Automated Information Exchange (AIE)

Key Functionalities

The DAC1 module is a system that ensures data collection, exchange, and processing in accordance with Council Directive 2011/16/EU of 15 February 2011, which emphasizes the importance of administrative cooperation between Member States (MS) in the area of taxation.
Data is exchanged in the following income and assets categories:

• Employment income
• Dividends / Royalties
• Life insurance products
• Pensions
• Ownership and income from real estate
• License fees.

The FATCA module is a system that takes care of the automatic exchange of information between the Slovak Republic and the United States' Internal Revenue Service (IRS). The automatic exchange of information is conducted in accordance with the Agreement between the Slovak Republic and the United States aimed at improving compliance with international tax regulations and implementing the Foreign Account Tax Compliance Act (FATCA). The Agreement regulates the automatic exchange of information on financial accounts for tax purposes and serves as a tool for more effective fight against tax fraud.

The FATCA module is an open tool supporting the fulfilment of the Slovak Republic's international obligations arising from the Agreement. In practice, this means provision of information through AIE (Automated Information Exchange) to the United States about designated U.S. persons' accounts maintained by financial institutions in the Slovak Republic.

The DAC2/CRS module is a system that ensures the automatic exchange of information between the Slovak Republic and EU and OECD member states.

The automatic exchange of information with EU member states is conducted in accordance with Council Directive 2014/107/EU of 9 December 2014 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation (the "Directive"). The Directive regulates the automatic exchange of financial account information for tax administration purposes and serves as a tool for more effective tax evasion prevention.

The automatic exchange of information with OECD member states is conducted in accordance with the Convention on Mutual Administrative Assistance in Tax Matters, which governs the automatic exchange of financial account information for tax administration purposes and serves as a tool for more effective tax evasion prevention.

The DAC2/CRS module is an open tool supporting the Slovak Republic's fulfilment of international obligations. In practice, it systematically reports predefined information on the accounts of residents of other EU/OECD member states held by financial institutions in the Slovak Republic to the relevant residence member state via AVI, and it also receives and processes reciprocal reports from the EU/OECD.

The DAC4/CbCR module is a system that ensures the automatic exchange of tax information between the Financial Administration of the Slovak Republic and tax and financial authorities of EU member states and the states that are parties to international agreements binding upon the Slovak Republic. The automatic exchange of information within the EU is carried out in accordance with Council Directive (EU) 2016/881 of 25 May 2016 (DAC4) and the Multilateral Competent Authority Agreement on the Automatic Exchange of Country-by-Country Reports (CbCR MCAA) of 27 January 2016 with the aim to prevent tax evasion.

Pursuant to applicable legislation, the exchanged information pertains to multinational enterprises that are required to annually provide a report containing aggregate information about their revenues, profit or loss before tax, income tax paid, income tax payable, registered capital, retained earnings or accumulated loss, the number of employees, and tangible assets other than cash or cash equivalents for each country of tax residence in which a given multinational enterprise operates. This also includes a list of the constituent entities of the multinational enterprise and the nature of the main economic activity of each constituent entity.

The open DAC4/CbCR module supports fulfilment of the Slovak Republic's obligations under those documents, which means receipt of information from reporting entities and its provision to other EU member states or contracting states, including the receipt of reciprocal data from EU member states or contracting states.

The OSS module is a system that ensures data collection, exchange, and processing in accordance with Council Directive (EU) 2017/2455 and Council Regulation (EU) 2017/2454 for the purpose of implementing special arrangements related to certain value-added tax (VAT) obligations within the provision of remote services and distance sale of goods – referred to as the "OSS" ("One Stop Shop") and "IOSS" ("Import One Stop Shop"). The OSS module, which has replaced the MOSS module, is a tool intended to support the Slovak Republic’s obligations arising from international agreements on mutual assistance and cooperation between EU member states in the area of tax administration. To ensure the correct VAT assessment and payment in respect of remote services and sales, the OSS module facilitates the following processes:

• Registration and deregistration of non-established taxable persons (NETP) under a special scheme and related processes,
• Submission and processing of VAT returns, including amended VAT returns and related processes,
• Communication and processing of information on payments, payment delays, and other relevant details between tax administrations of EU member states.

The DAC6 module is a system that ensures the collection of information on cross-border arrangements subject to mandatory reporting for the Financial Administration of the Slovak Republic (FA SR) and its submission to the European Commission (EC). The automatic information exchange is carried out in accordance with Council Directive (EU) 2018/822 of 25 May 2018 (DAC6). Pursuant to applicable legislation, intermediaries and users, who are obligated persons, must provide information related to reportable arrangements to the specified extent:

• Identification details of the intermediary and user, and where dependent persons of the user are involved in the arrangement, identification details of such dependent persons shall be reported as well,
• Detailed information about the hallmark(s) that make the arrangement reportable,
• The content of the reportable arrangement,
• The date of the first step in implementing the reportable arrangement,
• Details of the legal provisions that are used in the reportable arrangement,
• The estimated value of the reportable arrangement,
• Identification of the user's member state(s) and any other member states to which the reportable arrangement may apply,
  h) Identification of any other individuals or entities that may be affected by the reportable arrangement, along with their connections to other member states,
• Other relevant information about intermediaries, users, and the reportable arrangement.

The open DAC6 module is a tool intended to support the fulfilment of the Slovak Republic's obligations under the relevant documents, which means receiving information from reporting entities and providing it to the European Union.

The DAC7/DPI module is a system that ensures collection of the information reported by platform operators for the Financial Administration of the Slovak Republic (FA SR) and the automatic exchange of information about platform operators and sellers subject to the reporting between the Financial Administration of the Slovak Republic and the tax authorities of EU member states or contracting states under international agreements by which the Slovak Republic is bound. The information reporting is carried out in accordance with Council Directive (EU) 2021/514 of 22 March 2021 (DAC7 Directive). According to Act 442/2012, platform operators are required to submit information within the following defined scope:

• Non-established platform operators – registration according to Section 22 (j)(2),
• Platform operators established in the Slovak Republic – notification of the EU member state according to Section 22 (j)(1), where they indicate the EU member state in which they choose to fulfil the reporting obligations under DAC7/DPI,
• Platform operators – DAC7/DPI notification according to Section 22 (i)(2) and (5), or the declaration of the reporting platform operator according to Section 22 (i)(3), or the declaration of the excluded platform operator according to Section 22 (m)(7).
• The open DAC7/DPI module is a tool to support the Slovak Republic's fulfilment of obligations under those documents, ensuring the receipt of information from platform operators.

The SME module, currently under implementation, will be a system ensuring data collection, exchange, and processing in accordance with Council Directive (EU) 2020/285 on the common system of value-added tax (VAT), particularly as concerns the special scheme for small enterprises, and Council Regulation (EU) No. 904/2010 on administrative cooperation and the exchange of information to monitor the proper application of the special scheme for small enterprises.

Key Benefits

The implemented solutions ensure, in addition to fulfilling the Slovak Republic’s obligations to EU member states and other contracting states, monitoring of legal compliance on the part of reporting entities. In the event of non-compliance, they provide data for other internal systems within the FA SR for the purpose of imposing and collecting fines and penalties. This wide range of AVI modules supports the key objectives of the FA SR in the area of efficient tax collection and the prevention of tax evasion.