Embed Size (px)
Citation preview
The most important
legislative changes
in Slovakia as of 2018│eBook
2 | Overview of the most important legislative changes in Slovakia as of 2018
INTRODUCTION
Are you wondering about the most significant
changes in the Slovak legislation with the arrival of
2018?
Our experts have prepared a comprehensive eBook
about the legislative changes in the field of taxes,
payroll and accounting with effect from January 1st,
2018. The aim of the current changes is in particular
to strengthen measures against tax avoidance and
increase tax transparency. The minimum wage
increased and this fact positively influenced also
wage benefits for weekend and night work. Starting
2018 an amendment to the Commercial Code
entered into force and the new GDPR security
requirements and obligations will apply.
Read our eBook and familiarize with the most
important legislative changes that can affect your
business in 2018!
Your Accace team
Your
Your Accace team
3 | Overview of the most important legislative changes in Slovakia as of 2018
LEGISLATIVE CHANGES IN SLOVAKIA IN 2018:
TAX 4
VAT ...................................................................................................................................................... 4
INCOME TAX ....................................................................................................................................... 6
TAX ADMINISTRATION ...................................................................................................................... 9
ACCOUNTING 10
Period of archiving of accounting documents .................................................................................... 10
Notification of financial statements approval ...................................................................................... 10
Stricter penalties for infringement of accounting rules ....................................................................... 10
PAYROLL 11
Increase of minimum wage ................................................................................................................ 11
Wage allowance for weekend and night work.................................................................................... 12
Tax credit for children in 2018 ............................................................................................................ 12
Personal allowance in 2018 ............................................................................................................... 12
Social Insurance - contributions ......................................................................................................... 12
Sickness benefit and income compensation for work inability ........................................................... 12
Exemption from pension insurance contributions for working pensioners ......................................... 12
Health insurance - contributions ........................................................................................................ 12
OTHER CRUCIAL CHANGES 13
EU General Data Protection Regulation (GDPR) .............................................................................. 13
Amendment to the Commercial Code ................................................................................................ 14
4 | Overview of the most important legislative changes in Slovakia as of 2018
TAX
VAT
Guaranteeing the tax
As of January 1st 2018 if a supplier is published on the so-called black list, it is not a qualified reason
for the application of the rules according to which the taxpayer that has been supplied goods or
services shall be held liable for the tax arising from the previous stage.
Domestic reverse charge
The threshold of EUR 5 000 for the application of domestic reverse charge when supplying certain
commodities was abolished.
Supply of real estate
If a supplier decides to tax a property that should be exempt from VAT, the buyer is liable to pay VAT
if he/she has the status of a taxpayer. In order to ensure that a taxable person who is an acquirer of
the property knows that he/she is obliged to pay the VAT on the basis of the reverse charge
5 | Overview of the most important legislative changes in Slovakia as of 2018
mechanism, the supplier is obliged to inform the acquirer in written form that he has decided to tax the
supply of the property; the obligation should be met within the time limit for issuance of the invoice.
Special margin scheme applicable to travel agencies
Following the case law of the European Court of Justice, the application of the specific rules was
extended also to cases where the recipient of tourism services is an entrepreneur who buys a
package of tourism services for the purposes of his business, whether for resale or business trips.
The travel agency´s own services shall not be included into tax base for the margin calculation, but
shall be taxed based on general rules.
Tax representative in case of acquisition of goods from other Member State for
purpose of its supply to another state
Foreign persons are allowed to appoint a tax representative in the case of goods acquisition from
other Member State inland for the purpose of its supply to other states. The tax representative can be
appointed by those foreign persons, who will conduct trade only by electronic means.
Trilateral transactions
Terms for trilateral transactions were amended: the first customer cannot be established in the
Member State of the second customer.
Summary statement and summary invoice
Obligations were introduced for taxable persons registered under Section 7 or Section 7a of the VAT
Act to file EC Sales Lists also when participating in the trilateral transactions.
The possibility of issuance of a summary invoice for the rental and supply of electricity, gas, water and
heat for a period of 12 calendar months was introduced also for a foreign taxable person.
