Additional explanation for transactions of persons referred to in Article 9, paragraph 1 of the VAT Act

 

According to the provisions of Article 9, paragraph 1 of the VAT Act, the Republic and its bodies, bodies of territorial autonomy and local self-government, as well as legal entities established by law, or by an act of a body of the Republic, territorial autonomy or local self-government (hereinafter: the Republic, bodies and legal entities), for the purpose of performing state administration or local self-government tasks, are not taxable persons within the meaning of this law if they carry out the supply of goods and services within the scope of the body, or for the purpose of performing state administration or local self-government tasks.

 

The VAT Act does not apply to the above transactions of persons referred to in Article 9, paragraph 1 of the VAT Act.

 

Namely, for these transactions, persons referred to in Article 9, paragraph 1 of the VAT Act are not taxpayers, which essentially means that the transactions in question are not subject to VAT taxation for these persons. 

 

In this regard, when issuing invoices for the above transactions, persons referred to in Article 9, paragraph 1 of the VAT Act enter the category OE.

 

However, if the exemption of the Republic, authorities and legal entities from the obligations prescribed by the VAT Act for transactions referred to in Article 9, paragraph 1 of the VAT Act could lead to distortion of competition in accordance with the VAT Act, for transactions referred to in Article 9, paragraph 1 of the VAT Act and other transactions, the entry of the category depends on whether these persons are VAT taxpayers or not. 

 

If they are VAT payers, the category entry for a specific transaction is made in accordance with the general rules, based on the determination of the tax treatment of that transaction in accordance with the VAT Act. If the persons referred to in Article 9, paragraph 1, of the VAT Act are not VAT payers, when issuing invoices for the aforementioned transactions, the category SS is entered.

 

You can download the tax categories in a PDF document.