No deductions are available from income from employment, except for statutory health and social insurance contributions. Sums received by way of reimbursement of expenses incurred in connection with employment are exempt from tax, provided they do not exceed the statutory limits and are not aimed for private use.
Deduction from certain income from capital
An annual deduction of up to EUR 500 is available from certain types of income from capital, including gains on the sale of shares, and rental income from real estate.
The personal allowance of 21 times the minimum subsistence amount announced on 1 January each year is available to all individuals whose annual tax base does not exceed a certain limit. If the tax base of a taxpayer exceeds a certain limit, the personal allowance is reduced to nil progressively, based on a formula.
For 2023, the personal allowance is set at EUR 4,922.82 based on the minimum subsistence amount valid on 1 January 2023. Individuals whose tax base for 2023 is higher than EUR 21,754.18 cannot apply the entire non-taxable personal allowance. Their personal allowance is reduced to nil progressively, based on a formula, so that those with an annual tax base equal to or higher than EUR 41,445.46 in 2023 are not entitled to any personal allowance.
A dependent spouse allowance of up to 19.2 times the minimum subsistence amount can also be claimed in 2023 by Slovak tax residents with permanent residence in Slovakia, provided the spouse does not have income in excess of the allowance amount (i.e. EUR 4,500.86 in 2023). The amount of the spouse allowance depends on the level of the individual’s and spouse’s 2023 incomes and is based on a formula. However, if the individual's tax base is equal to or higher than EUR 41,445.46 in 2023, the individual will not be entitled to any spouse allowance. A Slovak tax non-resident can claim the spouse allowance only if 90% of one’s worldwide income is from Slovak sources.
Personal and dependent spouse allowance can decrease only the income from employment, business, or other self-employment.
The spouse allowance is applied only if the spouse is living with the taxpayer in the common household and is taking care of a dependent child, receives a cash allowance for nursing, is registered with an employment centre and is actively seeking a job, is considered a disabled individual, or is a severely disabled individual.
Private entrepreneurs may deduct ordinary business expenses incurred to maintain, secure, and generate business income, provided they keep accounts recording their income and costs. For rental income, the costs should be recorded in the sequential order.
As an alternative, an entrepreneur (apart from a person having just rental income) who is not a Slovak VAT payer can opt to deduct lump-sum expenses of 60% (up to yearly amount of EUR 20,000) of income in order to determine the taxable income. In this case, actual business expenses or rental costs are not tax deductible.
Tax bonus for young people on mortgage interest paid
Individuals between 18 and 35 may deduct 50% of the interest paid on mortgage during five years, up to EUR 400 monthly and from maximum base of EUR 50,000 per property. Interest bonus is claimed by individuals whose average monthly income is up to 1.3 times the average monthly salary of employees in the economy.