Adjustment of Deductions in respect of Capital Goods
The 20-year period for the adjustment of tax deduction is from now applicable to each type of
construction due to the extended definition of "capital goods" for that purpose.
Tax liability in the last tax period
In the last tax period the taxpayer has to refund the VAT he deducted upon the payment for the goods
or service prior to delivery, if at the end of the last tax period, the goods or service were not delivered
to the taxpayer.
For more information about the changes, click HERE.
6 | Overview of the most important legislative changes in Slovakia as of 2018
INCOME TAX
Extension of a local definition of an individual tax resident
In addition to the formal criterion of permanent residence and the place where a person usually
resides, the residence will be also explored. If a natural person is provided with permanent
accommodation on the territory of the Slovak Republic that does not only serve for occasional
accommodation due to short-term visits, he/she will be considered a resident.
Tax allowances and credits for individuals
In the case of fulfilling certain conditions, a tax credit is available for individuals on paid interests on
mortgages in the amount of 50% of paid interests in given tax period, up to EUR 400 per year.
A new tax allowance was introduced for individuals for paid services of spa resorts. The deductible
item is given in EUR 50 per year of provably paid payments.
Tax relief to support innovations
A specific tax regime was established for the commercial use of intangible assets; it is the
exemption of income (up to 50%) from remittance for granting the right to use or using registered
patents, but also computer programs (software), subject to certain conditions.
Furthermore, a special tax regime for the commercial use of so-called embedded intangible assets
was established, too; it concerns the exempting part of the income (up to 50%) from the sale of
products in which the registered patent or the technical design protected by the utility model is used.
Special scheme for research and development was amended; the amount of deductible item was
increased.
Spa support
In order to support and renovate the buildings where spa is provided pursuant to special legislation,
their tax depreciation period was amended and can be from 20 to 40 years. The technical upgrade is
to be depreciated in the second tax depreciation category (6 years).
Provision of transport for employees
Starting from January 1st 2018, new rules applies regarding the tax deductibility of expenses for
providing transportation for employees to the place of work and back. In addition to this, new specific
rules applies regarding taxation, respectively tax exemption of benefits of kind by employees.
7 | Overview of the most important legislative changes in Slovakia as of 2018
Provable expenses on transport are considered to be tax deductible expenses in the full amount
at the employer, if all the following conditions are met simultaneously:
Public transport is not carried out at all, or not to the extent that is sufficient to employer´s
needs,
Employer uses motor vehicles listed under the code KP 29.10.3 for these purposes (motor
vehicles for 10 and more people).
The benefit in kind in the form of transport, ensured and paid by the employer, will be exempted
from personal income tax at the employee level only if all the following conditions will be met
simultaneously:
Employer provides the transport in the case the public transport is not carried out at all or
only to the extent that is not sufficient to the employer’s needs,
Employer uses for these purposes motor vehicle listed under the code KP 29.10.3
Employees participate on the payment of at least 60% of the amount of provable expenses
(30% in the case of manufacturing companies). If the participation is lower than the
mentioned rate then the difference between the amount corresponding to 60% and the real
amount of participation per employee is the taxable income of the employee.
Income of non-profit organizations from advertising
Starting from January 1st, 2018 income from advertising by selected entities established for other
than business purposes are subjected to income tax only in the taxable period when the payment is
received. At the same time, taxpayers having such expenses can claim them as tax deductible
expenses only after their payment.
If above mentioned entities use the income from advertising for selected beneficial purposes, the
income can be exempted from taxation up to the amount of EUR 20 000 for one taxable period.
Income from the sale of stocks and business shares
As of January 1st 2018 corporate income tax exemption on income from sale of stocks or
business shares applies to legal entities (residents or non-residents having a permanent
establishment in Slovakia). This does not apply to taxpayers which are engaged in trading with
securities pursuant to special legislation.
The following conditions for tax exemption must be met simultaneously:
Minimum 24 month holding period of at least 10% share on registered capital;
Taxpayer is not a letterbox company.
In case the taxpayer does not meet the conditions, the interests paid from credits and loans for the
acquisition of stocks or business shares will be tax deductible only in the taxable period in which the
sale of stocks and business shares occur.
