Vat payer or non-payer

Vat payer or non-payer

Do you set up s.r.o. and do not know if you should be a VAT payer or not? Or do you already have a company and do not know what it entails to be a VAT payer, or would you just like to know if it would be more advantageous for you?
Each company is a VAT payer when it is established. Vat payers can become a company in two ways: compulsory and voluntary registration.

Mandatory registration

If you achieve a turnover of 12 consecutive months in the amount of more than €49,790, you are obliged to register under Section 4(1) of the VAT Act within 20 days after the end of the month in which you achieved your turnover as a VAT payer. The DS will invite you to check and, after examining the documents, issue a certificate and, if necessary, provide for a security*. After registration, the taxpayer is a monthly VAT payer. If you do not exceed 100K turnover after 12 months after registration, you can apply to the DÚ for a change to a quarterly VAT payer pursuant to Section 77 of the VAT Act. Attention, turnover is not zeroed at the beginning of the year, but counts every month for the last 12 months.

Voluntary registration

If you do not qualify for compulsory registration and need to be a VAT payer (for example, you sell goods to VAT payers) or simply want to be VAT payers, you can also apply for voluntary VAT registration under Section 4(2) of the VAT Act. The application for voluntary VAT registration must be evidenced by documents proving an economic activity or by proof of preparatory activity.

Purchase and sale within the EU

If you purchase services within the EU (most often Google and Facebook ads), you must register as a VAT payer under §7 and §7a respectively. Once the certificate is issued, you will purchase services without VAT, but you must submit a VAT return and pay VAT each month. Attention, in the case of a service, registration is mandatory prior to delivery of the service (e.g. facebook advertising, google ads, etc.). This type of registration negatively affects the delivery of services from outside the EU, which, if you are registered under §7/§7a, must also be delivered, making them overpriced for you. Mandatory registration is also valid for purchases of goods over €14000.

Sale, construction of houses and apartments

If you are building a house or apartment and plan to sell it and the proceeds exceed the turnover of €49,790, you have a reporting obligation under §4 para. 4 within 10 days of receiving even a partial payment or delivery of the building (which occurs earlier) if the total price exceeds €49,790. You become a VAT payer by accepting a payment or delivery and the sales price must be increased by VAT. In the case of house construction, it is therefore preferable to become a VAT payer as soon as possible. You will be able to deduct VAT on purchases right from the start of construction. If you apply only before the sale, you can claim VAT, but in the case of building a house for 100000€ you will be obliged to 20000€ in VAT throughout the construction.

What's more convenient for me?

In principle, if you sell services to individuals who do not pay VAT, it is better for you to be a VAT non-payer, on the contrary, if you sell the goods to a VAT payer and there is therefore a presumption that you buy these goods from VAT payers, if you are not VAT payers, you will lose 20% on each item. Either you will have a 20% lower profit than the competition or you will have 20% higher prices with the same profit. If you sell services or goods to both payers and non-payers, the result will be tighter. For example, the decision to inseize it in favour of a VAT payer may be the purchase of a vehicle, a machine, real estate, etc., which is vat-induishable.


You purchase and sell goods to both VAT payers and NON-VAT payers.

We will compare what your profit will be if you are or will not be a VAT payer:

In both cases, the supplier will sell you the goods for 12000€ (A * I am not the payer 12000, B – I am the payer of 10000+2000) the price of the supplier does not change as he is the payer regardless of us.

You will reseal it to a natural person for €24000 (€24000, €20000+4000) for fo is an important resulting amount.

You will therefore be profitable in the case of A 12000€ and in the case of B 10000€.

If you sell the goods to VAT payers (A 20000€ B 20000+4000€) for the VAT payer, the taxable amount is important as it will ask for the tax paid to be refunded.

Your profit will be as follows A 8000€, B 10000€

The differences are therefore 20 in your favour, but also to the detriment. Most of course it is somewhere in between, but you can always calculate what is more convenient for you.

Ing. Ján Svočák
Author of the article
Managing director of the company, tax advisor and entrepreneur in the field of business consulting and administrative services for small and medium-sized companies. He graduated from the University of Economics in Bratislava and has been involved in consulting, taxation and accounting since 2007. He speaks fluent English.

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