Slovakia tax system: audit, reporting and optimization of taxation of Slovakian companies and individuals: VAT, income tax and capital gains
Basic taxes (briefly)
|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|
International tax agreement
|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|
Personal income tax
Tax residents of Slovakia pay tax on their worldwide income, non-residents – on income from sources in Slovakia.
Income tax is levied at the rate of 19% on the income in the amount of the subsistence minimum increased 176.8 times (i.e. EUR 38,553.01). The excess is taxed at 25%.
Gains from the sale of assets are taxed at the rate of 19%.
Gains from the sale of non-business assets are tax exempt if the assets were owned for at least 5 years.
Gains from the sale of shares in companies listed on recognized exchanges are tax exempt if the shares were held for more than one year.
Dividends are generally taxed at the rate of 7%.
Corporate income tax
Slovak companies pay corporate income tax on their worldwide income, foreign companies – on income from sources in Slovakia.
The standard corporate income tax rate is 21%. A reduced rate of 15% applies to companies with revenues of up to EUR 100,000.
Gains from the sale of assets are included in the corporate income tax base.
Gains from the sale of shares may be tax exempt if at least 10% participation was held for at least two years and if certain other conditions are met.
Dividends are tax exempt except in some cases. In particular, dividends from companies located in non-treaty countries may be taxed at the rate of 35%.
A foreign company is considered a controlled foreign company (CFC) if more than 50% of its capital or voting rights or rights to profits is held, directly or indirectly, solely or jointly with related parties, by a Slovak company, and if the foreign company is taxed at a rate of less than 50% of the tax that would otherwise be payable in Slovakia.
The non-distributed profit of a CFC is included in the tax base of the controlling Slovak person to the extent such profit is attributable to the assets and risks related to the foreign company’s significant functions performed in Slovakia.
No tax is withheld on dividends paid to legal entities out of the profit arising since 2004.
Interest and royalties are taxed at 19%.
Dividends, interest, and royalties paid to non-DTT (Double Tax Treaty) or non-TIEA (Tax Information Exchange Treaty) countries, or to an unidentifiable beneficiary are taxed at 35%.
Tax rates are reduceable under double tax treaties and EU directives.
The standard VAT rate is 20%.
Some goods and services are subject to the reduced rate of 10%.
Social security contributions
Social security contributions are 9.4% for the employee and 24.4% for the employer. No such contribution is payable on remuneration exceeding EUR 7,644 per month.
The health insurance contribution is 4% for the employee and 10% for the employer.
Employers also pay for an injury insurance at the rate of 0.8%.
Health insurance contributions may be payable not only on employment remuneration, but also on other income, such as income from the sale of shares.
Immovable property tax
Immovable property tax is levied on land, buildings, and apartments.
The rates are set by local authorities and vary greatly depending on the location and type of the property.
Double tax agreements
Slovakia has entered a number of double tax and tax information exchange mechanisms:
70 DTCs: Armenia, Australia, Austria, Barbados, Belarus, Belgium, Bosnia and Herzegovina, Brazil, Bulgaria, Canada, China, Croatia, Montenegro, Cyprus, Czech Republic, Denmark, Egypt, Estonia, Ethiopia, Finland, France, Georgia, Germany, Greece, Hungary, Iceland, India, Indonesia, Iran, Ireland, Israel, Italy, Japan, Kazakhstan, Korea (Republic of), Kuwait, Latvia, Lithuania, Luxembourg, Macedonia, Malta, Mexico, Moldova, Netherlands, Nigeria, Norway, Poland, Portugal, Romania, Russia, Serbia, Singapore, Slovenia, South Africa, Spain, Sri Lanka, Sweden, Switzerland, Syria, Thailand, Tunisia, Turkey, Turkmenistan, UAE, Ukraine, United Kingdom, USA, Uzbekistan, Vietnam.
1 TIEA: Guernsey.
Foreign exchange transactions can generally be made without restrictions.
Taxes of Slovakia
|Min. rate for corporate tax||21%|
|Capital gains tax||Regular rate|