Section 7a registration

What it means

Section 7a registration applies to a company that is not a VAT payer but receives a service from a supplier in another EU country or supplies such a service into the EU. It registers before the first such transaction.

It does not become a VAT payer: there is no right to deduct and no VAT on domestic invoices. It merely obtains a VAT number for cross-border transactions.

Section 7a registration covers services only; buying goods from another EU country has its own rules for the acquisition of goods from the EU and its own annual limit. It differs from the mandatory registration triggered by turnover in not depending on turnover at all: a single such service is enough.

How it works in practice

In practice this covers social media advertising, cloud services or software from abroad. On a service received the company declares the tax by self-assessment and pays it, with no deduction available.

A return is filed only for months in which a transaction occurred. Supplying a service into the EU additionally requires an EC sales list.

After registration we enter the VAT number in the accounts held with foreign suppliers, such as an advertising account or a cloud service, so invoices arrive without their domestic tax. If the company later crosses the turnover threshold and becomes a VAT payer, the registration becomes a full one and from that day domestic supplies also appear in the VAT return.

What to watch out for

The registration is often forgotten and a company pays for foreign services for years without declaring. The tax is then assessed retrospectively with interest, and there is still no deduction.

If the foreign supplier does not have the VAT number, it invoices with its own domestic tax. The company then pays twice: the foreign VAT, recoverable only through a corrective invoice from the supplier, and the Slovak tax by self-assessment, which arose anyway. Such invoices need catching when documents are processed, not at the year-end close.