Upcoming numerous changes in the field of VAT

Special scheme for small enterprises 

For taxable persons based in Slovenia, who will use the VAT exemption only for domestic supplies on the territory of Slovenia, there will be no changes in the method of claiming the exemption nor will any new obligations arise with the transfer of Directive 2020/285/EU regarding the Special scheme for small enterprises. For them, there will only be additional relief due to the increase in the annual turnover threshold for mandatory VAT identification in Slovenia from 50.000 EUR to 60.000 EUR. With a revised special scheme, taxable persons who use the VAT exemption and gradually increase their turnover will be given a transitional period. For this purpose, these taxable persons are enabled, when they exceed the annual turnover threshold of 60.000 EUR, to continue to use the tax exemption in the current calendar year up to a total turnover of 66.000 EUR. 

With the transfer of the Council Directive 2020/285/EU regarding Special scheme for small enterprises, new rules are also established for taxable persons with a headquarters or, if they do not have a headquarters, a permanent or habitual residence in Slovenia, who will wish to use the right to be exempt from VAT on supplies of goods and services in another EU Member State or other EU Member States that allow exemptions for small businesses in their national VAT regulations. A taxable person based in Slovenia will be entitled to exemption from VAT calculation in another EU Member State or other EU Member States if, in the current and previous calendar year, he will not exceed a turnover of more than 100.000 EUR in the territory of the Union; in the current and previous calendar year in a EU Member State, in which it intends to use the exemption, has not exceeded a turnover above the amount determined by that EU Member State and has not exceeded that amount even in the preceding year, if that EU Member State so determines; and is identified for the use of the cross-border VAT exemption with an individual identification number in accordance with VAT Act. In accordance with these rules, the cross-border exemption from VAT calculation in other EU Member States could also be used by a taxable person based in Slovenia who does not use the exemption for small enterprises on the territory of Slovenia and is identified for VAT in Slovenia.

With the transfer of Council Directive 2020/285/EU regarding Special scheme for small enterprises, new rules are also established for taxable persons based in another EU Member State who will wish to use the right to exemption from VAT calculations on the supply of goods and services on the territory of Slovenia. A taxable person based in another EU Member State will be entitled to an exemption in Slovenia if, in the current and previous calendar year, he did not exceed turnover of more than 60.000 EUR in the territory of Slovenia and is identified for the use of the cross-border exemption from VAT calculation with an individual identification number in the EU Member State of his headquarters, whereby the total annual turnover in the Union does not exceed 100.000 EUR.

Revised rules for the application of the Special scheme for small enterprises will come into force on 1st January 2025.

VAT rates

With the transfer of Council Directive 2022/542/EU regarding VAT rates, the definition of reduced VAT rates, which are specified in Annex I and Annex IV of the VAT Act, is harmonized with the revised Annex III of Council Directive 2006/112/EC. 

The proposed amendments to Annex I simplify the application of a reduced VAT rate for medical equipment and supplies (use for products normally used in healthcare or for the use of disabled persons) and in accordance with the limitation of Council Directive 2022/542/EU regarding VAT rates limits the use of a reduced VAT rate for phytopharmaceuticals and artificial fertilizers from 31 December 2031 onwards. 

The use of the margin regulations by a taxable reseller for supplies of art objects is also limited, as the condition for the optional use of the margin regulations is that the previous supply was not taxed at a reduced rate. These changes come into effect on 1st January 2025. 

Additionally, it is also foreseen the use of the general VAT rate for drinks with added sugar or sweeteners for which a lower VAT rate currently applies. 

In addition, the draft law regulates the possibility that, in the event that the European Commission grants Slovenia the use of VAT exemption for goods imported for the benefit of victims of natural disasters, the acquisition of these goods within the Union or the supply of these goods on the territory of Slovenia is also exempted under the same conditions with the right to deduct input VAT. The exemption also applies to services related to such goods.

Records of calculated VAT and deducted VAT

The draft law specifically defines the obligation to keep records of calculated VAT and records of deducted VAT. It also stipulates the obligation to provide data from these records to the tax authorities. 

Data from these two records are maintained by the taxable person already based on the applicable legislation, only the structure and method of record keeping are not prescribed in detail by the VAT legislation. Some taxable persons keep records electronically. For these taxable persons, in accordance with the Rules on the content, form, method and deadlines for the submission of the extract of data from the electronically managed business books and records of the taxable person, the structured content and format of the file on calculated VAT and deducted VAT are prescribed. With the revised regulation, such records in structured content and form are prescribed for all taxable persons identified for VAT purposes.

VAT groups

By introducing the possibility of identifying a VAT group it will be possible for otherwise independent taxable persons who are closely connected financially, economically and organizationally to be able to identify themselves for VAT purposes and, in this regard, exercise their rights and fulfil their obligations as one taxable person identified for VAT purposes. 

The provisions relating to the implementation of the VAT groups shall apply on 1st January 2026.

VAT deduction in case of VAT calculation after paid realization

A new rule is established regarding the right to deduct VAT in cases where a taxable person, who otherwise calculates VAT after invoiced realization, buys goods or services from a taxable person who uses a special regulation for calculating VAT after paid realization. In these cases, the taxable person may deduct VAT only when he pays this VAT to his supplier or contractor. For this purpose, a taxable person who uses a special arrangement for calculating VAT after paid realization will have to indicate "Special regulation - paid realization" on the invoice.

Exemption from the obligation to issue invoices

The exemption from the obligation to issue invoices is extended to all types of vending machines, so that it covers both the sale of goods and the sale of services through vending machines.

Transfer of VAT surpluses

The transfer of VAT surpluses to the next tax period and the possibility of submitting claims for the refund of VAT surpluses are limited to a period of five years from the submission of the VAT return. By establishing a transitional provision, it is specifically regulated that this limitation of five years applies only to VAT surpluses established by VAT returns for tax periods from 1st January 2025. From the point of view of ensuring legal security and predictability of taxable persons, for all existing VAT surpluses, in the tax periods prior to the entry into force of this law, it sets a limit on the transfer of surpluses and submission of VAT refund claims until 31 December 2030, i.e. for a period of five years from the entry into force of the amendments to the law.

PwC team in Slovenia is qualified to provide valuable and comprehensive service!

• Correct VAT reporting: our team of tax experts ensures correct and timely preparation of VAT returns and other related records.
  
• Consulting on more complex matters: our tax experts regularly monitor the relevant legislation and practices, enabling clients to avoid potential issues and be compliant at every step.
  
• Multidisciplinary approach: our tax and financial advisors can also help you solve other related challenges. In this way, you can ensure a comprehensive solution to any related challenge in your company.
  

Contact us, we are happy to help. With our support, you will make informed decisions and improve business efficiency.