VAT registration under Sections 7 and 7a explained

Not every registration means you become a full VAT payer. Special cases are covered by registration under Sections 7 and 7a, which concern the acquisition of goods from the EU and the receipt or supply of cross-border services. In these situations, VAT is applied in a specific way, and many business owners forget about this obligation. We explain the differences between the two types of registration clearly and with simple examples.

Why a special registration exists

Even a non-VAT payer can find itself in a situation where it is obliged to declare tax on a cross-border supply. The special registration ensures that such tax is paid correctly, even though the person concerned is not a standard VAT payer with a full right to deduct. It is therefore a kind of intermediate stage between a non-VAT payer and a full VAT payer, which responds only to specific cross-border transactions and does not change the business’s usual regime. Thanks to this, even a small sole trader who would otherwise not reach the turnover for mandatory registration can correctly pay the tax on a one-off cross-border supply without becoming a full VAT payer.

Registration under Section 7

This type of registration concerns the acquisition of goods from another member state. If a non-VAT payer buys goods from the EU and exceeds the set acquisition threshold in a calendar year, it becomes obliged to register and to declare and pay tax in Slovakia on the goods acquired. Check the specific level of the threshold in the current version of the law, because it can change and cannot be treated as a permanent figure.

Registration under Section 7a

Section 7a covers services. It applies when a non-VAT payer receives a service from a foreign person with the place of supply in Slovakia, or when it supplies a service to another EU state where the tax is paid by the recipient under the reverse charge.

• receiving a cross-border service with the place of supply in Slovakia
• supplying a service to the EU under the reverse charge
• the obligation to register before the service is received or supplied

What the consequences are

A person registered under Section 7 or Section 7a obtains a VAT identification number, but as a rule is not entitled to deduct tax like a full VAT payer. It must, however, declare and pay tax on the supplies concerned and file the relevant returns and statements within the set deadlines. This registration does not make its ordinary domestic supplies subject to tax, so it continues to deal with domestic customers as a non-VAT payer.

How it differs from being a full VAT payer

The fundamental difference compared with standard registration is that this person does not change the regime of its ordinary domestic supplies and does not gain a full right to deduct tax on purchases. The registration applies only to the specific cross-border situations that triggered it. If you wanted a full right to deduct, you would have to consider voluntary registration as a full VAT payer.

How to avoid mistakes

In practice these registrations are often overlooked, which leads to additional assessments and penalties when the tax office discovers undeclared tax during an audit. If you buy goods from the EU or trade in services across borders, assess your obligations in good time, ideally before the supply takes place. Getting VAT set up correctly will save you unnecessary worries as well as fines. If you are not sure which section your situation falls under, a short consultation with an accountant will give you a clear answer before you sign the contract.

Related articles: Input VAT deduction: conditions and the most common mistakes, VAT on services supplied abroad: the place of supply, VAT on imports and exports of goods outside the EU.

Frequently asked questions

Will registration under Section 7a make me a full VAT payer?

No. You obtain a VAT identification number and the obligation to declare tax on the cross-border supplies concerned, but as a rule without the right to deduct that comes with full VAT payer status. It is a special type of registration for defined situations.

When do I have to register under Section 7a?

Registration is required before you receive a service from abroad with the place of supply in Slovakia, or before you supply a service to the EU where the tax is paid by the recipient. The obligation therefore arises before the supply itself takes place.