Draft amendment to the Slovak VAT Act brings considerable changes in input VAT deduction rules

The proposed amendment is planned to be effective from 1 January 2025 (except for amendments in correction of input VAT deduction upon importation of the goods which is proposed to be effective from 1 July 2025) and brings mainly these changes in claiming the right for input VAT deduction as well as in the adjustment and correction of deducted input VAT:

• Precision of definition of the term “investment property” (i. a. exclusion of stock, inclusion of intangible assets and reduction of value for moveable assets);
• Introduction of the concept of “primary use”;
• Broadening of situations in which there will be an obligation to correct or adjust deducted VAT (e. g. for advance payments),
• Changes in the rules and method of correction and adjustment of deducted VAT,
• Cancellation of the possibility to deduct VAT from the purchase of fuel up to the amount of flat-rate expenses according to the Income Tax Act.

The proposed amendment also:

• Contains several clarifications and adjustments in the changes in VAT registration as well as in special scheme for small enterprises, which were introduced by last amendment to the VAT Act (more information can be found here) and which will be effective from 1 January 2025;
• Introduces a change in the determination of the VAT base upon personal use or use for other than business purpose or upon free-of-charge supply of goods and services and in payment of VAT upon deregistration as well as upon unlawful appropriation of goods;
• Stipulates that provided the deadline for submission of an application for refund of Slovak VAT (VAT refund) falls on a weekend or holiday, it will not be postponed to the next working day.

We will keep you informed on the next steps within the legislative process.