Slovenia adopted Act amending the Act Determining the Intervention Measures to Contain the COVID-19 Epidemic and Mitigate its Consequences for Citizens and the Economy (hereinafter “the Act”) on May 1st, 2020, which also includes the legal background for exemption of value added tax (hereinafter “VAT”) for the supply of goods required to deal with the consequences of COVID-19 epidemic outbreak.
Pursuant to the Act, the supply of protective and medical equipment as prescribed by the Government of the Republic of Slovenia (hereinafter “the Government”) is VAT exempt with the right to deduct in the period from March 13, 2020 to July 31, 2020. Exemption applies to the supplies, as well as the EU acquisitions of goods, provided that the following conditions are met:
- The supplies are related to goods as defined by the Government or by Decision of EU Commission 2020/491 from April 3, 2020.
- Goods are intended for:
– free-of-charge distribution to persons affected by, exposed to or dealing with the epidemic outbreak, and given to them by the bodies and organizations listed below, or;
– free-of-charge use of the healthcare providers acting in the capacity of treating the patients affected by the epidemic outbreak, provided that the goods remain in the ownership of the bodies and organizations listed below.
- Goods are supplied to a state authority or organization, a local authority, other body governed by public law or another organization deemed as charitable organization, or goods are supplied for the account of these bodies and organizations, or goods are acquired from another EU Member State by another person for the account of these bodies and organizations.
If the goods are not used by the persons listed above or are used for the purposes other than those listed above, VAT shall be charged and paid. The latter does not apply if the goods are transferred to another organization which is eligible itself for the exemption from VAT.
Additionally, the suppliers are also required to report the usage of this exemption. The supplies should be reported to the Tax Authorities on a monthly basis. The deadline for the submission of the report is the last working day of the month following the month of supply. The report should include the following information:
- VAT identification number, name and address of the supplier (who is using the VAT exemption).
- Serial number, tax number or VAT identification number of a state authority or organization, a local authority, other body governed by public law or another organization deemed as charitable organization, to whom the goods are supplied.
- Tariff number of goods as defined by the combined nomenclature.
- Value, type and amount of goods.
The invoice should include a reference to the article of the Act determining the VAT exemption. The taxable person should obtain a statement from the customer or the entitled person, stating that the customer meets the conditions as prescribed above, keep the relevant records and to enable the Tax Authorities’ supervision.
In order not to deprive anyone of the VAT exemption, the suppliers can correct the invoices and report the VAT exempt supplies in accordance with the conditions described above. This is applicable for all supplies from March 13, 2020 onwards which meet the criteria, and for which the exemption has not been applied yet. Changes should be reported in the VAT return for the tax period in which such invoices are corrected.
It should be noted, however, that the Government has not yet published the list of the products subject to exemption, thus, the taxable persons are not able to exempt the supplies yet. They will be able to adjust the past transactions once the list of goods is known.
If any further explanations regarding the tax treatment of the supplies or EU acquisitions of the protective and medical equipment are required, advisers from A Tax International are available to assist you. Find us at www.ataxint.com or follow us on Linkedin.