Draft amendment to the VAT Act: focus on preventing abuse of the VAT system

Planned Measures to Prevent Abuse of the VAT System

In view of the above objectives, the following measures are proposed to come into force on 1 January 2027:

• expanding the range of situations in which the tax authority may, of its own accord, cancel a VAT payer’s registration – this will mainly concern cases where the taxpayer:
  • repeatedly, over a specified period, issues an invoice for the supply of goods or services that did not in fact take place, or
  • claims a VAT deduction on the basis of such a fictitious invoice;
• introduction of a legal presumption of cessation of economic activity in respect of those VAT payers who, for example:
  • fail to notify the place where their business activities are carried out within the specified time limit, even after being requested to do so,
  • provide only a so-called correspondence address, or
  • submit VAT returns for a certain period in which they do not provide any details of taxable transactions or input VAT;
• extending the newly expanded rules on deregistration for VAT purposes to persons registered under Sections 7 and 7a of the VAT Act;
• introducing the option, in specified cases, to lodge an appeal with suspensive effect against a decision to deregister, in which it will be possible to demonstrate that business activities are being carried out in a different manner or by other means;
• extending the deadline for a decision on VAT registration to 60 days in the case of voluntary registrations where the tax office has doubts as to whether the applicant is in fact a taxable person or whether the information provided in the application and accompanying documents is complete, correct and truthful.

Procedural changes regarding the termination of entitlement for repayment of VAT excess deduction

From 1 January 2027, a taxpayer will have the option to lodge an objection against a notice of termination of the entitlement for repayment of VAT excess deduction resulting from a failure to allow a tax audit to be carried out within 3 months of the date of its commencement, this will be subjected to the tax authorities’ decision. If the objection is upheld, the taxpayer’s entitlement to a refund of the excess VAT deduction will not lapse; no further appeal may be lodged against the decision on the objection.

Related legislative amendments

The Ministry of Finance of the Slovak Republic is also proposing related amendments to the following regulations:

• Act No. 251/2024 Coll. on the Tax on Sweetened Non-Alcoholic Beverages (‘the SNB Tax Act’), with the aim to:
  • prevent the circumvention of tax obligations through a misleading labelling of sweetened non-alcoholic beverages;
  • introduce – following the amendment to the VAT Act, which introduces the right to lodge an objection against a notice of termination of the entitlement to repay a VAT excess deduction – similar legal provisions into the SNB Act, given the similar nature of both taxes.
• Act No. 563/2009 Coll. on Tax Administration (Tax Code) – this will involve a partial procedural amendment directly linked to the introduction of the possibility to lodge an objection against a notification of termination of the entitlement to a repayment of excess VAT and tax on sweetened non-alcoholic beverages.

The draft amendment is currently undergoing evaluation following the consultation process. We will keep you informed of further developments in the legislative process.