The modern financial sector is undergoing rapid digital transformation – from electronic wallets and payment gateways to processing platforms. This dynamic development also brings new challenges in the area of value added tax (VAT).
In the Bulletin of the Slovak Chamber of Tax Advisors (December 2024), we therefore focused on the topic of VAT application in the payment services sector.
Key questions addressed in the article:
- Which services are exempt from VAT?
– for example, if an acquirer performs financial transactions, as well as clearing and card schemes (Visa, Mastercard). - Which services are subject to VAT?
– technical and support services provided by service partners, payment gateways, or intermediaries who do not directly execute money transfers.
Why is this important?
Correct VAT treatment of payment services is crucial both for businesses and for the tax authorities. Ambiguities in the legal framework can lead to divergent interpretations, issues during audits, or even significant tax risks.
In the article, we emphasise that:
- VAT exemption can only be applied to services that directly cause legal and financial changes,
- each case must be assessed individually,
- thorough analysis and professional advice help minimise risks in this complex area.
👉 You can find the full article in the SKDP Bulletin – Autumn/Winter 2024 at this link.