Bratislava

Taxation in Bratislava, Slovakia

What are the tax rates in Bratislava, Slovakia? How are corporations taxed? Here’s Teleports overview of personal, corporate and other taxation topics in Bratislava, Slovakia.

Personal taxation in Bratislava

Effective personal income tax rate

Annual income$25,000$40,000$80,000$125,000$200,000
Rate19%20%22%23%24%

Teleport city rankings for personal income tax

Personal taxation puts Bratislava in position 52 of all Teleport Cities.
WORSTBEST

Basis

Slovak residents are taxed on worldwide income; nonresidents are taxed only on Slovak-source income.

Residence

An individual is resident if he/she has a permanent address in Slovakia or spends more than 183 days during a calendar year in the country.

Filing status

Individuals must file separate tax returns; joint filing is not permitted.

Rates

The individual income tax rate is 19% up to a tax base of EUR 35,022.31 (adjusted on an annual basis), and 25% on the excess.

Deductions and allowances

Subject to certain restrictions, deductions are granted for compulsory health and social contributions, up to specific limits. Personal allowances are available to the taxpayer and his/her spouse, children and dependents if certain requirements are met.

Taxable income

Employment income, including most employment benefits, is taxable. Profits derived from the carrying on of a trade or profession generally are taxed in the same way as profits derived by companies. Investment income in the form of dividends is not subject to Slovak tax.

Capital gains

Capital gains generally are included in the aggregate income, although gains from the sale of assets used to generate income or to carry on a business or independent profession are treated as business and independent professional income.

Other taxes on individuals

Real property tax

Tax is levied by the municipal authorities on the ownership and occupation of real property.

Social security

The social security system consists of social security and health insurance contributions. If an individual is on the Slovak payroll, the employer withholds social security on a monthly basis. A self-employed individual also must make pay-related insurance contributions, with the amount based on the individual’s "salary."

Compliance for individuals

Penalties

Penalties apply for failure to comply with filing and/or payment obligations. The percentage of the fine depends on the form of assessment of the additional tax (e.g. whether the additional tax is levied during a tax audit or as a result of the filing of an additional tax return).

Filing and payment

Tax on employment income is withheld by the employer and remitted to the tax authorities. In general, income other than employment income is self-assessed. Individuals must file a tax return and make monthly or quarterly prepayments of tax during the calendar year.

Corporate taxation in Bratislava

Teleport city rankings for corporate income tax

Corporate taxation puts Bratislava in position 219 of all Teleport Cities.
WORSTBEST

Basis

Residents are taxed on worldwide income; nonresidents are taxed on Slovak-source income only. Foreign-source income derived by residents is subject to corporate income tax in the same way as Slovak-source income. Branches are taxed the same as subsidiaries.

Taxation of dividends

Dividends paid/received are not generally subject to tax in Slovakia. However, as from 1 January 2016, dividend income made out of profits generated after 1 January 2004 are exempt from tax in the extent in which it has not been tax deductible at the level of the payer of the dividends (i.e. hybrid finance instruments).

Residence

A company is resident if its seat or place of effective management is in Slovakia.

Losses

Tax losses declared after 1 January 2014 may be carried forward and deducted equally from the tax base over four years. Losses may not be carried back.

Incentives

Investment incentives may be available to start new production or the provision of services, to expand or modernize production or the provision of services, or for R&D. These incentives are subject to special rules in the State Aid Act and the Investment Stimulus Act.

Alternative minimum tax

Yes, ranging from EUR 480 to EUR 2,880.

Taxable income

Corporate income tax is imposed on a company’s accounting profits adjusted for deductible, nondeductible and nontaxable items. Normal business expenses may be deducted in computing the tax base.

Capital gains

Capital gains are taxed at 22%. In some cases, capital losses are nondeductible.

Other taxes on corporations

Real property tax

The municipal authorities levy rates on the ownership/ occupation of real property. Rates are deductible in calculating the corporate income tax liability.

Social security

The employer is required to make pay-related insurance contributions at 35.2% of an employee’s gross salary. The insurance contributions are capped.