8 | Overview of the most important legislative changes in Slovakia as of 2018
Business combinations
The possibility of performing contributions in kind, mergers, fusions or divisions for tax purposes in
historical values is now limited. With some exceptions, these types of business combinations are
allowed to be performed only in real values.
Income of non-residents from Slovak sources
The local definition of a permanent establishment was extended. Carrying on business through a
digital platform used to habitually conclude contracts for the provision of services of transportation
and accommodation in the territory of the SR leads to creation of a permanent establishment. The
definition of the so-called construction (assembling) permanent establishment was amended,
too, to avoid the artificial division of the activities of interconnected taxpayers in several shorter
activities. Amendments cover also the definition of so-called agent permanent establishment, to
avoid the misuse of commissioning structures.
As an income of a non-resident from Slovak sources is considered also an income from payments
from residents and Slovak permanent establishments of non-residents for commercial, technical or
other advisory services, data processing, marketing services and management or mediation services,
regardless where the services are provided, as far as expenses on such payments are tax
deductible expenses. Such incomes are subjected to withholding tax unless double tax treaty states
otherwise.
Anti-tax avoidance measures
Concept of beneficial owner: A definition of a beneficial owner of an income was
introduced. If the payer of income cannot prove that the recipient of the income is the
beneficial owner of that income, then when applying the withholding tax or tax guarantee the
35% tax rate shall be applied.
Exit Tax for legal persons: A 21% exit tax was introduced in the case of taxpayer’s property
transfer, taxpayer’s leaving or transfer of their business abroad. In the case of taxation, the
fiction of a property sale, or sale of the enterprise or its part applies. The aim of taxation is to
ensure that in the case of taxpayer’s property transfer or changing tax residence abroad, the
taxpayer will tax an economic value of all capital gains earned in Slovakia, even though this
gain is not realized in the moment of leaving.
Hybrid mismatches: In 2018, anti-tax avoidance rules were introduced with the aim to
prevent the situation between related parties of multiple tax deduction of expenses or of
deduction without inclusion.
Controlled foreign company rules (CFC rules): With effect from January 1 st 2019, CFC
rules are to be introduced, which are consist of assigning the income of a low-taxed controlled
subsidiary company to its parent company. Part of the parent company’s tax base will be the
income of controlled foreign company to the extent to which the assets and risks are
attributable to that income that are connected to main functions of the parent company (to the
extent in which no adjustment was made in accordance with the transfer pricing rules).
For more information about the changes, click HERE and HERE.
9 | Overview of the most important legislative changes in Slovakia as of 2018
TAX ADMINISTRATION
Extension of obligatory electronic communication
Starting from January 1st 2018 all companies (even if they are not VAT payers) have to deliver
their documents to tax administrator only electronically via an established electronic mailbox,
through the portal of financial administration. This applies to any submission, including tax returns for
income tax for 2017. Individuals with income from business and other self-employment (unless
they are VAT payers) will be obliged as of July 1st 2018 to deliver submissions through the
electronic mailbox.
Index of tax reliability of taxpayers
Taxpayer’s rating according to fulfilment of their obligation towards financial administrator and
enabling of specific tax regime for reliable traders were introduced.
Increasing of tax transparency
Tax transparency was increased: there are new or more detailed lists about taxpayers published by
the Slovak Financial Directorate, especially regarding tax registration, tax liabilities, especially in the
field of income tax, VAT, special levy for the financial institutions and special levy for regulated
industries.
Reform of tax secrecy rules
Among others, the reform of rules introduced that information on performing tax inspection or tax
execution is not considered to be a tax secrecy.
Summary protocol
The Slovak Financial Directorate can draw up a summary protocol for the tax administration purpose
on interconnected transactions of taxable persons at whom breach or circumvention of tax rules has
been detected, especially in cases where the tax subjects are involved in the fraudulent chain.
Appeals deadline extension
Filing deadlines for appeals were extended from 15 days to 30 days.
Reduction of fees for binding rulings
Fees for binding rulings were reduced to half, which means from EUR 4000 – 6000 to EUR 2000 –
3000, depending on the value of the business case.
