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Slovenia – Changes to value added tax in Slovenia

By February 25, 2022No Comments

On 27 December 2021, the National Assembly adopted Amendments to the Value Added Tax Act (ZDDV-1M). The amendments entered into force on 22 January 2022. 

Below is a summary of the most important new features introduced by the amendments to the Value Added Tax Act. 

Abolition of the obligation to register for VAT in Slovenia for foreign taxable persons who make supplies of goods and services in the territory of the Republic of Slovenia which are subject to reverse charge mechanism 

According to the amended rules, taxable persons who are not established in Slovenia and who make exclusively supplies of goods and services in the territory of the Republic of Slovenia which are subject to reverse charge mechanism (obligation for VAT payment is shifted to the recipient) are no longer required to identify for VAT purposes in Slovenia. Obligation to register for VAT in Slovenia is abolished for taxable persons who make above-described supplies of goods and services only to VAT taxable persons and not to end customers. 

Claiming a VAT deduction for motor vehicles without carbon dioxide emissions 

In the field of motor vehicles, the change is made in order to pursue environmentally friendly solutions and thus to encourage the purchase of electric vehicles without CO2 emissions. The possibility of deducting VAT on purchases of passenger cars, motorcycles, bicycles and similar vehicles with an auxiliary motor intended for the pursuit of an economic activity is introduced, whereby the following criteria must be met at the same time: 

  • The motor vehicle is CO2 emission-free, and 
  • The value of the motor vehicle, including VAT and other charges, does not exceed EUR 80 000. 

If the taxable person purchased such a vehicle before the amendment entered into force and the correction period referred to in Article 69 of the VAT Act (5 years from the date of application) has not yet expired, he may make a correction of the input VAT deduction in proportion for the remainder of the correction period. 

The taxable person may also exercise the right to deduct VAT on the purchase of fuels, lubricants, spare parts and closely related services (e.g., on the rental of the vehicles) in respect of those vehicles. 

Exercising the right to deduct 

The right to deduct VAT may be exercised by the taxable person in the tax period in which the obligation to account for VAT arose if, by the expiry of the time limit for submitting the VAT return for that tax period, he is in possession of an invoice or other document required by law.

A paper invoice should only be given to the customer on request.

A taxable person who is required to issue invoices for supplies of goods or services to an end customer in Slovenia is only required to hand over a paper invoice to the customer on customer’s request. Otherwise, the seller is not obliged to hand over a paper invoice to the end consumer. In any event, the seller still has to issue the invoice and, in the case of cash transactions, validate it for tax purposes under the Act regulating fiscal validation of receipts.

The above information was kindly provided by Petra Košir from PROTOKORP Svetovanje (Slovenia); contact: [email protected].