Entitlement to Value Added Tax Refund

The tax refund to the foreign representatives enjoying privileges and immunities under international law is governed by Sections 61 and 62 of Act of the Value Added Tax Act (Act No. 222/2004, as amended). The group of the persons eligible for exemption from value added tax (VAT) includes, in accordance with Section 61(2)(a) to (h) of the VAT Act, the diplomatic missions, diplomatic staff, members of the administrative and technical staff of diplomatic missions, consular posts, consular officers, consular employees, as well as international organizations and their personnel, provided that they are not Slovak nationals and do not have domicile in the Slovak Republic.

The entitlement to VAT refund does not apply to family members of the above-mentioned group of persons.

VAT refund may be claimed for all types of goods and services. The essential condition for tax return to a foreign mission is its accreditation to the Slovak Republic, its seat in the Slovak Republic, a bank account opened in the Slovak Republic, and the provision of a similar advantage under the reciprocity principle. Under Section 61(3) of the VAT Act tax refund is provided only to foreign representatives of those states which afford the same treatment of the nationals of the Slovak Republic and only to the extent to which such treatment is afforded.

 

The entitlement to tax refund is also granted to non-resident diplomatic missions and their representatives and also to the diplomatic missions of those countries where reciprocity cannot be confirmed due to the fact that the Slovak Republic does not have a diplomatic representation there.

 

Section 62(3) of the Act sets out the minimum purchase value condition according to which tax refund is only possible on the basis of a receipt for the purchase of goods or services exceeding EUR 33.19, including tax. This limit does not apply to receipts for the purchase of car fuel.

 

Section 61(14) of the Act sets a limit applicable to the refund of tax paid on delivery of building and construction works. Tax will be refunded only if the price does not exceed EUR 3,319.39. If the limit is exceeded, tax refund is only possible if the sending state confirms to the Ministry of Foreign and European Affairs of the Slovak Republic the granting of entitlement to tax refund or a similar treatment to the same extent to Slovak diplomatic missions and consular posts established in that country.

 

The limits applicable to the refund of tax paid on the goods and services, vehicles and car fuels for individual categories of foreign representatives are laid down in Sections 61(4) to (12) of the Act. In the case of diplomatic missions and consular posts having their seat in the territory of the Slovak Republic, these limits do not include the tax paid on vehicles and car fuel (up to 4,000 liters a year per passenger vehicle), and on building and construction works. For the diplomatic staff, consular officers and the administrative and technical staff of diplomatic missions and consular employees, these limits do not include the tax paid on passenger vehicles and car fuel (up to 3,200 liters a year per vehicle).

 

Tax refund for a passenger vehicle

The rules are laid down in Section 61(13) of the VAT Act under which foreign representatives who claimed a refund of the tax paid in the price of a passenger or utility vehicle are obliged to use such vehicle in the country of their posting for a period of at least two years. If their posting in the Slovak Republic ends prior to the expiration of two years following the vehicle’s registration, they are obliged to return to the competent tax authority a proportionate part of the tax corresponding to the remainder of the two-year period. However, if a foreign representative sells or donates the motor vehicle prior to the expiry of the two-year period (except for cases where the vehicle is sold or donated to another foreign representative), they are obliged to return the entire tax to the tax authority. Likewise, the obligation to return the entire tax applies to the fleet vehicles of diplomatic missions for which the diplomatic mission had claimed tax refund and which were then sold or exported from the Slovak Republic prior to the expiry of the two-year period.

 

The periodicity of tax refunds is governed by Section 62(1) of the VAT Act, under which a foreign representative may claim tax refund always for a period of one calendar quarter and must do so no later than in the calendar quarter following the calendar quarter in which the goods or services were supplied, otherwise the entitlement to refund becomes void (Section 62(6) of the VAT Act). Subject to reciprocity, this period may be extended.

 

The tax refund application must be filed with the Bratislava I Tax Office on the prescribed form, along with a certificate issued by the Ministry of Foreign and European Affairs of the Slovak Republic confirming that the condition of reciprocity pursuant to Section 61(3) of the Act is satisfied (Amendment No. 651/2004 to the Value Added Tax Act, as amended by Act No 350/2004), within 30 days of the end of the calendar quarter. Three types of forms are used, namely application for tax refund based on receipts for the purchase of goods and services (including the tax for the purchase of car fuels), application for tax refund based on receipts for the purchase of passenger and utility vehicles, and application for tax refund based on receipts for the purchase of construction works (over EUR 3,319.39).

 

The tax refund application must be appended to the original invoice or another document evidencing the purchase of goods or services which indicates the amount of the tax and confirms its payment (Section 62(2) of the VAT Act). Subject to reciprocity, the tax authority may allow a diplomatic mission to append to the refund application, instead of the original invoice or another original document, a copy of those documents confirmed by the head of the mission or by the head of the consular post (Section 62(2) of Act No 523/2005, which amends the VAT Act), or a copy of a bank statement, or a copy of a credit card payment statement.

