Slovakia legal and accounting and tax considerations in 2023
- Tax returns must be filed monthly or quarterly on an annual basis filled within three months from the end of the tax period;
- Losses that are filled after 1st of January 2014 can be carried forward for up to four years. Losses cannot be carried back;
Corporate tax considerations
- Corporate income tax in Slovakia is 21% rate;
- Late payments of corporate tax will either i) start to accumulate interest or ii) incur direct fine of up to €32,000;
- The standard Value Added Tax (VAT) in Slovakia is flat 20% with lower 10% applied to medical products;
- The minimal threshold for mandatory VAT registration is €48,000;
- VAT returns must be filed and paid every month by the 25th;
Withholding tax considerations
- Slovakia does not impose withholding taxation on dividend;
- Withholding taxation on interest and royalties incur 19% withholding tax unless reduces by a double-taxation treaty;
- Royalties and technical service fees paid to a non-resident are subject to a 10% withholding tax, unless reduced by a tax treaty;
Other tax considerations
- Capital gains are taxed at a higher 22% rate, with capital losses not being able to be deducted;
- Employers are required to support all employee social security contributions of fixed to 35.2% of their staff employment salary;
- Slovakia does not implement net wealth tax, which is applicable to other EU countries, including France, Spain and Netherlands;
- Slovakia has signed 63 double taxation avoidance agreements with 63 countries including i) Austria ii) Mexico iii) India and iv) Hong Kong;
How we can help you?
- Healy Consultants will assist our Clients with i) documenting and implementing accounting procedures ii) implementing financial accounting software iii) preparing financial accounting records and iv) preparing forecasts, budgets and performing sensitivity analysis;
- It is important our Clients’ are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Healy Consultants’ help to clarify your annual reporting obligations.
- The Ministry of Justice operates Online Business Register portal which provides both resident and non-resident individuals and companies to view specific information about Slovakian companies including: i) company’s name, address and Identification Number (IČO) ii) legal registered office address iii) shareholder personal information and contributions and iv) current standing status;
- The minimum share capital requirements in Slovakia are i) €5,000 for a limited liability company (SRO) and ii) €25,000 for a joint stock company (AS);
- All Slovakia joint stock company must appoint two directors and a company auditor. Furthermore, JSCs in Slovakia must maintain a reserve fund of at least 10% of the share capital at incorporation, which must reach at least 20% of the total share capital of the company.
- The main labor regulating body in Slovakia is the Ministry of Labour, Social Affairs and Family and the main code regulating employment is the Slovak Labour Code 2012;
- The labor regulations require each employee to receive their employment contract in both Slovak and, if necessary, in another language they can understand;
- The minimum probation (trial) period cannot exceed three months or six months for certain managerial positions During trial period the minimum termination notice is one month;
- The minimum wage in Slovakia is fixed at €380 from January 2015;
- In accordance with the Slovakian Labour Code 2012 the standard work week: i) cannot exceed on average a maximum of 48 hours of work with 40 hours as average and ii) included five working days from Monday to Friday;
- In Slovakia all employees are granted:
- Up to 20 calendar days of paid annual leave;
- 15 days of national holidays;
- 60 days sick leave paid at full hourly wage;
- 34 weeks of paid maternity leave.
- The employer is allowed to terminate without prior notice an employee only in few specified cases, including gross misconduct. In every other case, the employer must provide 2 month notice;
- All claims from labor conflicts must be deposited to the applicable district court, as settlement body;
- Laid off employees are entitled to a severance pay equal to two month salary.
Other business regulations
- Slovakia joined the European Union on the 1st of May, 2004 and the Eurozone on the 1st of January, 2009. Consequently, multiple business laws follow the European Union guidelines;
- The country is part of the Schengen Area since 21 December 2007 allowing border-free travel of up to 400 million citizens;
- Slovakia is a member of the multinational military alliance named North Atlantic Treaty Organization (NATO), agreeing on the terms of mutual defense between member countries;
- Along with Czech Republic, Poland and Hungary, Slovakia is part of the Visegrad Group, working together in a number of fields of common economic and cultural interests;
- Slovakia and Czech Republic are part of an advanced Customs Union optimizing import-export duties and making trade easy;
- Slovakia is a member of the World Intellectual Property Organization, since 1994 which consequently allows i) non-resident companies to apply for patent or a trademark free and ii) foreigners the same intellectual property protection rights as Slovakian nationals;
- Slovakia accepted the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the New York Convention). As a result, arbitration case awards made in countries that are party to this convention should be enforceable in Slovakia according to implied regulations.