The Slovak Financial Administration has provided clarification on the E-invoicing rules that will take effect in 2027

The Financial Administration of the Slovak Republic has recently published an updated FAQ guide that offers essential clarity regarding the technical and tax-related requirements related to the approaching mandatory e-invoicing rollout set to take effect on January 1, 2027. This initiative aims to digitize tax processes and combat VAT fraud, marking a significant transformation in the Slovak business landscape.

Key Exemptions for a Smooth Transition

In recognition of the diverse nature of businesses operating within Slovakia, the updated guidance introduces important exemptions designed to facilitate a seamless transition to the new e-invoicing system:

1. Non-VAT Payers
Businesses and individuals not registered for VAT will not be legally obligated to issue electronic invoices. Although they may choose to join the decentralized Peppol network voluntarily, they retain the flexibility to opt for either e-invoices or traditional paper/PDF formats, depending on the circumstances. It is important to note that while non-VAT payers are not obligated to issue e-invoices, they must still be capable of receiving them, especially if they are actively engaged in business activities.

2. VAT-Exempt Supplies
VAT-registered taxpayers who exclusively conduct tax-exempt supplies, as outlined in Sections 28 to 42 of the Slovak VAT Act, are exempt from issuing invoices for these specific transactions. This exemption recognizes the unique needs of businesses that do not engage in taxable activities.

3. Foreign Companies
Foreign entities registered for VAT in Slovakia, yet lacking a permanent establishment within the country, are entirely exempt from e-invoicing requirements from January 1, 2027, until June 30, 2030. During this introductory phase, only domestic VAT payers and transactions will be subject to the new e-invoicing regime.

Compliance Requirements for E-Invoices

As Slovakia prepares for the e-invoicing transition, several critical compliance requirements have been detailed in the guidance:

XML Format Only
E-invoices must be structured electronic files compliant with the EN 16931 standard. This means that all e-invoices should be archived in their original XML format; converting these files into other formats, including PDF or scanned images, will not satisfy compliance mandates.

EDI Integration
For businesses utilizing Electronic Data Interchange (EDI) systems, such as EDIFACT, it is essential to convert invoicing data into an EN 16931-compliant format starting January 1, 2027. This ensures that the digital transition is effectively realized across various platforms.

The "Digital Postman"
E-invoices are to be sent and received via an accredited service provider, commonly referred to as a "digital postman," through the Peppol network. Any variations from this method of delivery will require explicit consent from the buyer.

Error Handling and Reporting

The Financial Administration has clarified that receiving an electronic invoice does not compel a business to accept it unconditionally. Similar to traditional paper invoices, e-invoices can be rejected under certain circumstances:

• For Minor Errors: If an invoice contains simple errors, such as incorrect amounts, the recipient is advised to reach out to the supplier directly to request a corrective document or a credit note.
• For Suspected Fraud: If an invoice raises red flags indicating potential fraud, businesses should report the issue immediately to the tax administration.

Archiving Requirements

Businesses are required to archive electronic invoices in their original XML format for a period of ten years. Non-compliance with these archiving requirements may result in financial penalties, underscoring the importance of adherence to the new e-invoicing regulations.

Interactive E-Invoicing Guide

In addition to the updated FAQ, the Financial Administration has launched an interactive e-invoicing guide designed to assist businesses in determining their obligations and preparing for the upcoming changes. This guide, which caters to various entities from small entrepreneurs to large corporations, can be accessed at [www.info-efaktura.sk](http://www.info-efaktura.sk).

Conclusion

The forthcoming e-invoicing rollout in Slovakia signifies a monumental shift towards digital tax compliance, aimed at reducing VAT fraud and enhancing operational efficiency. The clarifications provided by the Financial Administration are invaluable for businesses navigating this transition, ensuring they are well-prepared to meet the legal requirements and leverage the benefits of this digital evolution. Companies should take proactive steps to familiarize themselves with the new rules and utilize the available resources to ensure compliance in the lead-up to the January 1, 2027, mandate.