 

Under Section 62(5) of the VAT Act, the tax authority shall refund the tax to the foreign representative to an account with a bank in the Slovak Republic within 60 days of filing the tax refund application for the respective calendar quarter.

 

Entitlement to the refund of excise duty on mineral oil

The refund of excise duty on mineral oil to the foreign nationals enjoying privileges and immunities under international treaties is provided for by the Act on Excise Duty on Mineral Oil (Act No 98/2004, as amended by Act No 667/2004). The entitlement to the refund of excise duty on a demonstrably taxed mineral oil, pursuant to Section 16(2)(a) to (g) of the Act, applies to the diplomatic missions, diplomatic staff, members of the administrative and technical staff of diplomatic missions, consular posts, consular officers, consular employees, as well as international organizations and their personnel, provided that they are not nationals of the Slovak Republic and do not have domicile in the Slovak Republic. The entitlement to the refund of excise duty on mineral oil does not apply to family members of the above-mentioned group of persons.

 

The principle of reciprocity applies. Pursuant to Section 16(3) of the Act, the excise duty will be refunded only to foreign representatives of those states that refund such excise duty or afford similar treatment to the nationals of the Slovak Republic.

 

The extent of the refund of excise duty on mineral oil is governed by Sections 16(5) to (7) of the Act. The precondition for the refund of excise duty on mineral oil used as a car fuel is – as opposed to the refund of VAT paid in the price of car fuel – the registration of the passenger/utility vehicle in the Slovak Republic under diplomatic license plates EE or ZZ.

 

A diplomatic mission, consular post, international organization and their regional office with their seats in the territory of the Slovak Republic are entitled, on the basis of Section 16(6) of the Act, to the refund of the excise duty on a demonstrably taxed mineral oil used as a fuel for heating their premises.

 

The periodicity of tax refunds is governed by Section 16(8) of the Act based on which a foreign representative may file the excise duty refund application for a period of one calendar quarter within 30 days of the end of the calendar quarter (Act No 667/2004, amending and supplementing Act on Excise Duty on Mineral Oil).

The refund application must be filed with the Bratislava Customs Authority on the prescribed form, along with a certificate issued by the Ministry of Foreign and European Affairs of the Slovak Republic confirming the conditions of reciprocity is met pursuant to paragraph 3 (Act No 667/2004 amending and supplementing Act No 222/2004 on the Excise Duty on Mineral Oil), a document evidencing the acquisition of a demonstrably taxed mineral oil in the tax jurisdiction and a document evidencing the payment of excise duty in the price of the mineral oil (Section 15(4)). The original document may be substituted by a copy authenticated by the head of the mission, by the head of the consular post, or by another duly authorized representative (this applies to diplomatic missions, consular posts, and international organizations that concurrently claim value added tax refund).

Under Section 16(11) of the Act, a foreign representative must claim refund no later than in the calendar quarter following the calendar quarter in which the mineral oil was purchased, otherwise the possibility of claiming tax refund becomes void.

Under Section 16(10) of the Act, the customs authority will refund excise duty to the applicant within 30 days of completing the verification of the grounds of the refund claim.

 

Entitlement to the refund of excise duty on electricity, coal, and natural gas

Specific provisions for the exemption from excise duty on electricity, coal, and natural gas used by the foreign nationals enjoying privileges and immunities under international treaties are stipulated in Section 40 of the Act on the Excise Duty on Electricity, Coal, and Natural Gas (Act No 609/2007), amending and supplementing Act on the Excise Duty on Mineral Oils (Act No 98/2004). The provisions of Sections 40(1)(a) and (b) apply to foreign representatives, including the diplomatic missions, consular posts, and international organizations and their regional offices having their seat in the territory of the Slovak Republic.

 

The principle of reciprocity applies. Pursuant to Section 40(3) and (4) of the Act, the exemption is granted only to foreign representatives of those states that afford similar treatment to the nationals of the Slovak Republic.

 

The conditions under which a diplomatic mission or a consular post having their seat in the territory of the Slovak Republic may use tax-exempt electricity, coal, or gas are laid down in Section 40(5) of the Act. It provides that a foreign representative must request the Ministry of Foreign and European Affairs of the Slovak Republic for the issuance of a certificate confirming his standing as foreign representative and that the condition of reciprocity is met. The certificate must then be delivered to the respective supplier of electricity, coal or natural gas no later than on the first consumption of the tax-exempt electricity, tax-exempt coal or tax-exempt natural gas (Section 40(6) of the Act).

 

In accordance with this Act, foreign representatives are granted direct tax exemption.

Last updated: Mon Feb 01 14:32:50 CET 2016 Create Date: Mon Feb 01 14:26:25 CET 2016