As a member state of the Organisation for Economic Co-operation and Development (OECD), the Slovak Republic’s (Slovakia's) system of corporate taxation generally follows OECD guidelines and principles.
The corporate income tax (CIT) applies to the profits generated by all companies, including branches of foreign companies.
Slovak tax residents are taxed on their worldwide income. Slovak tax residents may utilise a method of elimination of double taxation if their income is taxed abroad. The exemption or credit method can be used to eliminate the double taxation, depending on the relevant double tax treaty (DTT) and the type of income.
Slovak tax non-residents are taxable in Slovakia on their Slovak-source income only. Slovak-source income is defined by local tax law and includes, inter alia, the business income of permanent establishments (PEs) and passive types of income, such as royalties, interest, and income from disposal of assets.
The standard CIT rate for 2023 is 21%. The reduced CIT rate for 2023 at 15% is applicable for corporate taxpayers and entrepreneurs and self-employed individuals that achieve taxable income (revenues) up to EUR 49,790 for the relevant tax period.
Withholding tax (WHT) of 7% may apply to certain taxable dividend payments to individuals.
Further, some income, such as interest or royalties, may be subject to a 19% WHT rate. A specific 35% WHT rate applies for payments to taxpayers from non-cooperative jurisdictions (i.e. where no DTT or tax information exchange agreement [TIEA] exists, the taxpayer is from a jurisdiction that is listed in the European Union’s [EU's] List of Non-Cooperating Countries or a state that does not apply CIT, or a zero CIT rate applies) or where the beneficial owners of the income cannot be identified, including payments of taxable dividends.
Local income taxes
Slovakia does not have local, state, or provincial CIT.