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As digital transformation sweeps across Europe, Slovakia embraces e-invoicing and e-reporting as powerful tools to modernise its tax and administrative frameworks. With new obligations on the horizon and lessons learned from past initiatives, this article explores Slovakia’s journey so far and its plans for the future, particularly in light of the recently proposed amendments to the VAT Act.
B2G & G2G e-invoicing: An important milestone reached
Slovakia introduced mandatory e-invoicing for Business-to-Government (B2G) and Government-to-Government (G2G) transactions through a phased rollout, starting in April 2023. Public entities, including the Ministry of Finance and other government institutions, were the first to adopt the system, which requires businesses providing goods and services to public entities to issue invoices electronically. This move aligned Slovakia with EU goals for greater transparency and efficiency in public procurement.
The e-invoicing platform used for B2G transactions, known as the IS EFA (Informačný Systém Elektronickej Fakturácie), ensures compliance with the European standard for electronic invoicing (EN 16931). Businesses that do business with public authorities must issue invoices that comply with this structured data standard to facilitate automated processing and reduce manual intervention.
B2B e-invoicing: A history of anticipation
While B2G and G2G e-invoicing are fully operational today, Slovakia’s journey towards Business-to-Business (B2B) e-invoicing has been marked by delays and shifting timelines. Initial plans for a voluntary B2B e-invoicing system began in January 2022, with mandatory obligations expected shortly thereafter. However, as of early 2024, the mandates were indefinitely postponed, and the rollout for B2B e-invoicing remained undefined.
This changing landscape reflects both the complexity of implementing a comprehensive e-invoicing framework and Slovakia’s cautious approach to integrating businesses into the system. The delays have not deterred progress but have underscored the need for a robust legal and technical foundation.
The Draft Law: A clearer vision for the future
In November 2024, Slovakia took a significant step forward with the publication of a draft law amending Act No. 222/2004 on Value Added Tax (the VAT Act). This legislation aligns with the EU’s ViDA (VAT in the Digital Age) initiative and aims to introduce both e-invoicing and e-reporting requirements for domestic transactions, expected to take effect from 1 January 2027. Let’s unpack the key aspects of the proposed draft amendment:
E-Invoicing
- Starting from 1 January 2027, all VAT-registered taxpayers will be required to issue and receive invoices in a structured electronic format. Only invoices that comply with EN 16931 will be considered valid, ensuring standardisation and interoperability between businesses.
- As defined in the draft amendment, an e-invoice must be created, sent, and received in a format that allows for full automation and digital processing, eliminating manual handling.
- This obligation is expected to apply to domestic transactions and mirror the requirements for cross-border transactions outlined in the ViDA initiative.
E-Reporting
- Also from January 2027, businesses will be required to report data from issued and received invoices to the Slovak Tax Administration in real time (known as real-time reporting). This will align domestic processes with EU-wide digital reporting requirements (DRR), which will be introduced with ViDA effective 1 July 2030.
- The system aims to combat tax fraud, reduce VAT gaps, and modernise tax administration. By receiving data in real time, the tax administration can proactively detect irregularities and improve compliance.
Slovakia’s initiative in the wider European context of ViDA
Slovakia’s move towards e-invoicing and e-reporting reflects broader European efforts to digitise VAT compliance. The ViDA initiative, approved by the EU Council in November 2024, will mandate electronic invoicing and real-time data exchange for cross-border transactions within the EU. Slovakia’s draft law not only aligns with these goals but also prepares businesses for the eventual transition to a fully harmonised EU-wide system.
With real-time reporting and structured e-invoicing, businesses will benefit from faster processing, reduced administrative burden, and improved tax compliance. However, the shift also requires significant preparation, including system updates and process changes to meet the new requirements.
Looking ahead: What’s next for Slovakia?
Slovakia’s e-invoicing framework is set to bring major changes over the next three years:
- B2B e-invoicing mandate from 2027: The structured e-invoicing requirement will apply to all domestic transactions, creating a single, uniform standard for businesses of all sizes.
- Evolution of e-reporting: Real-time reporting will become mandatory, enabling the tax administration to detect and prevent fraud more effectively.
- Alignment with ViDA: By adopting these measures, Slovakia will position itself as a proactive participant in the EU’s digital transformation of VAT compliance.
The Ministry of Finance is eager to involve the public in the development of this transformative policy. Citizens and stakeholders are invited to submit comments and suggestions on the draft law during the consultation period. A formal commenting period will be announced in the coming months, providing ample opportunity for discussion and refinement of the proposal.
While challenges remain, including ensuring business readiness and updating government systems, the benefits of this digital transformation are clear. Slovakia’s commitment to e-invoicing and e-reporting will not only increase transparency but also strengthen the country’s tax system and business environment.
Preparing for the change
For businesses in Slovakia, now is the time to evaluate your invoicing systems. Whether you’re already using e-invoicing for B2G transactions or preparing for the upcoming B2B mandate, compliance is key. Explore solutions that support EN 16931 standards, enable real-time reporting, and ensure a seamless transition to the digital future.
Stay tuned for further updates as Slovakia develops its e-invoicing framework and prepares to join the EU’s harmonised VAT system under ViDA.