Changes to the VAT Act from 1 January 2026

As of the new year 2026, fundamental amendments to the Value Added Tax Act will take effect in Slovakia. The changes will mainly affect the deduction of VAT on passenger cars and the tax rate on selected foods. The aim is to limit the abuse of deductions for the private use of cars and, at the same time, to increase tax revenues from the consumption of so-called "unhealthy" foods.

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Restrictions on car tax deduction (from 1 January 2026 to 30 June 2028)

It will be possible to deduct value-added tax from the acquisition of a motor vehicle (category M1, L1e, or L3e = passenger motor vehicle = PMV) only to the extent of 50% of the VAT amount.

Likewise, it will be possible to deduct value-added tax from a received service – a long-term lease of a passenger motor vehicle (M1, L1e, or L3e) – only to the extent of 50% of the VAT amount.

The aforementioned restriction shall not apply to a passenger motor vehicle that the taxpayer:

a) has acquired or uses exclusively for business purposes, which are:

• short-term lease or other than short-term lease of a passenger motor vehicle,
• transport of persons and their luggage for consideration, including taxi services,
• operating a driving school, if the passenger motor vehicle is a training vehicle,

b) uses exclusively as a demonstration or test passenger motor vehicle or as a replacement passenger motor vehicle provided to a customer for the period of repair of their vehicle or during which other services are performed on it,

c) has acquired as a capital asset exclusively for business or uses it exclusively for business, provided that detailed records are kept demonstrating the extent of the PMV's use exclusively for business.

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Records:

The taxpayer is obliged to keep records in electronic form. These records must contain:

• For each PMV: VIN, registration number, and the name and type of the PMV.
• The odometer reading on the day the records begin, at the end of each tax period, and on the day the records end.
• A record of each use of the PMV.
• A record of the acquisition of goods and receipt of services for the operation of the PMV.

The taxpayer is obliged to notify the tax authority of the use of a passenger motor vehicle exclusively for business within the deadline for filing the tax return for the tax period in which the tax deduction was claimed. The notification is submitted on a form, the template of which will be determined and published by the Financial Directorate of the Slovak Republic on its website. In the case of a PMV lease agreement, the notification is submitted for the tax period in which the taxpayer first claimed the tax deduction. In addition, the taxpayer is also obliged to report a change in the use of the PMV if it occurs during its use.

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Change in the VAT rate

From 1 January 2026, selected foods in Slovakia will be reclassified from the list of goods to which the reduced tax rate (19%) applied, and the standard tax rate of 23% will newly apply to them. This includes various types of sweets, confectionery, cakes, ice cream, jams, and savoury snacks.

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The changes to the VAT Act from 1 January 2026 will affect practically every entrepreneur and ordinary consumer. It is therefore important for companies and individuals to incorporate these changes into their financial and tax planning in a timely manner.