Tax representative

What it means

A tax representative is a person registered in Slovakia who discharges the VAT duties of a foreign supplier. The foreign company then needs neither its own registration nor an establishment in the country.

This is not the same as an agent in tax proceedings. An ordinary power of attorney only lets someone act for a taxpayer, whereas a tax representative enters the relationship under its own registration number and its own liability.

The scope of representation is narrow and covers only VAT on the supplies the representative has taken on. It does not take over the foreign company’s income tax or its other duties in Slovakia; whether and how it is taxed on profit here is assessed separately under the rules for a non-resident.

How it works in practice

The typical case is import of goods released into free circulation at a Slovak customs office and moving straight on to a customer in another member state. The representative secures the import exemption and reports the onward supply in its own filings.

For sales to end customers across the EU, most firms now manage with the OSS scheme and need no representative. Nor should the role be confused with a customs representative, who handles the declaration, not the tax.

Before the first import we agree with the foreign client which transport documents we will receive and by when: the transport document, confirmation that the goods arrived in the destination state, and the customer’s valid IČ DPH checked in VIES. Without them the representative cannot defend the import exemption.

What to watch out for

The representative is liable for the tax of the persons it represents alongside them. If an audit shows the goods never left Slovakia, the tax is assessed on the representative, who will usually never recover it from the foreign client.

The onward supply to another member state belongs in the EC sales list. If it is left out or filed late, the office imposes a penalty, and the data will not meet what the customer declared in the destination state; the mismatch then raises questions with both tax administrations at once.