Definition of residence – any legal entity, which has its registered office or its place of actual management in the territory of the Slovak Republic (the place of actual management shall be the place, in which management and business decisions are taken by statutory and supervisory bodies of the legal entity, even if the address of the place of actual management is not registered in the Companies Register). All other legal entities that are not included above are considered as non-residents.
Tax rates effective from 1st January 2017 onwards:
Corporate Income Tax – 21%
Personal Income Tax – 19/25 %
• Dividends 7/35 %
• Interests 19/35 %
• Royalties 19/35 %
NOLs (Net operating losses) – can be carried forward proportionally during a period of four tax periods
Tax period – usually calendar year, but there is a possibility to change period to fiscal year (necessary to inform Tax Authority in advance)
Tax return for corporate income tax purposes
Tax return for each tax period must be filed within three months after the end of the tax year. The period can be extended by three months based on a written announcement sent to Tax Authority before the expiration of regular deadline.
Tax prepayments: monthy / quarterly based on amount of tax liability for the preceding year
Determination of tax base
Basis for tax base determination is statutory accounting profit / loss as adjusted for adjustments set by tax law.
Non-deductible items include e.g.:
• Representation costs
• Penalties and fines
• Write-offs of debts, if specific conditions are met
• Fuel overconsumption
• Gifts / Giveaways
Provisions are considered in general as tax non-deductible with certain exceptions specified in law
Tax depreciation can be calculated using straight-line method or accelerated method (only in case of tangible assets in second and third tax depreciation group)
Tangible assets are divided into six categories with different period of depreciation (4,6,8,12,20,40 years). Intangible assets are depreciated according to accounting depreciation. Assets with acquisition price lower than 1 700 € can be depreciated immediately.
Tax Grouping – our tax law doesn´t contain any provision regarding the corporate taxation of groups in the Slovak Republic
Thin cap rules
apply to domestic and foreign related parties. The maximum amount of tax-deductible interest is set at 25 % of earnings before interest costs, tax, depreciation and amortization.
If the price agreed between related parties differs from the usual price on the market and this price can´t be justified, the tax authorities may adjust the tax base to reflect the market price. Transfer-pricing rules apply to personally or economically related persons. Taxpayers must provide transfer-pricing documentation within 15 days after an official request by the Tax Authorities.