Value-added tax (VAT)
A basic VAT rate of 20% applies to all taxable supplies, with certain exceptions. Certain medical products, printed materials and media, various foodstuffs and ‘basic goods’ (e.g. milk, butter, meat) classified under selected codes of the Common Customs Tariff, and some accommodation services have a VAT rate of 10%.
The threshold for obligatory VAT registration for taxable persons with their seat or permanent address, place of business, or VAT establishment in Slovakia is a turnover of EUR 49,790 for the previous consecutive 12 calendar months. Voluntary registration is also possible. Upon VAT registration, all bank accounts used for business purposes related to Slovak VAT registration have to be announced to the Tax Office.
More taxable persons established in Slovakia (i.e. with a seat, place of business, or VAT establishment in Slovakia) can create a VAT group if certain conditions are met.
A VAT registration obligation in Slovakia arises for foreign persons (taxable persons without a seat or VAT establishment in Slovakia) before commencing activities subject to Slovak VAT where they could be liable to pay Slovak VAT, except import of goods. There is a list of supplies that foreign taxable persons can perform in Slovakia without a need to register for Slovak VAT, including mainly:
- Supplies subject to VAT reverse-charge.
- Supplies subject to triangulation simplification performed by the first customer in a chain.
- Intra-Community supplies of imported goods if represented by a tax representative.
- VAT-exempt transport and supplementary services related to export and import.
- VAT-exempt supplies without credit entitlement.
- Distance sales to non-taxable person using the One Stop Shop (OSS) scheme.
This list, among others, includes local supplies of goods and specific services to taxable persons established in Slovakia as such supplies are subject to local VAT reverse-charge mechanism (i.e. person liable to pay VAT on such supplies is the customer).
Foreign taxable persons registered for Slovak VAT are not entitled to deduct input VAT via Slovak VAT return if such input VAT relates only to supplies subject to VAT reverse-charge. Foreign companies are able to claim Slovak input VAT via the VAT refund procedure, provided they meet the stipulated conditions. If the foreign VAT payer that is entitled to a full VAT refund via a specific EU VAT refund application acquires goods in Slovakia from EU countries, its acquisition of goods in Slovakia from another member state is considered as VAT exempt.
Exempt supplies without credit entitlement include, among others, certain postal services, financial and insurance services, education, public radio and TV broadcasting services, health and social services, the transfer and leasing of real estate (with exceptions), and lottery services. There are also exempt taxable supplies with credit entitlement, for example financial and insurance services provided to the customer established outside of the European Union, supply of goods to other EU member states, certain import of goods, and export of goods and services.
A special regime for payment of VAT by a supplier based on receipt of payment for supplied goods or services (‘cash accounting’) is available in Slovakia in very specific cases. This regime postpones the obligation to pay VAT until the customer pays the supplier for the supply. This cash accounting scheme can only be used by Slovak-established entities (i.e. with a seat, place of business, or fixed establishment in Slovakia) provided they meet certain conditions.
Supplies of certain types of goods and services between two Slovak VAT payers are subject to local reverse-charge. Such supplies, among others, include supplies of real estate, metal waste and scrap metal, agricultural crops, iron and steel, mobile phones and integrated circuit devices, etc. Local reverse-charge also applies to supply of construction works, supply of building or parts of buildings under construction, and some supplies of goods with assembly and installation. For such supplies, the supplier will not charge VAT on the issued invoice and the recipient must apply a reverse-charge.
Under specific conditions, VAT payers (creditors) can decrease the tax base and VAT if customers (debtors) fail to fully or partially pay for domestic supplies and the receivable becomes irrecoverable.
Slovakia implemented EU quick fix rules into the Slovak legislation and new EU rules for taxation of cross-border business-to-consumer (B2C) supplies of goods (e-commerce) and introduced One Stop Shop (OSS) and Import One Stop Shop (IOSS) schemes.
Goods imported from non-EU countries are subject to import customs clearance. Goods exported from the EU customs territory have to be declared for export customs clearance.
To communicate with the customs offices, each person must have an Economic Operator Registration and Identification Number (EORI), which is registered by the customs authorities on request. EORI registration is mandatory for customs clearance.
