Services received from the EU

What it means

Receiving a service from the EU means a Slovak company or sole trader buys a service from a supplier in another member state, such as software, advertising on a foreign platform, consultancy or equipment hire. For services between businesses the place of supply is generally Slovakia.

The foreign supplier invoices without VAT, and the Slovak customer accounts for the tax under the reverse charge. This is also called self-assessment: the customer calculates the VAT itself, declares it as output tax and, if entitled, at the same time as input tax.

For a VAT payer with full deduction rights the net effect is zero, but the tax must still be shown in the VAT return and the control statement. A company or sole trader that is not a VAT payer must register under section 7a before receiving the service and pays the VAT without being able to deduct it.

How it works in practice

With new foreign suppliers, especially of digital services, we check with the client that the company is VAT-registered and that the supplier invoices to its VAT number. If the supplier charges its own domestic VAT, the company cannot deduct it in Slovakia and must ask for a corrected invoice or reclaim it through the procedure in the other country.

The tax point for a service received is generally the day the service is supplied, for recurring services the last day of the invoiced period, and for advance payments the day of payment. Invoices in foreign currency are translated at the rate valid on the tax point.

We explain to sole traders who are not VAT payers but buy social media advertising or software from abroad that section 7a registration is mandatory even for small amounts. After that a return must be filed for every period in which tax arose.

What to watch out for

The most common mistake is a forgotten section 7a registration by sole traders and small companies buying services from the EU. Discovering it late means paying back tax for past periods, interest and a fine, even though the individual amounts were small.

Not every service follows the general rule. For accommodation, services connected with property abroad, admission to events or short-term car hire, the place of supply is elsewhere and Slovak self-assessment does not apply. We therefore assess unusual services invoice by invoice.