Slovakia

Local time: :
Tax Policy

TAX POLICY

Income Tax Rate 19%.

Corporate Tax Rate 19%

Sales Tax / VAT Rate 20%

Personal Income Tax

• Slovak tax residents pay Slovak tax on their worldwide income, subject to relief under Slovak law or an applicable double tax treaty.

• Slovak tax non-residents are subject to tax on their Slovak-source income only.

• The tax year is the calendar year.

• The tax rate is a flat rate of 19%.

Corporate income tax

• The corporate tax rate is 19%.

NOT SUBJECT TO TAX

The following items are not subject to corporate tax:

• Dividends paid out of profits earned after 1 January 2004.

• Liquidation surpluses and settlement amounts paid to shareholders, to which the shareholders are entitled after 1 January 2004.

• Income received by inheritance or donation.

• Income from acquiring new shares due to an increase in share capital from retained profits, or from mergers and demergers.

Property Tax

• Property tax is also governed by the Act on Local Taxes, and is dividend into:

- Land tax;

- Building tax; and

- Tax on apartments.

Land Tax

• Land tax is generally payable by the registered owner of land, or the registered custodian of land that is owned by the state or by a self-governing region, or the lessee, if the lease is to last for at least five years and the lessee is registered in the Cadastral Register, or leases land administrated by the Slovak Land Fund.

• If ownership cannot be determined, the tax is payable by the user of the land.

• The basic tax rate is 0.25% of the tax base, but this is normally changed by the Municipality, and different rates generally apply to different types of land, within certain limits.

Building Tax

• Building tax is generally payable by the registered owner of the building, or the registered custodian of a building owned by the state or by a selfgoverning region, or the lessee of a building administered by the Slovak Land Fund.

• If the taxpayer cannot be determined, the tax is payable by the individual or legal entity who uses the building.

• The basic tax rate is EUR 0.033 for each square metre of ground space occupied by the finished building.

• The tax rate is normally changed, within certain limits, by the Municipality issuing a General Binding Regulation.

• Rates generally depend on the type of building, and the number of floors it has, as well as the Municipality in which it is located.

Tax on apartments

• Tax on apartments is generally payable by the registered owner of an apartment, or the registered custodian of a flat owned by the state or by a self-governing region.

• The basic annual tax rate is EUR 0.033 per square metre of floor area of the apartment.

• The tax rate is normally changed by the Municipality issuing a General Binding Regulation.

Value-added Tax

Starting January 1, 2011 the new standard V.A.T. rate in Slovakia is 20%, replacing the previous 19% rate. The standard VAT rate applies to most goods and services, whilst a reduced rate of 10% applies to pharmaceutical products, some medical aids, depending on the commodity code (as listed in Annex 7 to the Slovak VAT Act), books, and certain similar products.

Exempt supplies

• In general, the exemption without credit applies to postal services, financial and insurance services, education services, radio and TV broadcasting services, health and social services, the transfer and lease of real estate (with some exceptions), and lottery services.

• The exemption with credit includes for example the following transactions:

- the intra-Community supply of goods;

- financial and insurance services, if provided outside the EU;

- triangulation transactions;

- transport of passengers in certain cases; and

- the export of goods outside the EU.

• The sale of construction land is generally subject to VAT. The sale of buildings, including the construction land on which the building stands, after five years from their official approval for use (collaudation), is VAT exempt. However, a VAT payer can decide to charge VAT on the sale. The rent of premises (among some exceptions like parking space) is exempt from VAT. The VAT payer can decide to charge VAT on the lease of a building to another taxable person.
_______________________________
Source: http://www.pwc.com