Value added tax, or VAT in short, is basically a consumption tax. It also means that it is paid at each stage or for each individual movement of the same kind of goods or services. VAT is also a sales tax – so it is calculated when the transaction is made. Entrepreneurs who start their business in Europe tend to inquire about value added tax and how it relates to sales in Europe.
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Who has to become a VAT payer? Is it mandatory to become VAT payer?
A company must become liable for VAT if they exceed 50.000 EUR of taxable turnover in 12 consecutive months. You must also become a value added tax payer in the case of the total amount of intra-Union acquisitions of goods in the current calendar year exceeds the limit of 10.000 EUR.
You would also have to become a VAT payer if your company has a business seat in Slovenia, but conducts business on the territory of another EU member state.
The Financial Administration of Slovenia issues a VAT number for your company and the VAT payer must start charging the prescribed VAT to domestic customers and natural persons from another EU Member State. A large number of entrepreneurs never become VAT payers – because they do not need to be or it does not actually pay off for their particular business activity.
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What value added tax rates do we know in the Republic of Slovenia?
As of 1 July 2013, two VAT rates are applicable in the Republic of Slovenia, amounting to:
– an overall rate of 22%
– a reduced rate of 9,5%.
An amendment to the Value Added Tax (VAT) Act, which applies to the supply and rental of books, newspapers and periodicals on both physical and electronic media, also entered into force on 1 January 2020. Thus, instead of 22 or 9,5 % VAT, 5% VAT is charged on the supply and rental of these publications.
VAT refund and related timelines
To reimburse VAT, taxpayers must submit an application in the online application e-Davki. The taxpayer must also pay attention to the deadlines for submitting applications. This is 30 September following the end of the calendar year in which VAT was charged and 30 June of the current year for VAT paid in the previous year for third countries. The application for reimbursement must relate to a period not shorter than 3 months.
VAT refunds are possible from all EU Member States and from other countries with which reciprocity has been established. Thus, VAT payers can claim a refund of VAT paid abroad for goods and services that they purchased for the performance of their business activity and paid VAT. The application for a VAT refund is also made via the e-Davki online application. However, there are also minimum amounts for which you can claim a VAT refund. The VAT rates vary in EU and other countries.
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In which cases are you exempt from paying value added tax?
Some goods and services are exempt from VAT. This applies to some important categories of goods or services, e.g. for education, health and financial services. A company that issues invoices for such goods or services cannot a refund of VAT, which it only paid when purchasing goods or services directly related to its business. If the company sells such products or services, it does not need to register for VAT.
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Who should be an “atypical VAT” taxpayer and how does this differ from a regular one?
Even in the case of issuing invoices for services rendered to customers / customers in other Member States of the European Union the company must become a special type of VAT payer – ie an “atypical VAT” taxpayer. In these cases, VAT payers only charge VAT on services or goods received from abroad, but they do not charge it when doing business in Slovenia.
You also become an atypical VAT payer if you exceed the limit of purchases of goods within the European Union of 10.000 EUR in the current calendar year, or if you receive services from a company from another EU Member State, or if you provide services to a company from another EU country.
An atypical VAT payer must issue an invoice for services rendered to another country without charging Slovenian VAT. The atypical VAT payer is also obliged to state on the invoice their (Slovenian) VAT ID number, which they use only for foreign transactions, and the mandatory VAT ID number of the recipient (buyer) in another EU Member State. Of course, it does not charge Slovenian VAT, but states a clause that it is a a reversed tax charge.
Do not miss the unique opportunity to learn about company registration in Slovenia. DATA can offer full support to foreign citizens in the value added tax consultation and company registration. Also, you can contact us for more information. Send us an email to data@data.si. You can also call us on +386 1 6006 270, Viber/Whatsapp +386 40 530 718 or skype data.business7.
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