Slovakia – Tax Residence Definition Is Broadened | KPMG | GLOBAL
close
Share with your friends

Slovakia – Tax Residence Definition Is Broadened from 2018

Slovakia – Tax Residence Definition Is Broadened

This report covers changes to the definition of tax residence in Slovakia that involves persons deemed to have a residence in Slovakia even if not registered.

1000

CONTACTS

Assistant Manager, Tax

KPMG in Slovakia

Contact

Related content

Flash Alert 2017-191

As part of the annual amendment of the Income Tax Act, the Slovak Parliament approved broadening the tax residence test for individuals.1  According to the amended wording of the definition, the categories of tax residents will include not only persons with a registered permanent residence and those who stay in Slovakia for at least 183 days in a calendar year, but also persons deemed to have a residence in Slovakia even if not registered.  This change is applicable for the 2018 tax year.  

WHY THIS MATTERS

This broadening of the definition of Slovakian residence will likely result in a change of tax residence status for individuals who spend extended periods of time abroad and were able to claim nonresident status by de-registering their permanent residence address, but who still maintain a certain degree of ties to Slovakia, including having a residence available to them.  As a result of this change in tax resident status, such individuals may be subject to tax on their worldwide income in Slovakia.

Employers may wish to take stock of their expatriate workforce coming into and leaving Slovakia and their registered permanent residence address or residence status in Slovakia.

Further Details

Until now, individuals were considered to be tax residents in Slovakia only if they either were registered as having a permanent residence address with the authorities, or stayed in Slovakia at least 183 days in a calendar year.  Adding an “actual residence” test aims to include also those who deregistered their permanent residence address in Slovakia and who do not spend more than half a year in the country, but who maintain a home in Slovakia if it can be established that they intend to permanently reside there. 

KPMG NOTE

It should be noted that this change is not likely to affect individuals who are tax residents in a country with which Slovakia has a double taxation treaty (“DTT”), if they can establish their tax residence in that other country under the residence “tie-breaker” rules of the relevant DTT.

However, this change may affect individuals who reside in countries with which Slovakia does not have a DTT, and those who do not have tax resident status in any other country.  Others may find that although they are currently tax residents in a treaty country, their newly-acquired Slovak tax resident status will cause a transfer of their tax residence to Slovakia under the tie-breaker rules.  

FOOTNOTE

1  For the Slovak text of the amendment of the Income Tax Act as approved by the Parliament, click here.

The information contained in this newsletter was submitted by the KPMG International member firm in Slovakia.

© 2018 KPMG Slovensko Advisory k.s., a Slovak limited partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

Flash Alert is an Global Mobility Services publication of KPMG LLPs Washington National Tax practice. The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Connect with us

 

Request for proposal

 

Submit