We bring you our regular overview of tax and legal news in the Slovak legislation.
The Amendment of the Act No. 563/2009 Coll. on Tax Administration (the Tax Code) was approved by the Slovak Parliament for the second reading. The next steps of the legislative process are planned for October 2017.
The proposed Amendment significantly modifies the tax secrecy. The information whether there is/was a tax audit or tax execution proceeding will not be considered as a tax secrecy.
In accordance with the respective Amendment the exemptions from the tax secrecy will not be explicitly stated in the Tax Code, tough the respective authorities will have to prove their entitlement for tax secrecy disclosure which would depend on their responsibilities resulting from Tax Code, other legislation or international treaty.
The individual requests to disclose a tax secrecy will be considered formally with the requestors being responsible for fulfilling of the tax secrecy.
In line with the proposed amendment disclosure of the information on breach of obligation stipulated by the Tax Code or other legislation by the President of the Financial Administration (or authorized person) will not be considered as a breach of tax secrecy, provided there is a valid decision in this respect. Information about the tax secret disclosure will be registered in the taxpayer file.
Amendment of the Tax Code introduces also the obligation of electronic communication with the Tax Authorities as of 1 January 2018 for all legal entities and as of 1 July 2018 for individuals registered for income tax.
The amendment of the Tax Code, based on Action plan of fight against tax evasion for the period 2017 – 2018, proposes also introduction of a summary protocol from several tax audits that are performed simultaneously at several taxpayers where the breach of the tax law was identified especially in a case where the respective taxpayers are part of a fraud chain. A summary protocol will not replace the obligation of the tax authorities to issue a protocol from the individual tax audits.
The proposed wording introduces also indexation of taxpayers including the special tax regimes for reliable taxpayers.
In order to improve business environment it is proposed to extend the deadline for filing of an appeal from the current 15 days to 30 days and decrease a fee for a binding ruling.
A draft amendment to Act No. 595/2003 Coll. on Income Tax as amended (hereinafter “the SITA”), prepared by The Ministry of Finance of the Slovak Republic, should enter into force as of 1 January 2018 upon approval of the Parliament and signature of the President. The draft amendment is rather extensive and introduces several new provisions also in connection with the implementation of the EU Council Directive of 12 July 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market (ATAD Directive). Please find below an overview of the main proposed changes:
We will keep you updated on further development of this legislation.
The OECD Committee on Fiscal Affairs has released the draft contents of the 2017 update to the OECD Model Tax Convention. Significant parts of the update were already approved and released as part of the BEPS Package. The update will be submitted for the approval of the Committee on Fiscal Affairs and of the OECD Council later in 2017. This draft therefore does not necessarily reflect the final views of the OECD and its member countries.
Public comments were already received with respect to certain parts of the 2017 update that have not been part of the BEPS Package. These changes are as follows:
Finally, we would like to note that the changes and amendments which had been already approved as a part of the BEPS Package will be included in the draft contents of the 2017 update. This is mainly the following: neutralizing the effects of hybrid mismatch arrangements, preventing the granting of treaty benefits in inappropriate circumstances, artificial avoidance of permanent establishment status and mutual agreement or arbitration.
On 20 September the Government approved the Amendment to the Slovak VAT Act.
The main changes compared to the original draft amendment, details of which are included in our May’s issue of Tax&Legal News, are as follows:
We will keep you updated about the next steps in the legislative process.
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