The VAT system in Slovakia differs from the CIS countries, the USA and the Middle East, especially in the context of the sale of goods and provision of services in the European Union to EU individuals. Let's look at this in more detail:
1. Sale of goods:
- If your turnover does not exceed 10,000 euros per year, then you apply the Slovak VAT rate, which is 20%.
- After exceeding this amount, the VAT rate will depend on the location of the recipient of the goods.
* Toys s.r.o. sells goods and their turnover in the EU is less than 10,000 euros per year, which means they will charge the Slovak VAT rate (20%) on their sales. However, once this amount is exceeded, the company will have to take into account the VAT rate applicable in the countries where their customers are located.
2. Provision of services:
- Electronic services, IT services and other services are also subject to VAT rules.
- Determining where the service is provided is more important than who provides the service.
- If your turnover does not exceed 10,000 euros per year, you apply the Slovak VAT rate (20%).
- After exceeding this amount, the VAT rate will depend on the country where your client is located.
* For example, Toys s.r.o. produces toys. At the beginning of the year their turnover is less than 10,000 euros and they apply the Slovak VAT rate (20%) on the sale of toys in the European Union. Toys s.r.o. becomes popular and sales increase. By June the turnover reaches 10,000 euros. Now they need to change their tax policy. The company begins to take into account the VAT rate applicable in the country where each of its clients is located in the EU.
3. Monitor your turnover:
- Turnover of 10,000 euros is counted from the beginning of the year.
- Sales of goods and services are taken into account together when calculating turnover.
- If you are not a VAT payer, sales up to 10,000 euros are exempt from VAT. Once this amount is exceeded, you must start charging VAT.
* Let's imagine that your turnover in the middle of the year reached 10,000 euros, then from this moment you are obliged to charge VAT on your sales.
To simplify tax reporting in the European Union, there is an OSS (one stop shop) system. Here's how it works:
1. Registration with OSS: You can register with OSS in one EU country, for example, in Slovakia.
2. Payment of VAT at the place of receipt: Once the turnover exceeds 10,000 euros, you begin to include the relevant country's VAT rate in your invoices.
3. Filing Quarterly Returns: You are required to file quarterly VAT returns in your country of registration with OSS.
4. Tax Distribution: The taxes you pay are automatically redistributed to the countries where you sold the goods or services.
*Toys s.r.o. registered with OSS in Slovakia and sold goods or services to different EU countries, that is, they filed reports only in Slovakia and paid taxes there. Slovakia then automatically redistributed taxes to other countries.
This is especially useful for online stores and IT services, simplifying tax reporting procedures and allowing you to operate efficiently in different EU countries.
1. Sale of goods:
- If your turnover does not exceed 10,000 euros per year, then you apply the Slovak VAT rate, which is 20%.
- After exceeding this amount, the VAT rate will depend on the location of the recipient of the goods.
* Toys s.r.o. sells goods and their turnover in the EU is less than 10,000 euros per year, which means they will charge the Slovak VAT rate (20%) on their sales. However, once this amount is exceeded, the company will have to take into account the VAT rate applicable in the countries where their customers are located.
2. Provision of services:
- Electronic services, IT services and other services are also subject to VAT rules.
- Determining where the service is provided is more important than who provides the service.
- If your turnover does not exceed 10,000 euros per year, you apply the Slovak VAT rate (20%).
- After exceeding this amount, the VAT rate will depend on the country where your client is located.
* For example, Toys s.r.o. produces toys. At the beginning of the year their turnover is less than 10,000 euros and they apply the Slovak VAT rate (20%) on the sale of toys in the European Union. Toys s.r.o. becomes popular and sales increase. By June the turnover reaches 10,000 euros. Now they need to change their tax policy. The company begins to take into account the VAT rate applicable in the country where each of its clients is located in the EU.
3. Monitor your turnover:
- Turnover of 10,000 euros is counted from the beginning of the year.
- Sales of goods and services are taken into account together when calculating turnover.
- If you are not a VAT payer, sales up to 10,000 euros are exempt from VAT. Once this amount is exceeded, you must start charging VAT.
* Let's imagine that your turnover in the middle of the year reached 10,000 euros, then from this moment you are obliged to charge VAT on your sales.
To simplify tax reporting in the European Union, there is an OSS (one stop shop) system. Here's how it works:
1. Registration with OSS: You can register with OSS in one EU country, for example, in Slovakia.
2. Payment of VAT at the place of receipt: Once the turnover exceeds 10,000 euros, you begin to include the relevant country's VAT rate in your invoices.
3. Filing Quarterly Returns: You are required to file quarterly VAT returns in your country of registration with OSS.
4. Tax Distribution: The taxes you pay are automatically redistributed to the countries where you sold the goods or services.
*Toys s.r.o. registered with OSS in Slovakia and sold goods or services to different EU countries, that is, they filed reports only in Slovakia and paid taxes there. Slovakia then automatically redistributed taxes to other countries.
This is especially useful for online stores and IT services, simplifying tax reporting procedures and allowing you to operate efficiently in different EU countries.