After the government’s proposal for an amendment to the Value Added Tax (VAT) Act, which brings some simplifications, such as the abolition of compulsory paper invoicing, was rejected in July, the government now approved a proposal for a new amendment to the law at its 255th correspondence session on Thursday, with the intention of simplification and administrative relief for taxpayers and the tax authority. Economists Dr Igor Masten and Dr Matej Lahovnik agree that this is mainly an administrative relief. “This is an environmentally, consumer- and entrepreneur-friendly measure,” Lahovnik pointed out.
In addition to abolishing the mandatory issuance of paper invoices, the amendment also provides for the abolition of the threshold for mandatory entry of farmers into the value-added tax system while maintaining the possibility of claiming a flat-rate compensation or voluntary entry into the value-added tax system. Today, it is considered that obligatory taxpayers are the farmers whose turnover from the basic activity amounts to over 7,500 euros per year. It also allows for the deduction of value-added tax for personal motor vehicles for the performance of activities, namely for vehicles without carbon dioxide emissions.
Taxpayers will no longer be required to submit a list of received and issued invoices at the first VAT return, and greater flexibility will be provided to the tax authority to clarify the fields of value-added tax that taxpayers must submit via the eDavki (eTaxes) system. According to the Ministry of Finance, it will not only simplify and administratively relieve the taxpayers and the tax authority but also follow the goals of environmental policy.
The aim of the proposed amendment is to implement the principle of VAT taxation in the Member State of consumption (Member State of destination), meaning, at the rates applicable in Slovenia, including distance supplies of goods from third territories or imported goods from third countries. The proposal also abolishes VAT exemptions on goods in consignments of insignificant value imported into Slovenia from third territories or from third countries.
We should aim for as many transactions in electronic form as possible
According to Dr Matej Lahovnik, this is not some revolutionary proposal, but it is moving us closer towards fewer administrative restrictions. “It is an environmentally, consumer- and entrepreneur-friendly measure.” According to Lahovnik, there is no logic in keeping the system as it has been so far, so, in case someone pays with a credit card and the transaction can be traced, there is no reason why they should also have to receive a paper invoice unless the consumer wants it because of the warranty or something like that.
Lahovnik defends the position that in Slovenia, we should strive to have as many transactions in electronic form as possible. It is necessary to strengthen the control over cash payments because the grey economy is strongest there. With electronic transactions, things need to be simplified as much as possible because they are always traceable. “It is a step towards a more friendly business for consumers, entrepreneurs and, above all, the environment. After all, many people reject the paper invoices, and they are then found littering the streets and squares.”
Administrative facilities that reduce costs to some extent
In the case of payment by card, issuing an invoice is unnecessary, Lahovnik points out, adding that a similar regime is already in place in Austria. “A while ago, when I was skiing in Austria, they asked me if I needed the paper invoice when I paid with my credit card. After all, the transaction is dully recorded.” Dr Igor Masten agrees with Lahovnik that this is mainly an administrative relief. “Additional deductions for farmers and electric vehicles reduce costs to some extent to make the matter more friendly. Especially if there is no need to issue the invoices in physical form, all this is also cheap to a certain extent.”
According to the Government’s Communication Office, the amendment proposed by the Ministry of Finance transposes several European directives governing certain VAT obligations in the provision of services and the sale of goods at a distance.
Nina Žoher
