Subscriptions to AI tools and SaaS applications — from ChatGPT or GitHub Copilot through Midjourney to Canva or an accounting cloud — are in most cases a service you can claim as a tax expense in the period you consume it, provided it serves your business. Annual subscriptions call for accrual over time, and buying from a foreign provider triggers a VAT self-assessment for VAT payers. The key is to prove the business purpose and keep your documents in order.
Are AI and SaaS subscriptions a tax expense?
Yes, if they meet the general test for a tax expense under § 2(i) of the Income Tax Act: they must serve to earn, secure and maintain taxable income, be demonstrably incurred and recorded in the books. A tool such as ChatGPT for a marketing team, Copilot for developers or invoicing SaaS for accounting clears this test easily. What matters is the link to your activity, not the mere fact that it is a "modern" technology.
Watch the purpose, though. If you also use the same subscription privately, only the part matching business use belongs in expenses. We return to this line between business and private below, as with other operating costs; where the rules get complex, Slovak tax advisory for companies can help you draw the boundary correctly.
Is it a service or an asset?
Most AI and SaaS products are supplied as a service — you pay for the right to use software remotely, without acquiring ownership or a perpetual licence. Such an expense is not an intangible asset and is booked directly to costs, usually in full in the period of consumption. Monthly and annual subscriptions are therefore not spread through depreciation.
It is different when you buy a perpetual licence or custom software for long-term use. That may be a long-term intangible asset; the tax depreciation of intangible assets follows the accounting depreciation under § 22(8) of the Income Tax Act over its useful life. The entity sets the threshold for capitalisation itself in an internal directive.
What about VAT on purchases from abroad?
Most major AI and SaaS providers are established outside Slovakia — OpenAI, Microsoft, Google or Adobe usually invoice from Ireland or the US. Under § 15(1) of the VAT Act the place of supply of such a service is where you are established, i.e. Slovakia. If you are a VAT payer, you self-assess the service under § 69(3): you declare Slovak VAT at 23 % and deduct it under the same conditions.
So always give the provider your VAT ID — it will then invoice you without tax, noting that the recipient accounts for it. Example: on an annual subscription of EUR 240 you declare EUR 55.20 of VAT and deduct the same amount, so the impact is neutral. If you are not a payer, merely receiving such a service may oblige you to register under § 7a before receiving it.
How to book annual and monthly subscriptions?
A monthly subscription is simple — it belongs to the costs of the month it relates to. For an annual subscription that reaches into the next accounting period, you apply accrual accounting. The cost is not expensed all at once but spread through deferred expenses over the period it actually covers.
Example: if in November 2026 you pay an annual subscription of EUR 1,200 covering November 2026 to October 2027, two months (EUR 200) belong to 2026 costs and the rest is deferred into 2027. Without this split you would reduce your tax base earlier than you are entitled to — a typical year-end mistake.
What about mixed private and business use?
If one subscription (say ChatGPT or Canva) is used outside the business too, only a reasonable business share belongs in expenses. For tools tied purely to running the company — developer, accounting or marketing SaaS — the business purpose is usually obvious. For general-purpose tools that easily serve private needs, be ready to document the purpose.
It helps to hold the subscription in the company's name, pay it from the business account and be able to describe how you use it in the business. The same apportionment logic applies to a laptop, phone or internet connection, and reliable professional accounting in Slovakia keeps the business and private shares clearly separated.
What documents do you need for AI and SaaS subscriptions?
Foreign providers often do not issue a classic paper invoice — the document arrives by e-mail as a PDF or is downloadable in your account. That does not change the fact that you must keep it. An audit checks the expense, its business purpose and the correct VAT treatment, so make sure you have:
- an invoice or document with your business name, address and VAT ID,
- proof of payment (card or bank statement),
- a short note on what the tool is used for in the business,
- an internal directive with the threshold for capitalising software.
Putting the documents in order straight away spares you arguments in an audit and the risk of a disallowed expense. With many subscriptions it pays to keep a simple overview with the renewal date and amount.
Accumulated dozens of AI and SaaS subscriptions and unsure which are a tax expense and where VAT must be self-assessed? Let us go through them and set up records so you claim everything you are entitled to.
FAQ
Is a ChatGPT or Copilot subscription a tax expense?
Yes, if the tool serves the business and meets the conditions of § 2(i) of the Income Tax Act. It is a service you claim directly as a cost, not an asset to depreciate. If you also use it privately, only a reasonable business share that you can document belongs in expenses.
Do I have to deal with VAT on a subscription from OpenAI or Microsoft?
If you are a VAT payer, yes. The service has its place of supply in Slovakia, so you self-assess it under § 69(3) at 23 % and deduct the tax, so the effect is usually neutral. Give the provider your VAT ID. For a non-payer, receiving such a service may trigger registration under § 7a.
How do I book an annual subscription that spans into the next year?
You use accrual accounting through deferred expenses. Only the part relating to the months of the given year goes into that year's costs, and the rest is spread into the following period. This avoids reducing the tax base prematurely, one of the common year-end mistakes.