Tax News: Lex Consolidation | UPDATE

The government of the Slovak Republic has approved and filed to the Slovak Parliament for further proceeding the so-called “lex consolidation” representing a set of measures amending the particular acts.

Please note that these changes have not yet been approved by the Slovak Parliament, they represent only the proposed measures and during the process of negotiation may be subject to further changes.

The following changes are proposed by the government:

Changes from 1 January 2024

Re-introduction of the minimum tax for legal entities

- Minimum tax paid by the taxpayers whose tax liability calculated in the tax return is lower than the determined amount of the minimum tax for the taxpayer, i.e. even if a tax loss is reported.

- Amount of minimum tax varies from EUR 340 up to EUR 3,840 depending on the income achieved. If the taxpayer employs handicapped people (at least 20%), the minimum tax is decreased to half amount.

- The paid minimum tax can be offset with the calculated tax liability in the amount exceeding the minimum tax during the three immediately consecutive tax periods.

The increase of the tax rate on profit shares (dividends) from 7% to new 10 %

- 10% tax rate will apply to payments of profit shares (dividends) from profit reported for the period beginning on 1 January 2023 at the earliest.

Increase of the health insurance contributions rate

- employer from current 10% to new 11%, if employing handicapped people from current 5% to new 5,5%

- freelancer from current 14% to new 15%, in case of handicapped person from current 7% to new 7,5%

- self-payer from current 14% to new 15% of an assessment base.

Special levy on businesses in regulated industries

- Re-introduction of the special levy on banks that will be calculated from their profit using the particular rate.

- It is proposed to extend the scope of regulated person performing their activities in Slovakia based on permission of the National Bank of Slovakia – subject to levy will be also the branches of foreign persons.

Other important changes

- For the application of the reduced 15% income tax rate there is proposed definition of the income threshold as EUR 60,000.

- Change of contributions to the II pillar of retirement savings from 5.5% to 4% (distributed by the Social Insurance Company; the amount of social contributions paid by employer/employee does not change)

- Increase of VAT rate in gastronomy for alcohol from 10% to 20% (increased tax rate does not apply to food and soft drinks)

- Changes in excise duty on alcohol

Changes from 1 February 2024

Increase of the excise duty on tobacco

Changes from 1 April 2024

Valorisation of administrative and court fees