This year, significant VAT changes have been introduced in Slovenia. The most important VAT changes relate to the expansion of the reverse charge system for foreign entities in Slovenia and the abolition of the registration obligation for foreign entities for VAT purposes in Slovenia. Furthermore, the possibility of deducting input VAT for electric vehicles is being introduced. The VAT changes were published in Official Gazette RS No. 3/2022 on 7 January 2022, and took effect on 22 January 2022. The rules on the implementation of the VAT Act are valid from 10 February 2022. Below, we summarise the most important elements of these VAT changes.
Distance selling of goods
Regulations for service provision and the distance selling of goods made it into the Slovenian VAT Act this year too, although they have been in force since 1 July 2021. Due to EU requirements, the new regulations should have been implemented in national law as early as 1 July 2021, but they were temporarily set in the Rules on the Implementation of the VAT Act, now abolished.
Abolition of paper invoices
Due to the recent VAT changes, customers in Slovenia will receive a paper invoice only if they want one. The aim of the amendment is to relieve the administrative burden on both taxpayers and the tax authority, and to support the consideration of environmental aspects. Issuing a paper invoice to the consumer is thus no longer a responsibility of the seller.
Input VAT may already be deducted for the period of the VAT liability
Accountants welcome this novelty, which allows input VAT also to be taken into account for invoices that were not received in the period for which VAT is calculated, but in the following period. The deduction of input VAT can already be considered in the period when the input VAT obligation arose if there is an invoice available when preparing the VAT report (DDV-O). This settles the VAT calculation and the VAT deduction in the same period for different taxpayers.
VAT changes related to electric passenger vehicles
The requirements for deducting input VAT for electric passenger vehicles since 22 January 2022 are the following:
- the motor vehicle emits no carbon dioxide emissions;
- the value of the motor vehicle, including VAT and other charges, does not exceed EUR 80,000;
- the vehicle is intended for a taxable person to perform business activities, but can also be used for private purposes;
- the VAT obligation arises for every kilometre driven for private purposes, multiplied with the refund for the business trip in kilometres, which is acknowledged as the highest tax deductible refund of the business trip;
- the calculations of the VAT base for private use of the car is as follows: no. of kilometres for private use multiplied by EUR 0.37 / km (and from 1 July 2022 EUR 0.43) = tax base for VAT;
- the period to calculate the VAT obligation is a month, a quarter or at least one time in the calendar year, no later than by 31 December.
Furthermore, the taxable person can assert the right to deduct VAT on the purchase of fuels, lubricants, spare parts and services related to these motor vehicles, if these purchases are related to vehicles that meet the above conditions.
The entitlement to input VAT deduction may also be enforced for vehicles already purchased by taxpayers in the previous years, but only for a proportionate part of the period up to five full years from the purchase date.
Abolition of mandatory identification of a non-resident taxpayer in Slovenia for VAT purposes
Until now, a non-resident taxable person who supplies goods and services in Slovenia had to be identified for VAT purposes in Slovenia, e.g. when delivering goods with installation or work on real estate in Slovenia.
According to the latest VAT changes, from 22 January 2022 a foreign taxable person performing a supply with installation or works on real estate in Slovenia or any other taxable supply in Slovenia may designate a recipient of supplies and services, registered for VAT purposes in Slovenia as a VAT payer (expansion of reverse charge system).
A recipient can be a local company or a foreign entity, as long as it has a valid VAT number in Slovenia. A non-resident taxable person in Slovenia does not have to identify himself for VAT purposes in Slovenia and is still entitled to deduct input VAT charged in Slovenia. Input VAT is refunded via an electronic communication channel at the tax administration in his resident country.
The simplification rule does not apply where a non-resident taxable person in Slovenia supplies goods or services:
- to a person who is not a taxable person for VAT purposes, such as a small taxpayer or end customer, or
- to a taxable person with a VAT ID number in Slovenia based on special arrangements under the local VAT Act, such as the VAT ID no. only for the purpose of supplying/receiving services in the EU (atypical taxable person).
Submission of issued and received invoices at first VAT-O return no longer necessary
An important change for accountants is the abolition of the obligation for taxpayers who submit a VAT return for the first time to enclose with the first VAT-O return:
- a list of received invoices,
- a list of issued invoices, which are the basis for compiling the first VAT return.
If you need more information on the most recent VAT changes or other tax news in Slovenia, please visit the website of WTS Slovenia and contact the local experts of WTS Global for Slovenia.