Domestic small enterprises with a total annual turnover of up to EUR 100,000, operating in Slovakia and within the EU, may, as of 1 January 2025, utilize the special tax exemption scheme for small enterprises.
This special scheme simplifies business for a small enterprise in another EU Member State and relieves it of the administrative obligations related to VAT (such as VAT registration and filing tax returns in multiple EU countries). It also allows it to apply a tax exemption on supplies to these EU countries.
Please note that the special scheme applies to the supply of goods and services by a small enterprise to another Member State. A domestic small enterprise must continue to monitor its turnover for the purposes of VAT registration in Slovakia and comply with Slovak VAT legislation.
The special VAT scheme can also be used by small enterprises of a foreign person if their annual turnover in the Slovak Republic did not exceed EUR 62,500 in the current year and EUR 50,000 in the preceding calendar year. At the same time, their total annual turnover in the Union must not exceed EUR 100,000 in either the current or the preceding calendar year.
A small enterprise of a foreign person must meet other conditions:
- it is established in another EU Member State,
- in that state, it is also identified for the special SME scheme,
- The Slovak Republic has confirmed that the conditions for applying the special SME scheme in its territory have been met.
A small enterprise applying the special SME scheme loses the right to deduct tax on goods and services used to provide exempt supplies.
For the purposes of applying the special SME scheme, small enterprises register only once, in the Member State in which they have their seat, place of business, or residence. In the Slovak Republic, domestic entities register using the electronic form: Notification of the application of the special tax exemption scheme for a small enterprise/update of the list of Member States for the application of the special scheme/notification of change of data/cancellation of the special scheme.
The Member State will assign them an individual identification number with the prefix 'EX', which it uses in all EU Member States in which it applies the special SME scheme. The small enterprise notifies the tax administrator of the Member States in which it wishes to apply the special SME scheme. A small enterprise may apply the special SME scheme only in those states that confirm the small enterprise has met the conditions for applying this scheme in their territory.
During the application of the special SME scheme, the taxable person is obliged, in the Member State of establishment, after the end of each calendar quarter, to submit the electronic form 'Quarterly return of a domestic small enterprise', which will be published on the website of the Financial Directorate of the Slovak Republic.
Verification of the validity of the individual identification number with the prefix 'EX' in the Member States of exemption as of the verification date is possible through the European Commission's application on the website HERE.
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