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16.06 2015

Proposed changes in Slovak tax legislation from 1 January 2016

Please allow us to present you with the proposed changes in the tax legislation from 1 January 2016 in the form of a short newsletter

  • Draft amendment to the Act on Income Tax - the taxation of legal persons,
  • Draft amendment to the Act on Income Tax - the taxation of individuals,
  • Draft amendment to the Act on VAT
  • Draft amendment to the Tax Code

Draft amendment to the Act on Income Tax - legal persons,

At present there is a draft amendment to the Act on Income Tax that is currently in an inter-ministerial review procedure and that includes several proposals in the area of the taxation of legal persons. We have selected the following for you:

  • The proposed change in legislation is intended to clarify and supplement the definition of the term "advisory and legal services", whose tax deductibility is conditioned by an actual payment as of the beginning of the year 2015. The condition of payment, in terms of the supplemented classification codes, should be subject to accounting services, conducting accounting books, auditing services and tax consultancy (code 69.2). Within the legal professions the tax deductibility conditioned by payment should be applied to consulting and representation as different kinds of proceedings, including notary services (code 69.1).
  • The tenants of administrative buildings will no longer be obliged to reduce the tax net book value of technical improvements performed by them in cases where the net book value is higher than the income from the financial settlement with the landlord in respect to the technical improvement in question at the end of the lease. With landlords, the mode of the application of the depreciation of leased assets after the termination of the lease will be specified, if the property is not re-rented.
  • Another proposed change offers the opportunity to include the travel expenses provided beyond the provisions of the Act on Travel Expenses into the tax deductible expenses of the employer, if such income is considered as taxable income for the employee.


Draft amendment to the Act on Income Tax - individuals,

  • The amendment to the Act considers to introduce a special tax base for income from capital assets. A tax rate of 19% should be applied to the special tax base in question, while the draft amendment does not take into account the amount of the total annual income of the taxpayer. The proposed changes are intended to make investments in the capital market more attractive.
  • Legislators are also considering exempting income that a physical person receives from the transfer of securities, options and income from derivative transactions, if this income results from long-term investment savings under special regulations, including income paid after 15 years from the beginning of the savings. The advantage in question should, within the meaning of the proposal, apply to income arising from the transfer of securities acquired during the course of savings. If a taxpayer has breached the terms of the long-term investment savings, such a taxpayer will have to include those exemptions to the income tax base in the tax period in which the violation of the terms occurs.
  • It is also being proposed to exempt income from the sale of securities traded on a regulated market, if the period between acquisition and sale exceeds one year.

Draft amendment to the Act on VAT

The main proposed changes in which effectiveness should be from 1 January 2016 include:

  • Tax liability after receiving payment from a customer A taxable person established in Slovakia (excluding VAT groups) whose turnover in the previous calendar year did not reach 75,000 Euros and reasonably expects that it will not reach this turnover in the current calendar year, will be able to apply a special mode - to pay VAT only after receiving payment from the customer. However, such taxable person will then only be able to apply VAT deduction after paying its supplier. The taxable person will be obliged to notify the application of the special mode to the tax administrator and provide information on the application of the mode on its invoices . If the taxable person terminates the application of the special mode or ceases to be subject to VAT, it will be liable to pay all value added tax on all deliveries, which in the period in which it applied this special mode, were not paid. If the VAT payer improperly applies any of the obligatory practices of the tax administrator in respect of the stated mode, the tax administrator shall impose a penalty of up to 10,000 Euros. The list of payers who announced beginning or terminating the application of the special adjustments will be published on the website of the Financial authority.
  • Voluntary VAT registration - an interesting proposal for newly established businesses is the forthcoming abolition of the obligation to deposit a tax guarantee for taxable persons who are in the stage of preparatory work for a business and that also apply for VAT registration.
  • New provisions in the transfer of the tax obligation to the recipient - Within the meaning of the legislative proposal, the subject of self-assessment for customers established in the Slovak Republic should also be the delivery of goods in the Slovak Republic except for the delivery of goods by mail order, performed by a foreign entity.

Draft amendment to the Tax Code

The proposed changes to the Tax Code:

  • Submission of forms which structure is determined by law and which a person subject to the obligatory electronic communications delivers by other means than electronically will be considered undelivered.
  • In the case of submissions whose form is not directly determined by law and which a person subject to the obligatory electronic communication delivers by means other than by electronic filing these shall be requested by the tax administrator to be delivered in the proper form.
  • The amendment also envisages the possibility of submitting an additional tax return, even after the commencement of tax inspection, within 15 days. The purpose of this adjustment is to encourage taxpayers, to even after the possible start of a tax inspection, to still be able to adjust the amount of their tax liability, as the submission in question will result in the imposition of lower fines than in the case of levying taxes on the results of tax inspections.

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