Slovakia

Basic taxes (briefly)

Personal tax 19-25%
Corporate tax (in detail) The standard income tax rate is 21%. A reduced rate of 15% is set for companies with revenues of up to 100.000 euro
Capital gains tax. Details Capital gains are included in corporate tax base
VAT. Details The standard VAT rate is 20%. A reduced rate of 10% applies to certain goods and services
Other taxes Social contributions, Real estate tax
Government fee
Stamp duty

International tax agreement

   


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TAXATION

Personal Income Tax

Personal income tax in Slovakia is taxed on the worldwide income of resident individuals, and on Slovakia-source income of non-residents.
Income from employment, including most employment benefits, is fully taxable.
Personal income tax is levied at progressive rates:
Income, EUR Rate
0 - 35,022.31 19%
Over 35,022.31 25%

Tax year is a calendar year. The employer withholds tax on salary income. All individual taxpayers are required to file an individual tax return. Individuals must make monthly or quarterly prepayments during the calendar year. Penalties apply for failure to comply.

Corporate tax

Corporate income tax is levied on the worldwide income of resident companies and only on Slovakia-source income of nonresident companies.
Corporation tax is imposed on corporate income tax is imposed on a company’s accounting profits adjusted for deductible, nondeductible and nontaxable items. Normal business expenses may be deducted in computing the tax base.
The corporate tax rate reduced from 22% to 21% on 1 January 2017.

Capital gains tax

There is no separate capital gains tax in Slovakia. Capital gains are included in corporate tax base and are taxed at a rate of 22%. In some cases, capital losses are nondeductible.

Losses

Tax losses declared after 1 January 2014 may be carried forward and deducted equally from the tax base for four (reduced from seven) years. Losses may not be carried back.

Dividends

Dividends paid/received generally are not subject to tax in Slovakia.

Tax year

The tax year generally coincides with the calendar year, although the taxpayer can elect a fiscal year. The tax period may be shorter, for example, if the company moves from a calendar year to a fiscal year.

VAT

VAT in Slovakia is imposed on the sales of goods and the provision of services.
The standard rate is 20%, with a reduced rate of 10% applying to certain pharmaceutical and medical products. Certain supplies (e.g. financial and insurance services) are exempt.

VAT Registration

All companies that carry out economic activities in Slovakia are regarded as taxable persons. The registration threshold for VAT purposes is EUR 49,790 within the preceding 12 consecutive calendar months. Taxable persons below the threshold can apply for voluntary VAT registration. Nonresidents that make taxable supplies of goods or services in Slovakia must register before the supply is made, unless the reverse-charge is applied by the recipient of the supply.

VAT tax period and returns

The standard assessment period is the calendar month. A registered person can apply for a calendar quarter assessment period if its turnover is less than EUR 100,000 in the preceding 12 consecutive months and the person has been registered for VAT for at least one calendar year.
The VAT return must be submitted by the 25th day of the month following the relevant tax period. When the return is submitted monthly or quarterly, payment in full must accompany the return.

Withholding tax

Withholding tax rate depends on a type of income paid to a non-resident:
Type of Income Rate
Dividends 0%
Interest 19% (A 35% rate applies where the payment is made to a resident in a offshore jurisdiction)
Royalties 19% (A 35% rate applies where the payment is made to a resident in a offshore jurisdiction)

Stamp duty

Stamp duty is imposed in Slovakia, but fees are usually insignificant. Stamp duty for incorporation is 165.75 EUR in case of electronic application and 331.48 – in case of paper application.

Government fee

There is no government fee in Slovakia, but there is a minimum tax starting from 400 EUR.

Other taxes and duties

Real property tax levied by the municipal authorities on the ownership and occupation of real property.
Social security contribution the employer is required to make contributions at a rate of 35.2% of an employee’s gross salary.

Anti-avoidance rules

Transfer pricing: Transactions between a Slovak entity and a nonresident related party are subject to the transfer pricing rules, which generally follow the OECD guidelines. Taxpayers must prepare contemporaneous transfer pricing documentation related to the methodology used in determining transfer prices in related party transactions.
Thin capitalization: No
Controlled foreign companies: No

Double Tax Agreements

Slovakia signed a whole range of double tax agreements and tax information exchange agreements:
  • 70 DTCs: Armenia, Australia, Austria, Barbados, Belarus, Belgium, Bosnia and Herzegovina, Brazil, Bulgaria, Canada, China, Chinese Taipei, Croatia, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Ethiopia, Finland, Former Yugoslav Republic of Macedonia, France, Georgia, Germany, Greece, Hungary, Iceland, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Kazakhstan, Korea (Republic of), Kuwait, Latvia, Libya, Lithuania, Luxembourg, Malta, Mexico, Moldova (Republic of), Montenegro, Netherlands, Nigeria, Norway, Poland, Portugal, Romania, Russian Federation, Serbia, Singapore, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Syrian Arab Republic, Tunisia, Turkey, Turkmenistan, Ukraine, United Arab Emirates, United Kingdom, United States, Uzbekistan, Viet nam;
  • 1 TIEA: Guernsey.

Foreign exchange control

There is no exchange control in Slovakia.

ACCOUNTS

Financial statements

Financial statements have to be prepared at the end of each financial year. The financial statements shall give a true and fair view of the entity’s net worth and earnings situation. The financial statements consist of the balance sheet, the profit and loss statement and the notes. The management of the company is responsible for the preparation of the financial statements, which have to be done within 3 month after the balance sheet date.

Audit

Companies, which exceed two of the three below-mentioned criteria in the two financial years ending before the actual balance sheet date have to be audited in Slovakia:
  • total assets of more than EUR 1 000 000

  • turnover of more than EUR 2 000 000

  • more than 30 staff.

Annual Return

Generally speaking, Annual Return is a short review on the current state of the company, which is prepared by the company secretary annually. As a rule it includes the following information:
  • Incorporation information (registration date, registered address);
  • Information about directors and their resignation;
  • Information about secretaries and their resignation;
  • Information about registered capital, nominal value of shares and amount of issued shares;
  • Information about shareholders and share transfer.


Slovak companies are not required to prepare and file annual return.

Tax returns

The tax year generally coincides with the calendar year, although the taxpayer can elect a fiscal year. The tax period may be shorter, for example, if the company moves from a calendar year to a fiscal year.
Slovakia operates a self-assessment regime. In general, corporate income tax prepayments are due in monthly or quarterly installments. Income tax is assessed on the basis of annual returns, which must be filed within three months following the end of the tax period. The deadline for filing can be extended by three months if a written request is submitted to the tax authorities. However, the taxpayer must pay any tax due by the filing date.
Penalties for noncompliance with the tax law include the following sanctions: late payment interest on outstanding tax liabilities, which is calculated as a percentage per annum on the outstanding amount; and fines, usually up to EUR 32,000 or calculated as a percentage of a tax underpayment.

    Taxes of Slovakia

    Min. rate for corporate tax 21%
    Capital gains tax Regular rate
    VAT 20%
    Withholding tax 0%/19%/19%
    Exchange control No
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