Key tax factors for efficient cross-border business and investment involving Slovakia.
|Bosnia & Herzegovina||Iceland||Mexico||Sweden|
|Denmark||Rep. of Korea||Portugal||Ukraine|
Notes: (a) Treaty signed but not yet in force
Limited liability company (s.r.o.), joint-stock company (a.s.).
Limited liability company (s.r.o.): at least EUR 5,000,
Joint-stock company (a.s.): at least EUR 25,000.
A company is resident if it has been incorporated in Slovakia or if its place of effective management is in Slovakia.
Resident companies are taxed on their worldwide income. Non-resident companies are taxed on their Slovak source income only.
The corporate income tax return must be filed within 3 months from the end of the respective taxable period (usually the calendar year, but can be changed to a different financial year). However, based on the written notification submitted to the relevant tax authorities by the date prescribed for the filing of the tax return, the deadline for filing can be extended:
The standard corporate income tax rate is 21 percent.
No withholding tax on dividends paid to non-resident companies (except for distributions of profits generated before 2004).
35 percent on dividends paid to a taxpayer in a non-tax treaty country distributed out of profits derived in taxable periods starting on and after January 1, 2017. Distributions to non-white list countries from profits realized in taxable periods starting on and before December 31, 2016 (subject to exception mentioned above) continue to be exempt from WHT.
No withholding tax applies to dividends paid to EU parents, regardless of the year in which the profit was earned (due to the domestic law implementing the EU Parent-Subsidiary Directive), if the following conditions are fulfilled:
Generally 19 percent, but exemption for interest paid to EU-associated companies (due to the domestic law implementing the EU Interest and Royalties Directive):
The rate may also be reduced under DTTs. 35 percent on interest paid to taxpayer in non-tax treaty state.
Generally 19 percent, but exception for royalties paid to EU-associated companies (due to the domestic law implementing the EU Interest and Royalties Directive):
The rate may also be reduced under DTTs. 35 percent on royalties paid to taxpayer in non-tax treaty state.
Generally 19 percent on fees for technical advisory services provided by non-residents in the territory of the Slovak Republic. Benefit from DTT may be sought.
Withholding tax must be applied on specified categories of income originating from sources in the territory of the Slovak Republic.
Exemption, except for distributions of profits generated before 2004.
For dividends distributed by an EU resident subsidiary whose share capital is directly held as to 25 percent, the exemption applies regardless of the year in which the profit was earned (due to the domestic law implementing the EU Parent-Subsidiary Directive).
In accordance with the amendment of the EU Parent-Subsidiary Directive, in order to avoid the tax evasion related to hybrid instruments, the profit shares (e.g. dividends) are not subject to tax only to the extent that they are not a tax expense of the distributor of the profit share.
Dividends received from non-treaty states are subject to tax at the rate of 35 percent if distributed out of profits for taxable periods starting on and after January 1, 2017.
In principle, taxable as ordinary income: taxation of capital gains from Slovak sources, on the sale of moveable assets of a PE, shares and securities in a Slovak entity if sold by a non-resident to a Slovak entity or if the non-resident company owns real estate in Slovakia with an accounting value totaling more than 50 percent of the company's equity (may be reduced/exempted by application of DTT).
As of January 1, 2014 tax losses can be carried forward in equal parts over 4 years. Provisional conditions to the Income Tax Act stipulate that any tax losses reported from 2010 to 2013 not utilized until January 1, 2014 can only be carried forward in four equal portions.
No, only minimal stamp duties when a company is being registered or changes to registration in the Commercial Register.
The real estate tax consists of three different types of taxes:
The tax return for real estate tax must be filed before January 31 of the year for which this tax return is filed.
Implemented in Slovak tax legislation, but only applicable as of January 1, 2019.
OECD Transfer Pricing Guidelines apply. Very broad definition of 'related parties'. As of January 1, 2015 transfer pricing rules apply also between Slovak entities.
As of January 1, 2009, there is an obligation for foreign-related parties to keep specific transfer pricing documentation. Detailed requirements for such documentation were issued by the Ministry of Finance.
As of 2014 the taxpayer is obliged to submit local transfer pricing documentation to the tax authorities upon request (i.e. not only during the course of a tax audit), within 15 days of receiving the request.
As of January 1, 2015, domestic related parties are also required to maintain transfer pricing documentation.
Earning stripping rules: In the tax periods commencing on or after January 1, 2015, interest and other expenses related to loans received from a related party exceeding 25 percent of an amount in principle corresponding to EBITDA will be tax non-deductible. The rules apply to related parties - in line with the definition of related parties for transfer pricing purposes, i.e. to foreign and domestic related parties. These rules do not apply to certain financial institutions, e.g. banks, insurance companies, re-insurance companies.
Tax authorities may issue binding advance rulings on transfer pricing issues and for the determination of the taxable base of a PE only.
As of September 1, 2014, it is possible to request a binding opinion from the Financial Directorate, on the application of tax laws in specific areas.
Yes. A company may file an application for R&D incentives after the Ministry of Education publishes a call for submissions. A successful application results in tax relief, which is computed as a proportional part of the tax due.
Investment incentives can be granted if the particular conditions and all the administrative requirements are met.
The standard rate is 20 percent and the reduced rate is 10 percent. VAT grouping is possible.
In principle, 'substance over form' rule in the Tax Administration Act applies to any planning structure.
KPMG in Slovakia