Slovakia: Tax Update 2020

11. March 2020

Tax highlight slovakia TPA

1. Changes of Income Tax 2020

The most important approved changes of Income Tax effective as of 1 January 2020 are:

  • introduction of progressive taxation – the income tax rate in subjects with turnover up to EUR 100,000 shall change from 15%;
  • adjustment of the terms and conditions for tax loss carry forward, namely the abolition of the straight-line basis of the tax loss deduction and the extension of the deduction period to 5 years; can only be deducted a tax loss of up to 50% of the calculated tax base from which the loss can be deducted;
  • increasing the threshold for the obligation to pay income tax advances from EUR 2,500 to EUR 5,000;
  • new depreciation group 0 for electric vehicles with a depreciation period of 2;
  • adjustment of expenses, which are part of the tax base after payment;
  • increasing the tax advantage for taxpayers carrying out research and development (deduction of R&D expenditure from the tax base decreased by tax loss); super deduction, up to 200%.

2. Modifications of VAT in Slovakia

The most of modifications from 1.1.2020 in VAT Act are in connection with the harmonisation and simplification of some selected taxation rules for trade between members – quick fixes (new regulation for call-off stock regime, completing of rule for chain transactions, VAT ID No as substantive conditions for VAT exemption, unified proof of intra-community supply).

The extension of the reduced tax rate of 10% on newspapers, magazines and periodicals, and selected types of food.

Doubling a special bank levy

On 28 November 2019, it was in shortened legislative proceedings approved the National Council of the Slovak Republic draft amendment to Act No. 384/2011 Coll., on special levy on selected financial institutions, specifically on banks and branches of foreign banks, which was aimed to increase the rate of the special levy.

The amendment changes the annual rate of the levy for 2020 and subsequent years to an amount of 0.4%. The purpose of this proposed amendment is to increase the financial capacity of funds from the special levy in order to strengthen the financial stability and the ability to deal with potential emergencies.

3. DAC 6

DAC 6 – amendment to the act on cross-border measures subject to reporting

In September 2019, the National Council of the Slovak Republic approved an act amending and supplementing Act No. 442/2012 Coll., on international assistance and cooperation in tax administration, implementing DAC 6. This act establishes the automatic exchange of information on cross-border measures subject to communication between competent EU member state authorities, i.e., the measures used for aggressive tax planning. In order to ensure that automatic exchange of information, a reporting obligation of the so-called obligators (intermediary or taxpayer, i.e. the user) has been established.

 

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