An amendment to the Income Tax Act (ITA) effective from 30 December 2020 has introduced the following changes (in certain cases, the effectiveness is postponed until 1 July 2021 or 1 January 2022):
- From the tax period commencing on 1 January 2021, only taxpayers (legal entities and individual entrepreneurs) whose taxable income does not exceed 49,790 euros (EUR) will be able to apply the reduced tax rate of 15%.
- As part of the Slovak financial administration activities against tax evasion, the rules for taxation of controlled foreign companies (CFCs) will be extended to natural persons.
- In relation to the implementation of Council Directive (EU) 2017/952 as regards hybrid mismatches with third countries (ATAD 2), a provision concerning the taxation of a reverse-hybrid entity has been added to the ITA.
- The definition of a taxpayer from a non-cooperating jurisdiction and the rules for payments of income tax advances have been amended.
As part of the amendment to the ITA, the Tax Administration Act (Tax Code) has also been amended. The minimum annual interest rate that applies to a deferral of tax payments and tax payments in instalments decreases from 10% to 3%.
Note that the legislation is expected to be subject to frequent amendments and new official interpretations; consequently, it is advisable to contact PwC Slovakia for up-to-date information.