Compliance for corporations

Consolidated returns

Consolidated tax returns are not permitted; each company must file a separate return.

Penalties

Penalties for noncompliance with the tax law fall into two main categories: (1) late payment interest on outstanding tax liabilities, which is calculated as an annual percentage on the outstanding amount; and (2) fines, usually up to EUR 32,000 or calculated as a percentage of the underpaid tax. As from 1 January 2016, penalties for noncompliance depend on the length of time that has passed since the tax return was filed. The percentage of the fine depends on the form of the assessment of the additional tax (e.g. whether the additional tax is levied during a tax audit or is the result of the filing of an additional tax return).

Rulings

Advance pricing agreements are possible only in limited cases (i.e. in respect of a transfer pricing methodology and the method for determining the tax base for permanent establishments). Agreements are valid for up to five taxable years. Binding rulings may be issued only in limited cases.

Tax year

The tax year generally coincides with the calendar year, although the taxpayer can elect a different fiscal year. The tax period may be shorter, for example, if the company moves from a calendar year to a fiscal year.

Filing requirements

Slovakia operates a self-assessment regime. In general, corporate income tax prepayments are due in monthly or quarterly installments. Income tax is assessed on the basis of annual returns, which must be filed within three months following the end of the tax period. The deadline for filing can be extended by three months if a written request is submitted to the tax authorities, or by six months if a taxpayer derived foreign-source income taxable in another jurisdiction and the written request is submitted. However, the taxpayer must pay any tax due by the filing date.

Other taxation in Bratislava

Value added tax

Filing and payment

The standard assessment period is the calendar month. A registered person can apply for a calendar quarter assessment period if its turnover is less than EUR 100,000 in the preceding 12 consecutive months and the person has been registered for VAT for at least one calendar year.

Rates

The standard rate is 20% , with a reduced rate of 10% applying to certain pharmaceutical and medical products and certain groceries (e.g. meat, bread, etc.). Certain supplies (e.g. financial and insurance services) are exempt.

Taxable transactions

VAT is imposed on the sale of goods and the provision of services, and on imports.

Registration

All individuals or legal entities that carry out economic activities in Slovakia are regarded as taxable persons. The registration threshold for VAT purposes is taxable turnover of EUR 49,790 within the preceding 12 consecutive calendar months. Taxable persons below the threshold can apply for voluntary registration. Nonresidents that make taxable supplies of goods or services in Slovakia must register before the supply is made, unless the reverse-charge mechanism is applied by the recipient of the supply.

Anti-avoidance rules

Transfer pricing

Slovakia’s transfer pricing rules generally follow OECD guidelines. The transfer pricing rules were extended in 2015 to apply to transactions between domestic related parties, as well as those between a Slovak resident and a nonresident related party. Taxpayers must prepare contemporaneous documentation to substantiate the transfer pricing methodology used in determining transfer prices in related party transactions.

Thin capitalization

Thin capitalization rules restrict the maximum amount of tax deductible interest on related party (foreign and domestic) loans (new and old) to 25% of the taxpayer’s EBITDA.

Investment basics

Foreign exchange control

No restrictions are imposed on the import or export of capital, and repatriation payments may be made in any currency. Both residents and nonresidents can hold bank accounts in any currency.

Accounting principles/financial statements

Slovak Accounting Standards/IFRS apply for large companies, banks and insurance companies. Financial statements must be prepared annually.

Principal business entities

These are the limited liability company, joint stock company, general partnership, limited partnership, cooperative, sole proprietorship and branch of a foreign corporation.

Withholding tax

Dividends

Slovakia does not impose withholding tax on dividends.

Interest

Interest paid to a nonresident is subject to a 19% withholding tax, unless the rate is reduced under a tax treaty or exempt under the EU interest and royalties directive. A 35% rate applies where the payment is made to a resident of a “listed” jurisdiction (usually a tax haven).

Royalties

Royalties paid to a nonresident are subject to a 19% withholding tax, unless the rate is reduced under a tax treaty or exempt under the EU interest and royalties directive. A 35% rate applies where the payment is made to a resident of a “listed” jurisdiction (usually a tax haven).