Slovakia – Requirement to only make tax invoice payments to published bank accounts

In November 2021, new legislation was introduced in Slovakia requiring Slovak VAT registered businesses to report their bank accounts (both domestic and foreign) to the Slovak Financial Directorate via a published form on its website. There was a short two-week period for businesses to provide this information ahead of the deadline, and the bank accounts for each taxpayer were published on the Financial Directorate’s website with effect January 2022. 

Who is affected? 

This new reporting obligation applies to all Slovak taxpayers (with the exception of payment service providers’ bank accounts merely used for the processing of payment transactions). Under the new legislation, incorrect, false, or incomplete bank account information will be subject to a penalty of up to EUR 10,000. In addition, the Slovak tax authority will only make a refund of excess input tax to bank accounts that have been notified and listed. Where a taxpayer fails to report any bank account, a refund payment will be withheld.

The bank accounts have now been published on the website as well as the Slovak OpenData FS API portal. This will allow API connections and calls to be made so that businesses can automate the process of obtaining and validating bank account details.

What do the changes mean? 

Customers will now have joint liability for VAT where they make a payment for an invoice into a supplier’s bank account other than the ones officially published on the website. Therefore, in order to avoid joint liability, businesses must ensure they only pay tax invoices received from suppliers to the supplier’s bank accounts that are listed on the website on the day the payment instruction is submitted. Businesses in Slovakia are therefore advised to review the bank accounts held in their systems and payment instructions, as well as bank accounts listed on tax invoices. In addition, recovery of the VAT as input tax is also now linked to making payment to the relevant published bank account.

Reducing fraud  

This measure is aimed at reducing fraud and maximising VAT collection, as well as providing more transparency to the tax authorities over the bank accounts used by businesses, including where these are overseas and in foreign currencies.  It has just been reported that in 2019, the VAT Gap in Slovakia was EUR 1.31 billion (16.1%). In addition to this bank account measure, Slovakia has also just launched its new e-invoicing system – “Informačný Systém Elektronickej Fakturácie (IS EFA). Electronic invoicing is initially mandated for B2G, G2G and G2B transactions from January 1, 2022 with a planned extension to B2B and B2C transactions from January 1, 2023.

Find out more about Avalara's e-invoicing solutions.