Slovakia: Domestic Corporate Taxes

On this Page:

- SLOVAKIA SCOPE OF INCOME TAX
- SLOVAKIA INCOME TAX RATES
- SLOVAKIA CALCULATION OF TAXABLE BASE
- SLOVAKIA FILING REQUIREMENTS AND PAYMENT OF TAX
- SLOVAKIA WITHHOLDING TAXES
- SLOVAKIA SALES TAXES AND VAT

Slovakia Scope of Income Tax

Slovak-resident companies pay tax on their worldwide income. Foreign companies operating in Slovakia are taxed only on revenue derived from business activities within Slovakia. Corporate income tax is levied on legal and other entities (e.g. non-profit organisations), and there is no concept of group taxation.

BACK TO TOP

Slovakia Income Tax Rates

Corporate income tax is paid at a flat rate of 19%. The rate was as high as 29% in 2002, when it was reduced to 25% before being lowered to the current rate.

BACK TO TOP

Slovakia Calculation of Taxable Base

Tax is paid on the taxable profit shown in a company’s financial accounts, which must comply with Slovakian accounting standards. Allowances are made for deductible and non-deductible items. Expenses are tax deductible if incurred to maintain the profitability of the company, though there are certain exceptions. Tax losses can be carried forward over five consecutive years without any restrictions. Depreciation is calculated using either the declining balance or straight-line method – whichever is more beneficial to an individual business.

Capital gains are added to revenue and taxed at the same rate as normal income. There is no taxation of dividends. Tax on interest (taxed at source) and royalties on patents is 19%. There is no capital duty or payroll tax.

There are no local business taxes in Slovakia.

Slovakia Filing Requirements and Payment of Tax

The tax year ends on December 31. A limited company is required by law to submit its financial statements by March 31. A limited company must make advance payments, monthly or quarterly; the frequency depends on the previous year’s payments made. Small businesses only have to make one advance payment.

Penalties may be incurred if returns are filed late. These can be via late payment interest on outstanding taxes due or prepayment and fines, which can be heavy.

BACK TO TOP

Slovakia Withholding Taxes

Withholding tax regulations apply to interest, royalties and capital gains. Dividends paid before 2004 to a direct EU shareholder with a share of more than 25% are not subject to withholding tax. Exceptions covering EU interest and royalties are included in the Slovak Income Tax Act. No withholding tax on dividends is charged on profits arising from 2004 onwards. Certain cases, including the sale of real estate in Slovakia, are not subject to withholding tax if paid to residents of the EU.

Slovakia Sales Taxes and VAT

The standard VAT rate is 19%. A reduced rate of 10% applies to medicine and certain pharmaceutical products, books and brochures. A VAT refund is normally offset against the following month’s tax liability, but will be refunded by the tax authority if it cannot be deducted in the next VAT return.

VAT is payable on imports, but in many cases there is no VAT on exports. Exemptions to VAT include financial services, banking and insurance. Property rental is also exempt. An enterprise with a turnover in excess of EUR49,790 per year must register for VAT. Reporting is done either monthly or quarterly and VAT due must be paid by the 25th day following reporting.

Excise duties are payable on alcohol, tobacco, leaded and unleaded fuel, and industrial and commercial fuel.

BACK TO TOP