Financial Administration of Republic of Slovenia (hereinafter FURS) issued explanation No. 0920-5312/2020 on April 15, 2020 regarding the VAT treatment of personal assistance services as defined by Personal Assistance Act (hereinafter ZAO). So far, these services have been subject to standard-rated VAT (at 22%). However, based on the additional information from Statistical Office of the Republic of Slovenia (hereinafter SURS) regarding NACE classification of personal assistance services, the stated position has changed, and the following rules apply:
More demanding assistance services rendered to user for all those tasks and activities which the user cannot perform independently due to the level and type of disability, but which are necessary on a daily basis, either at home or elsewhere in order to live independently, actively and in social equality according to ZAO, for which the appropriate NACE classification is:
- 88.109 – Other social work activities without accommodation for the elderly and disabled and
- 88.999 – Other social work activities without accommodation n.e.c.,
are exempt from VAT pursuant to point 6, paragraph 1, Article 42 of VAT Act (ZDDV-1) (or Article 43, in connection with point 6, paragraph 1, Article 42 of VAT Act).
Other personal assistance services defined by ZAO which are not included in NACE Q/88 classification are subject to reduced VAT rate at 9.5%.
FURS clarifies that the original position was adopted based on explanation from SURS that the personal assistance services are NACE classified as 96.090 (Other personal service activities n.e.c.). As a consequence, these activities were not VAT exempt according to VAT Act and The Rules on Implementation of the VAT Act.
As the definition of personal assistance as provided by ZAO is essentially very similar to the activity defined in NACE code 88.109 (Other social work activities without accommodation for the elderly and disabled), SURS was asked to re-classify these services in accordance with ZAO.
It should be noted that based on the explanation from SURS, personal assistance services, such as simple assistance to the elderly at home and accompanying the elderly, are classified under 96.090 (Other personal service activities n.e.c.). However, more demanding services as clarified above, should be classified as 88.109 (Other social work activities without accommodation for the elderly and disabled) and 88.999 (Other social work activities without accommodation n.e.c.).
Hence, all personal assistance services provided in accordance with ZAO should be assessed on the basis of the content of services, namely it should be determined on a case-by-case basis whether the provision of the service is a simple aid or a more demanding assistance. The content then determines NACE classification, and consequently whether the provision of service should be considered as subject to VAT or VAT exempt.
Personal assistance services defined by ZAO, which are not classified under NACE code Q/88 and are therefore not entitled to VAT exemption on the basis of point 6, paragraph 1, Article 42 of VAT Act (or Article 43 of VAT Act in connection with point 6, paragraph 1, Article 42 of VAT Act), are subject to reduced VAT rate at 9.5%, as they are nevertheless services in relation to the assistance or care for the elderly, sick or disabled persons, for which the reduced VAT rate (at 9.5%) applies pursuant to VAT Act.