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Interest on late VAT refunds in Slovakia

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Interest on late VAT refunds in Slovakia

Following the ECJ decision announced last April,  the Slovakian government introduced changes to its VAT law to allow the possibility of receiving interest on VAT refunds when these are repaid after a given period.

Where the tax authorities transfer the VAT amount after six months from the moment the repayable VAT return is submitted, the authorities must add daily interest to the repayment. The applicable interest rate will be twice the interest rate published by the European Central Bank and not lower than 1.5%.

The ECJ has been proactive precluding legislations that disallow interest on late VAT refunds. These initiatives have been taken on the grounds of fiscal neutrality, as the lack of interest increases the cash flow disadvantages for the taxpayer. 

The above changes have been submitted to Parliament and are expected to be approved in the coming weeks. Once they get the final approval, they will become effective as from 1 January 2017.

  • By Marosa EU VAT
  • Published 30/10/2016 18:42