Slovak National Council Approves Tax Reforms

The Slovak National Council has approved a major legislative package amending the VAT Act and several related laws. The primary measures are effective from 1st January 2026, although some key provisions, such as mandatory e-invoicing, will be implemented in later phases. This reform is a part of a broader fiscal consolidation effort and aligns with the EU’s ViDA (VAT in the Digital Age) initiative.

Key Provisions Effective 1st January 2026
The immediate changes focus on strengthening the powers of the financial administration and adjusting specific tax rules:

Mandatory VAT Grouping:
Tax authorities gain the power to register two or more formally independent but economically interconnected entities as a single VAT group to prevent tax evasion. A new VAT ID will be assigned to the group, and individual IDs will become invalid.

Enhanced Tax Authority Powers:
Tax authorities are now permitted to conduct search activities outside their usual territorial jurisdiction and can impose preliminary measures to withhold tax overpayments or excessive deductions if non-payment is a concern.

VAT Deduction on Vehicles:
New rules for VAT deduction on business vehicles are introduced. A flat-rate 50% VAT deduction is allowed for vehicles used for both business and private purposes (including related expenses like fuel and maintenance) without needing detailed mileage records. A 100% VAT deduction remains possible for vehicles used exclusively for business, subject to stricter documentation.

VAT Rate on Unhealthy Foods:
A range of processed food products with high sugar or salt content will move from the reduced 19% VAT rate to the standard 23% rate.

Tax Amnesty:
A tax amnesty period will run from 1st January to 30th June 2026, allowing taxpayers to settle outstanding tax liabilities (recorded as of 30th September 2025) without incurring penalties or late-payment interest.

Future Implementations
The Act also outlines future changes to implement digital taxation:

Mandatory Electronic Invoicing (e-Invoicing):
Starting from 1st January 2027, all domestic VAT-registered taxpayers will be required to issue and receive invoices in a structured electronic format that complies with EN 16931 standards.

Real-Time Data Reporting:
From the same date (1st January 2027), real-time electronic invoice data reporting to the financial administration will be mandatory.

Cross-Border Reporting:
The mandatory e-invoicing and real-time reporting will extend to cross-border supplies from 1st July 2030.

Abolishment of Control Statements:
The requirement to file VAT control statements will be abolished as of 1st July 2030.

These reforms signify a comprehensive overhaul of Slovakia’s tax landscape, aiming to enhance fiscal stability and modernize tax administration processes.