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The rules of Tax exemption
Our company is located in Slovakia, a member state of the EU.
As our export grows, often comes the question when are we allowed to issue an invoice with 0% VAT and when are we bound to add 20% local VAT?
The rules are pretty simple:
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Local sales (buyer is located in Slovakia) we use 20% local VAT.
- Sales to another member state of the European Union to a buyer that has a valid EU VAT ID* - we can apply 0% VAT.
- Sales to another member state of the European Union to a buyer that has NO EU VAT ID - we must apply 20% VAT (a typical case when a buyer is a private person).
- Sales to a non-EU country: 0% VAT (we must prepare customs declaration documents).
* A value added tax identification number or VAT identification number (VATIN) is an identifier used in many countries, including the states of the European Union, for value added tax purposes. In the EU, a VAT identification number can be verified online at the EU's official VIES website.
Any questions, or doubts? Contact us!