Services supplied to the EU

What it means

Supplying a service to the EU means a Slovak company or sole trader provides a service to a customer in another member state. For VAT the decisive factor is the place of supply, which determines in which country VAT is due and who pays it.

For services to businesses the general rule applies: the place of supply is the country where the customer is established. The Slovak supplier therefore invoices without Slovak VAT, and the customer accounts for VAT in its own country under the reverse charge. The invoice must say so explicitly.

For services to consumers the place of supply is generally Slovakia, but there are many exceptions. Electronic, telecommunications and broadcasting services are taxed in the customer’s country, as are services connected with property, admission to events and some transport services.

How it works in practice

Before the first invoice we check in VIES that the customer has a valid VAT number and keep the result. This shows that the customer was a business and the service could be supplied without Slovak VAT.

Services supplied to businesses in the EU are reported in the VAT return and in the EC sales list for the period in which the service was supplied. The EC sales list is matched against the customer country’s data, so amounts and VAT numbers must agree.

A sole trader who is not a VAT payer must register under section 7a before supplying such a service. For services to consumers in other states, especially electronic ones, we set up the OSS scheme with the client so that they do not have to register in every country.

What to watch out for

The most common mistake is an invoice without Slovak VAT to a foreign customer who has no valid VAT number or is a consumer. In an audit the tax office will assess VAT on the full amount, and the supplier often cannot recover it from the customer.

Not every service follows the general rule. For construction work, letting property, accommodation or services at trade fairs, the place of supply is where the property or event is located, and the supplier may need to register in another state. We therefore assess each new type of service separately.