VAT registration of a foreign person

What it means

VAT registration of a foreign person is the obligation of a business without a seat in Slovakia to register for Slovak VAT if it makes supplies here on which the customer cannot account for the tax. Typical cases are sales of goods from a Slovak warehouse, supplies with installation, or property-related services to non-VAT payers.

The application must be filed before such activity starts, regardless of turnover. Unlike domestic businesses, a foreign person is not subject to a turnover threshold; what counts is the type of supply and where it is taxed under the place of supply rules.

If the customer is a Slovak VAT payer and the supply falls under the reverse charge, the foreign person often need not register. For distance sales of goods to EU consumers, the OSS simplification replaces registration in each member state.

How it works in practice

A foreign company that stores goods in Slovakia and sells them to customers here needs a Slovak VAT ID, files returns and control statements here and deducts input VAT. The same applies when it moves its own goods into a Slovak warehouse.

A person from a third country may be required or permitted to act through a tax representative who meets its obligations towards the tax authority. EU businesses need no representative, although a local adviser is often used in practice.

Before entering the Slovak market, map all flows of goods and services and assess which supplies require registration. Late registration means paying tax for past periods, even if the foreign company never charged it to its customers.

What to watch out for

Failing to register brings a fine and additionally assessed tax with interest. An unregistered foreign person also cannot deduct input VAT, so the tax on its purchases becomes a cost.

If a foreign company has a fixed establishment in Slovakia, its position changes and a turnover threshold and other rules may apply. Whether a fixed establishment exists is a technical question that must be assessed case by case.