In practice, we repeatedly encounter situations where companies that are VAT payers sell goods to other European Union Member States to final consumers or entrepreneurs without an assigned VAT identification number, while failing to monitor thresholds and take timely advantage of the option to register for the OSS scheme (One Stop Shop) or in the Member States of destination.
This situation involves cross-border distance sales of goods carried out by a taxable person registered as a VAT payer under § 4, § 4b, § 4c, § 5, § 7, or § 7a of the VAT Act.
The transactions cover supplies of goods to:
- non-taxable persons (final consumers / private individuals in other EU Member States), and
- taxable persons without an assigned VAT identification number, i.e., EU entrepreneurs who are not VAT payers and whose intra-Community acquisition is not subject to tax.
Legal framework of distance sales of goods and the 10 000 EUR threshold
Distance sales of goods are defined as supplies of goods dispatched or transported by the supplier from one Member State to another, where they are made to private individuals or to taxable persons (entrepreneurs) without an assigned VAT identification number. Domestic VAT applies only until the total value of such supplies to the entire EU territory exceeds the threshold of 10 000 EUR excluding VAT in a calendar year and at the same time was not exceeded in the preceding calendar year.
Sales to all EU Member States are aggregated. The 10 000 EUR threshold is not assessed separately for each country. Supplies to entrepreneurs without a VAT identification number are included in the turnover in exactly the same way as sales to natural persons (non-entrepreneurs).
The specific invoice by which the amount of 10 000 EUR excluding VAT is exceeded in a calendar year automatically changes the place of supply from the home country to the Member State of consumption. The threshold-crossing invoice and all subsequent invoices are subject to VAT of the Member State of destination.
If the threshold was exceeded in 2025, the taxable person is not entitled to a new 10 000 EUR threshold in 2026, and every transaction from 1 January 2026 is subject to foreign VAT.
Registration obligations abroad vs. the OSS scheme (One Stop Shop)
From the moment the threshold is exceeded, the obligation arises to tax transactions in the Member States of consumption. The taxable person has two options:
Direct VAT registration in the Member State of consumption
Registration with tax authorities in each affected Member State of consumption, filing local VAT returns, and paying local VAT.
Registration for the OSS scheme
A single registration via the portal of the Slovak Financial Administration, which enables declaring and paying VAT for the entire EU in one quarterly return filed domestically. The OSS scheme applies exclusively to cross-border supplies to other EU Member States. Supplies of goods for Slovak customers are not included in the OSS and must continue to be reported and taxed through standard domestic tax returns.
The OSS scheme cannot be applied retrospectively to closed tax periods of the past. As a rule, the OSS scheme starts to apply from the following calendar quarter if the registration application is submitted no later than the 10th day of the month preceding the new quarter; however, if you notify the commencement of activities no later than the 10th day of the month following the month of the first supply under the OSS scheme, registration takes effect from the date of this first supply in that month.
Methodology of retrospective VAT correction for past periods
If a taxable person exceeded the threshold in the past, e.g. in 2025, and incorrectly applied domestic VAT on invoices, they are obliged to settle the tax situation according to the procedure described in the table.
| Step / Area | Methodological procedure and obligations |
|---|---|
| 1. Foreign registration | Retrospective VAT registration in the Member States of consumption from the date the threshold was exceeded, filing tax returns, and paying local VAT. |
| 2. Cancellation of invoices | Invoices issued with domestic VAT are cancelled/corrected with the original date of supply, and correct documents with foreign VAT are issued. |
| 3. Domestic reporting (DDP and DKV) | For the affected months, supplementary VAT returns and supplementary recapitulative control statements are filed domestically. In the recapitulative control statement, B2C invoices for private individuals (part D.2) are corrected summarily, whereas invoices for entrepreneurs without a VAT identification number (part A.1) must be corrected item by item. |
| 4. Refund of overpayment | Transactions are removed from domestic tax returns, resulting in a domestic VAT overpayment, the refund of which the taxable person requests under the Tax Code. |
After completing the corrected returns for past periods, the supplier can transition to applying the OSS scheme for ongoing and future transactions, thereby eliminating the need for further local registrations in EU Member States.
Accounting treatment and corporate income tax
If the financial statements for a past period, e.g. the year 2025, have been approved, closed accounting books must not be reopened. The correction is carried out in the current accounting period of 2026 via an internal accounting document. The change affects exclusively VAT and settlement accounts (analytical accounts 343 – VAT and 311 – Customers). Since the adjustment does not affect costs or revenues, it has no impact on corporate income tax and does not create an obligation to file a supplementary corporate income tax return for 2025.
The content of this article is for informational purposes only and in no way replaces professional legal, tax, or accounting advice. The company Dravecký & Partner bears no responsibility for any decisions made based on the information provided herein, nor for any potential damage that might arise from such actions. Before applying any information to your specific situation, we strongly recommend consulting with a qualified expert.
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