LAST DAYS TO RECLAIM VAT PAID ABROAD. APPLICATIONS CAN BE FILED BY 30 SEPTEMBER 2023

Entrepreneurs who are VAT payers can also purchase inputs abroad in the course of their business. A typical scenario is refuelling in another European Union country, buying small items needed for the business, restaurant services, taxis and the like. In such cases, the entrepreneur pays the full price of the goods or service abroad, including the foreign VAT.

If Slovak entrepreneurs are also registered for VAT in a particular EU member state, where they are also VAT payers and supply goods and services in that state (with the exception of certain cases, for example tax-exempt transport services), or if they have their place of business or a fixed establishment there, they can claim a refund of the VAT paid in that member state through a VAT return.

If they are not VAT payers abroad (in the EU member state) and have no registered office, place of business or fixed establishment there, they can claim a refund of the VAT paid abroad through what is known as the VAT refund system.

The VAT refund system in the EU is harmonised, which means that all countries apply the same procedure. This also means that foreign persons who buy goods and services in Slovakia and pay VAT here are entitled to a refund of that VAT once they meet the conditions.

Member states have certain exceptions concerning various goods and services for which VAT cannot be refunded, or can be refunded only under specific conditions. In some countries it is not possible to claim a VAT refund on restaurant services, fuel purchases, entertainment services and the like. The Financial Administration of the Slovak Republic (Finančná správa) provides an indicative overview of the conditions in the individual member states, but we recommend checking that the information is up to date on the websites of the countries concerned.

The VAT refund is governed by Sections 55a to 58 of Act No. 222/2004 Coll. on Value Added Tax (the VAT Act). The specific procedures for filing an application for a refund of VAT paid abroad are set out in Sections 55f and 55g of the VAT Act. Sections 55a to 55e of the VAT Act deal with the refund process from the opposite perspective, that is, the refund of VAT to a foreign person from another member state.

Who is entitled to a refund of VAT paid abroad? An application for a refund of VAT that a VAT payer paid in another EU member state can be submitted by an entity registered under Section 4 or Section 4b of the VAT Act. The rule is that a VAT payer registered under Section 4 of the VAT Act can apply for a VAT refund from a member state in which it does not have its registered office, place of business, fixed establishment or permanent address, and in which it does not usually reside.

The basic precondition is that the VAT payer has purchased goods and services in another member state, charged with that state’s VAT (or has imported goods into another member state), for the purposes of its business.

In other words, a VAT payer in Slovakia has the right to claim a VAT refund, for example for refuelling in another member state, provided that, in that state, it has no registered office or permanent address, does not do business there (place of business), has no fixed establishment there and does not usually reside there.