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.
Taxable benefit of employer-provided car
The taxable benefit for a car provided by the employer is 1% of the car’s purchase price for each calendar month or partial month during which the car is available for business and private use. Fuel costs paid by the employer for an employee’s private use are also a taxable benefit, as is the reimbursement of travel expenses in excess of statutory limits.
Computation of benefit-in-kind resulting from the use of a company car for business and private purposes should reflect the period of using the car. An employee's income for every calendar month (that is even started) of using the car for business and private purposes will include 1% of the employer's car acquisition price (including VAT) in the first year of putting the car into use. In the next seven calendar years, the employer's car acquisition price (including VAT) should be annually decreased by 12.5% as of the first day of each calendar year for this purpose.
Provision of meals to employees and tax on employment income
The tax-free amount related to the provision of meals to employees has been changed. As of 1 June 2023, only the employer’s contribution of up to 55% of the value of the meal allowance provided for a business trip lasting 5 to 12 hours, i.e. currently up to EUR 4.02, will be exempt from the employees’ employment income tax, regardless of the form in which the meal is provided.
This means that regardless of whether an employer provides meals via its own canteen, in a canteen of another employer, via a third person, a meal voucher, or a financial meal allowance, the amount of the employer’s meal allowance exceeding EUR 4.02 will be the employee’s taxable income, except for the part of the allowance provided from the employer’s social fund.
There is no separate capital gains tax in the Slovak Republic. Gain on the sale of non-business property is exempt from taxation if the individual owned property for minimum of five years or has used the property for non-business purposes for longer than five years.
Capital gains enter into the individual’s tax base and are subject to income tax.
Capital gains from the sale of shares listed on a recognised stock exchange are exempt from tax if held for more than one year. Further, income from special saving schemes are also exempt from tax if participation lasts for at least 15 years and certain other conditions are met.
From 1 January 2024, income from the sale of shares in a joint stock company that are not listed on a regulated market or on a similar foreign regulated market will be exempt from tax for the natural persons if shares are held more than three years. The exemption should apply to any shares both acquired before and after 1 January 2024.
The recently approved amendment of the ITA changed taxation of dividend income in Slovakia. Dividend income from profits arising from 2004 to 2016 is not subject to Slovak tax (subject to anti avoidance provisions). However, the dividend income from profits arising from 1 January 2017 and later years will be subject to a 7% tax rate (WHT applies if paid from a Slovak company). The same 7% tax rate will also apply to dividend income arising from profits before 2004.
Taxable investment income includes interest and other yields from securities, interest, winnings, income from savings on deposit accounts, yields from supplementary pension insurance, and yields from life insurance after passing a certain age. Some of these types of income are subject to WHT, unless they are received from abroad, in which case they are treated as part of the tax base. The WHT may be reduced under DTTs for individuals who are not Slovak tax residents. Income from bonds arising to a foreign taxpayer is not subject to taxation in Slovakia.