Slovakia is introducing fundamental changes to value added tax as of 1 January 2025. These steps are part of the government's plan to consolidate public finances. The changes will affect a wide range of areas, from VAT rates to VAT registration. Below is an overview of the most important changes, along with instructions on how to handle invoice processing, advance payment document (APD) deductions, and corrective tax document (CTD) creation when VAT rates change.
New VAT Rates
The legislation includes:
The standard rate increases from 20% to 23%.
The reduced rate decreases from 10% to 5% (basic foodstuffs, accommodation, books, fitness, sporting events and services in the gastronomy sector).
A new reduced rate of 19% is introduced. (Other foodstuffs and electricity.)
The 0% rate remains unchanged.
The new rates will be added to ABRA Flexi as part of a software update by 1 January 2025 at the latest. If you need the new rates before that update is available, you can add them manually in the VAT rate code list.
Examples of Applying VAT Rates During a Rate Change in ABRA Flexi
When VAT rates change, issues arise with VAT application if advance payments were made under the original VAT rate and the taxable supply (settlement invoice) falls under the new rate. In these cases, the procedure follows Section 27(5) of the VAT Act. When the VAT rate changes, the rate applicable on the date the tax liability arises is used each time a tax liability is created.
1. Example – goods delivered in 2024 and invoice issued in 2025
A VAT-registered supplier delivered goods subject to the standard VAT rate to their customer on 30 December 2024. The invoice for the delivery was issued on 5 January 2025. The tax liability arose for the VAT payer in accordance with Section 19(1) of the VAT Act on the date of delivery, i.e. 30 December 2024, so the 20% VAT rate applies. The fact that the invoice was issued in 2025 has no bearing on this. In accordance with Section 73(1) of the VAT Act, the VAT payer is required to issue the invoice within 15 days of the date of delivery of the goods or services, i.e. by 14 January 2025 at the latest.
2. Example – delivery of accommodation services spanning the turn of 2024 and 2025
A guest house, a VAT payer, provided accommodation services to a customer from 28 December 2024 to 5 January 2025. The customer paid for the entire stay upon check-out on 5 January 2025. In this case, the tax liability arises in accordance with Section 19(2) of the VAT Act on the date the service is supplied. The date of supply is understood as the day on which the service is provided, i.e. when its provision is completed, which is 5 January 2025. The guest house therefore applies the reduced VAT rate in force at the time the tax liability arises, which is 5%, to the total price of the services supplied.
3. Example – advance payment received in 2024 for goods to be delivered in 2025
A customer, a VAT payer, ordered goods subject to the standard VAT rate from their supplier in December 2024. The supplier issued a 100% advance invoice for the ordered goods. The advance was paid on 23 December 2024, but the actual delivery of the goods will not take place until January 2025. When a supplier receives payment before delivering the goods, a tax liability arises under Section 19(4) of the VAT Act on the date the payment is received. This means that since the payment was received on 23 December 2024, the tax liability arises on that date and the VAT payer applies a 20% VAT rate to the payment received. An invoice is issued at this rate within 15 days of receipt of the payment before delivery, or by the end of the calendar month in which the payment was received. Subsequently, in January 2025, when the goods are actually delivered, no new tax liability arises, because it already arose in 2024 upon receipt of payment covering 100% of the goods' price. The supplier is not obliged to remit an additional 3% VAT due to the rate change.
When creating the final invoice, use the VAT Rate Date field on the Accounting tab.
APD
Final invoice
4. Example – advance payment received in 2024 for goods to be delivered in 2025 with a remaining balance
A customer, a VAT payer, ordered goods subject to the standard VAT rate from their supplier in December 2024. The supplier issued a 50% advance invoice for the ordered goods. The advance was paid on 23 December 2024, but the actual delivery of the goods will not take place until January 2025. When a supplier receives payment before delivering the goods, a tax liability arises under Section 19(4) of the VAT Act on the date the payment is received. This means that since the payment was received on 23 December 2024, the tax liability arises on that date and the VAT payer applies a 20% VAT rate to the payment received. An invoice is issued at this rate within 15 days of receipt of the payment before delivery, or by the end of the calendar month in which the payment was received. Subsequently, in January 2025, when the goods are actually delivered, a tax liability arises and the remaining 50% of the goods' price will be taxed at the new rate of 23%.
On the final invoice, only the difference in tax bases is taxed.
APD
Final invoice
5. Example – advance payment received in 2024 for goods to be delivered in 2025 with an overpayment
On the final invoice, only the difference in tax bases is taxed. If the difference in tax bases is negative, the original VAT rate applies.
APD
Final invoice
6. Example – multiple advance payments at different VAT rates in 2024 for goods/services to be delivered in 2025
For correct VAT calculation, ABRA Flexi includes a Supply Groups feature available for the new rates (GUI, WUI)
APD
Final invoice
7. Example – tax base correction after 31 December 2024
Company A purchased books from Company B (both VAT payers) in December 2024. The invoice for the delivery of books was issued on 13 December 2024 with the 10% VAT rate applied. In January 2025, Company B accepted a warranty claim for damaged copies of the books and the goods were returned. Company B issued a credit note – a corrective tax document to the original supply – in January 2025 and refunded the appropriate portion of the supply value.
In this case, a partial return of the goods delivery occurred, which triggers a correction of the VAT base. Therefore, pursuant to § 25(7), the VAT rate applicable at the time the tax liability arose must be used, i.e. the 10% VAT rate. Company A is required, pursuant to § 53(1) of the VAT Act, to correct the deducted VAT in the tax period in which it received the tax base correction document.
Invoice for goods supplied
CTD
Other Changes to the VAT System Not Affecting ABRA Flexi
VAT deduction without an invoice: It will now be possible to claim a VAT deduction on the basis of a document other than an invoice, provided it demonstrates an actual purchase and the amount of tax.
VAT registration: The rules for calculating turnover will change. The calendar year will now be monitored instead of 12 consecutive months:
Turnover of €50,000 – VAT registration from 1 January of the following year.
Turnover of €62,500 – immediate registration.
Shortened registration deadline: The deadline for submitting a VAT registration application will be reduced to 5 days from exceeding the turnover threshold.
Changes to tax documents: The limit for a simplified tax document will be reduced from €1,000 to €400.
Increases to other taxes
Corporate income tax increases from 21% to 22%.
A financial transaction tax is introduced for legal entities.
Individual rates:
for use of a payment card issued to an account: a fixed-amount tax of €2 per calendar year in which the payment card was used
for a debit financial transaction (e.g. payment of an invoice by bank transfer): 0.4% of the transaction amount, up to a maximum of €40 per transaction
for cash withdrawals: 0.8% of the withdrawal amount with no maximum per transaction
Financial transaction tax optimisation here. This solution is not a standard part of ABRA Flexi. If you are interested in this topic, please contact us by submitting an improvement suggestion.
Excise duty on tobacco is increased.
A tax on sweetened beverages is introduced – depending on the type of sweetened beverage, tax rates are set ranging from €0.15/litre to €8.60/kilogram. This solution is not a standard part of ABRA Flexi. If you are interested in this topic, please contact us by submitting an improvement suggestion.