase of fuel.
With effect from 1 January 2025, the value up to which a document issued by an e-cashier and a fuel dispenser is considered a simplified invoice for VAT purposes, i.e. a document from which VAT can be deducted, is reduced. The original values of EUR 1 000 including VAT (payment in cash) or EUR 1 600 including VAT (payment by means of payment) are adjusted and unified to EUR 400 including VAT. The above limit will therefore apply to payment for goods or services in cash or by other means of payment replacing cash.
VAT can be deducted from a simplified invoice issued by an e-kasa client cash register or a refuelling machine only if the value of the purchased goods or services does not exceed 400 EUR, including VAT. Furthermore, the deduction is only possible if the goods or services are used for business purposes and the supplier is a VAT payer.
For payments for goods or services in excess of 400 EUR, including VAT, a proper invoice must be requested from the VAT-liable supplier.
Change of VAT system for selected leasing contracts from 1 January 2025
With effect from 1 January 2025, the provision of Section 8(1)(c) of Act No 222/2004 on value added tax (“VAT Act”) is amended in line with the wording of Council Directive 2006/112/EC and the established case law of the European Court of Justice.
As a result of this legislative change, there is a significant change in the VAT regime. According to the new wording of this provision of the VAT Act, the supply of goods will be considered to be a supply of goods on the basis of a rental contract, according to which ownership of the object of the rental contract is normally acquired at the latest on payment of the last payment.
In practice, for example, a car will be handed over on the basis of a leasing contract where most of the benefits and risks of ownership will be transferred to the lessee, the sum of the contract instalments will correspond to the value of the goods including the financing costs, and the lessee will not be required to pay a substantial additional amount when exercising the option to purchase the subject of the financing. In such leasing contracts, the tax liability arises on the date of delivery of the goods, i.e. in a lump sum, and at the same time the right to deduct VAT is created, provided the conditions of the VAT Act are met.
For such contracts, VAT will therefore not be applied to the instalments during the term of the lease.
The new tax regime applies to lease contracts concluded on or after 1 January 2025.
For the correct application of the VAT regime, we recommend a detailed examination of the contractual terms and conditions.
Financial transaction tax
On 3 October, the National Council of the Slovak Republic approved Act No. 279/2024 Coll. on the Financial Transaction Tax (“FTT Act”), which has already managed to be amended before its first entry into force.
The FTT Act has many uncertainties and raises a number of practical questions. Below we summarise selected provisions of the Act in relation to its current wording as well as to the current interpretation of the Financial Directorate of the Slovak Republic.
- The taxpayer is a natural person – entrepreneur, legal person, organisational unit of a foreign person who is a user of payment services of a payment service provider performing financial transactions (hereinafter referred to as the “provider”) and who has its registered office or place of business in the Czech Republic, has a payment account with a payment service provider based in the Czech Republic or carries out activities in the Czech Republic.
- According to the Commercial Code, an entrepreneur is a person registered in the Commercial Register, a person who operates a business on the basis of a trade licence or on the basis of a licence other than a trade licence under special regulations, a natural person who carries out agricultural production and is registered in the register under a special regulation.
- The taxpayer is not, for example: budget organisations and contributory organisations, civil association, foundation, non-investment fund, non-profit organisation providing generally beneficial services, and whose subject of activity are the activities listed in Section 50(5) of Act No. 595/2003 Coll. on Income Tax, as amended (hereinafter referred to as the “Income Tax Act”). These are legal entities of the non-profit sector established as public benefit organisations which meet the condition of the legal form precisely defined in the Income Tax Act, e.g. a civic association, a foundation, a non-profit organisation providing services of general benefit, etc.
Legal persons with the legal form of a company (e.g. a limited companies) providing services of general interest are not included in this exemption.
- The FTT Law contains a large number of exemptions from transactions that are not subject to the FTT. For example, payments made in connection with
- paying taxes, levies, fees and contributions that are revenue of the state budget, customs debt; social security contributions and health insurance contributions,
- managing securities or other financial instruments;
- buying government bonds;
- armed forces;
- by postal payment;
- transactions on the account of owners of flats and non-residential premises;
- transactions between accounts of the same taxpayer with the same payment service provider
- related to the automated offsetting of account balances with a single payment service provider of those taxpayers who are members of the consolidated entity for which the consolidated accounts are prepared.
- The above wording is very close to the definition of cash pooling, which is a cash management mechanism within a consolidated group that allows for centralised cash management between different entities or companies within the group.
- and others.
- The first tax period is in April 2025. The tax for the first three months (April – June) can be paid on 31 July 2025.
- The Financial Transaction Tax Notice shall be deemed to be a financial transaction tax return. The notice may be a regular, corrective or supplementary notice. It shall be filed by the end of the calendar month immediately following the end of the tax period and the FTT shall be payable within the same period.
- In the case of a taxpayer who is a VAT payer and who is recharged with the costs related to the execution of a financial transaction related to the taxpayer’s activity carried out in the Slovak Republic, the tax base shall be the amount of the recharged costs, of the financial transaction related to the taxpayer’s activity carried out in the Slovak Republic, which was executed by a person other than the taxpayer and which was recharged to the taxpayer by this other person, if the taxpayer can prove it.
If the taxpayer can demonstrably identify the recharged costs on a transaction-by-transaction basis, these transactions are subject to taxation at a rate of 0.4% up to a maximum of EUR 40 per transaction. If the taxable person is unable to identify the recharged costs in this way, the entire amount of the costs shall be taxed without the application of the maximum amount of tax.
- The taxpayer of the financial transaction tax is also a legal entity with its registered office abroad, which makes payments in connection with its economic activity in the Slovak Republic, despite the fact that it has not established a permanent establishment in the Slovak Republic for the purposes of the Income Tax Act or the VAT Act, or has not opened a bank account in the Slovak Republic.
- If a foreign legal entity is registered in Slovakia as a VAT payer pursuant to Section 5 of the Value Added Tax Act, has a bank account established abroad and makes payments from this account that are related to activities in Slovakia, the foreign PO is a payer of the financial transaction tax and the financial transaction is subject to the financial transaction tax.
- The financial transaction tax is charged to account 538 – Other taxes and charges and is a tax expense in accordance with Section 19(3)(j) of the Income Tax Act.
If you have any further questions, please do not hesitate to contact our tax advisors.
