VAT in international transport looks more complicated than it is. Basic rules fit on a single sheet of paper. Trouble comes from exceptions, invoicing details and obligations that are easy to overlook. This article focuses on a Slovak VAT payer carrying goods for customers in other European Union countries. It is not tax advice. For a specific case, turn to a tax adviser or to Financial Administration.
Basic rule: it depends on who your customer is
For transport services, VAT is not judged by where goods travel from and to, but by whom you provide a service to. It matters whether your customer is a taxable person, meaning a business registered for VAT, or a private individual.
- A customer is a business (B2B): place of supply is where a customer is established. It does not matter where carriage is performed. For a Slovak carrier this means carriage for a customer in Germany lies outside Slovak territory for Slovak VAT purposes.
- A customer is a private individual: for carriage of goods between member states, place of supply is where carriage begins. Other transport is taxed where it is performed.
First case is common in practice, so we cover it in more detail.
What this means for an invoice
When a Slovak VAT payer issues an invoice for carriage to a business in another member state, place of supply is in your customer's country. You do not charge Slovak VAT. An invoice must carry your customer's VAT ID and a note that liability for tax passes to a recipient of a service (reverse charge). A customer calculates and pays tax in their own country. A supply is reported in a recapitulative statement, filed according to your tax period and type of supplies. Check details on Financial Administration's website.
A mirror case awaits you with subcontractors. If you hire a foreign carrier and it issues you an invoice without VAT, place of supply is in Slovakia, because a recipient of a service, meaning you, is established here. You then account for tax yourself. An invoice costs you nothing, but you must include it in your VAT return, and you may claim deduction at same time if you meet conditions.
Common mistakes
- Slovak VAT charged needlessly to a foreign business. A customer cannot deduct it in their own country and asks for a correction, which damages a relationship.
- An unverified VAT ID. If a customer's number is not valid, you are not entitled to proceed as for B2B, and Slovakia may assess a shortfall against you. A number is verified in European VIES system, and it is wise to save confirmation of a check. Verify repeatedly, not only on a first order: validity can change.
- A missing reverse charge note. An invoice without it raises questions and can be challenged in an inspection.
- A forgotten recapitulative statement. Services provided to businesses in other member states must be listed there. Whoever files late risks a penalty, even when no tax arose from a supply.
- Wrong handling of subcontractors. An invoice from a foreign carrier must be booked with reverse charge, not ignored.
- A confused customer type: private individual versus business. Different place of supply rules apply to private individuals. If carriage concerns something private, such as a house move, assess it separately.
- Ancillary services judged differently from carriage. Loading, unloading and storage that you invoice to a customer follow same place of supply rule as carriage when supplied by one supplier. Check notes on exceptions.
- A wrong exchange rate on invoices in foreign currency. For VAT, conversion follows rules of law, usually using European Central Bank reference rate on a decisive day. Using another rate is a frequent mistake.
What to keep in case of inspection
For B2B carriage for a foreign customer, an inspection usually asks about three things: whether a customer was a taxable person at time of supply, whether carriage actually took place, and whether a recapitulative statement matches invoices. So keep confirmation of a VAT ID check, an order or contract, a transport document (CMR or another consignment note signed by a consignee) and an invoice. Having more of this with each order makes an inspection shorter.
What if carriage passes through several countries
For VAT, a rule does not change even though a route crosses four states. Your customer determines place of supply, not a route. A different question is toll, driver accommodation and fuel. Those are your costs, and you pay them in countries where they arise, often with local VAT. For purchases abroad it pays to find out whether you can reclaim VAT from another member state, which is filed electronically through your home tax authority's portal. Deadlines are fixed and a claim lapses after they pass.
How to help yourself in practice
- For each new customer, verify VAT ID and save confirmation.
- Keep reverse charge notes ready in your invoicing, in customer's language.
- Each month, compare invoices issued abroad with a recapitulative statement before filing it.
- Book invoices from foreign subcontractors as soon as received, not at period end.
- Once a year, review with a tax adviser whether anything has changed. VAT and electronic reporting rules are adjusted from time to time.
How Exilogic helps
You keep customer data, including VAT ID, in one place and can check number validity directly through VIES from a system. You issue an invoice in your customer's language, so notes for a foreign partner are understandable. A system does not replace a tax adviser, but it helps catch most common mistakes that arise when data is entered.