The European customs nomenclature and customs tariffs are set by EU legislation. Customs procedures are harmonised within the European Union.
Excise tax is charged on the release to tax-free circulation or import of tobacco products, wine, spirits, beer, mineral oil, electricity, coal, and natural gas. The excise tax rate depends on the customs classification of the product.
The excise duty administrator is the Customs Authority. Communication with the Customs Authority must be in electronic form if the company is a VAT payer registered in Slovakia or if it is represented by a tax adviser or attorney.
Immovable property tax
Immovable property tax, which is divided into land tax, building tax, and tax on apartments, is governed by the Act on Local Taxes. Immovable property tax is calculated based on the area of the real estate, its location, and its type, as well as the tax rate of each self-governing region.
The immovable property tax rate may vary significantly. Please find below the spread of the tax charges per square metre.
|Property||Immovable property tax per square metre (EUR)|
|Four floor office building in centre of city of Bratislava||9.00*|
|One floor hall rural area||0.89 to 9.00|
* For each additional floor, add an additional tax of EUR 0.33.
Further, municipalities may opt to impose a local development levy that applies to real estate developments. If a municipality decides to impose the levy, its rate may be between EUR 3 and EUR 35 per square metre.
There are no transfer taxes in the Slovak Republic.
There are no stamp duties or similar taxes on share or other property transfers in the Slovak Republic, although small administrative fees are payable to register such transactions.
There are no turnover taxes in the Slovak Republic.
Taxable remuneration from employment includes all remuneration, whether monetary or non-monetary, including in-kind benefits provided to an employee. Statutory health insurance and social security contributions paid by the employee reduce taxable income. Obligatory employer’s health insurance and social security contributions paid by the employer are not part of the employee’s taxable income.
Employers must keep Slovak payroll records for employees and members of their statutory bodies.
The tax base up to EUR 38,553.01 is taxed at 19%. The exceeding part of the tax base is taxed at 25%.
A tax rate of 7% or 35% applies to taxable dividend income (e.g. dividends from profits generated from 1 January 2017) of individuals starting from 1 January 2017. The higher tax rate applies in case of dividends received from non-treaty jurisdictions.
Income of constitutional authorities from dependent activity is, in addition to the tax calculated as listed above, subject to a special tax rate of 5%.
Social security contributions
Employer’s health insurance and social security contributions total 35.2% of employee remuneration. From 1 January 2022, the maximum assessment base for all types of social insurance was increased to EUR 7,931 monthly. Employers also pay injury insurance contributions of 0.8% of employees' total salary costs per month, which are not capped.
The maximum assessment base for the purposes of health insurance is cancelled for all types of income, except dividend income. Dividend income paid out from the profit generated after 1 January 2017 is no longer subject to health insurance contributions. The rate of health insurance contributions for individuals who receive dividend income paid out from the profit generated before 31 December 2016 (except for dividends from listed shares) is 14% of the assessment base. In general, the payer of the dividend needs to withhold the health insurance contribution on the payment of the dividend.
Special tax on regulated industries
There is a special tax from activities of entities in regulated industries (e.g. energy, insurance and re-insurance, public healthcare insurance, electronic communications, pharmaceuticals, postal services, railway transport, public water distribution and sewerage, air transport). The tax is calculated as a multiple of the tax base, coefficient, and the tax rate. The liability to pay this special tax arises in case the accounting profit exceeds EUR 3 million.
The coefficient (maximum of 1) depends on the amount of income from the regulated activity. As of 1 January 2021, the monthly levy rate is 0.00363 (i.e. maximum 4.356% per annum).
Special tax on banks
The special levy payable by certain financial institutions (bank levy) has been cancelled effective as of 1 January 2021.
Insurance premium tax (IPT)
IPT of 8% applies to non-life insurance premiums in Slovakia and is payable by insurance companies.
Motor vehicle tax
Vehicle tax applies to vehicles that are registered in the Slovak Republic and used for business purposes. The taxpayer is the entity that uses the vehicle for business purposes. The tax rate depends on engine capacity, vehicle size, etc. The motor vehicle tax is administrated by the Tax Office.