For more information about the changes, click HERE.
10 | Overview of the most important legislative changes in Slovakia as of 2018
ACCOUNTING
Period of archiving of accounting documents
The period of archiving of accounting documents was harmonized with the period of archiving of the
financial statements, i.e. for 10 years.
Notification of financial statements approval
The deadline for submitting the notification was prolonged from five to fifteen days.
Stricter penalties for infringement of accounting rules
A measure was established to initiate the cancellation of a trade license if the entity has not kept
accounting books, has not prepared the financial statements, or if the entity carried out accounting
records outside accounting books, carried out the accounting record of an accounting event that did
not arise, conceal and did not record the fact that is the subject of the accounting.
For more information about the changes, click HERE.
11 | Overview of the most important legislative changes in Slovakia as of 2018
PAYROLL
Increase of minimum wage
Starting from January 1st 2018 the monthly minimum wage increased from the actual amount of EUR
435 to EUR 480. The minimum hourly wage increased from current EUR 2.500 to EUR 2.759.
Minimum wage rates (in EUR) by degree of difficulty:
Degree Monthly wage 40 hour/week 38,75 hour/week 37,5 hour/week
1 480 2.759 2.848 2.9429
2 576 3.3108 3.4176 3.5315
3 672 3.8626 3.9872 4.1201
4 768 4.4144 4.5568 4.7087
5 864 4.9662 5.1264 5.2973
6 960 5.518 5.696 5.8859
For more information about the changes, click HERE.
12 | Overview of the most important legislative changes in Slovakia as of 2018
Wage allowance for weekend and night work
The increase of minimum wage also means an increase in the wage allowance for night work,
weekend work and inactive standby duty, which are based on the minimum wage.
From May 1st 2018 the employee should be paid a wage allowance of at least 100% of the minimum
hourly wage for each hour on Saturdays and Sundays. From May 1st 2018 the wage benefit for night
work should also be increased by 50% of the minimum hourly wage.
Tax credit for children in 2018
From January 2018, the amount of tax credit for children is EUR 21.56 for a child per month, which
means EUR 258.72 for a child per year.
Personal allowance in 2018
The (monthly) personal allowance is EUR 319.17 when calculating the tax advance.
Social Insurance - contributions
The maximum assessment base for the calculation of the contributions was increased to EUR 6,384
except for accident insurance.
Sickness benefit and income compensation for work inability
The maximum daily assessment base for the calculation of the sickness benefit is currently EUR
59.9672, and of income compensation for work inability it is EUR 59.9671.
Exemption from pension insurance contributions for working
pensioners
From July 1st, 2018 pensioners working on agreement are able to determine the agreement to which
they apply the exemption from the payment of pension insurance contributions (old age, permanent
disability insurance and payment of the contribution to the reserve solidarity fund). Pension insurance
from the agreement is not paid, unless the monthly assessment base exceeds EUR 200.
Health insurance - contributions
The maximum assessment base is cancelled since 2017. The deductible item of payment is max.
EUR 380 per month. Over EUR 380 per month it is reduced by double the gap between the income
and EUR 380. In case of income from EUR 570 the deductible item is zero. From January 2018, it
applies only to employees, in the case of employers it was cancelled.
13 | Overview of the most important legislative changes in Slovakia as of 2018
OTHER CRUCIAL CHANGES
EU General Data Protection Regulation (GDPR)
In 2016, the Regulation (EU) 2016/679 of the European Parliament and of the Council was adopted,
on the protection of natural persons with regard to the processing of personal data and on the free
movement of such data, and repealing Directive 95/46/EC (“GDPR” as the abbreviation from General
Data Protection Regulation), by which are introduced new safety requirements and obligations with
which the companies must comply no later than May 25th 2018.
The most important changes established by GDPR apply mainly to:
The expanded scope, since GDPR applies to all entrepreneurs established in the EU and
companies that handle Personal Data of EU citizens,
The consent of a natural person to process Personal Data,
The new rights established by this regulation, which has arisen to natural persons the data of
which are processed,
Appointment of Data Protection Officer,
The fines, which can be up to EUR 20,000,000 or to 4% of total annual worldwide turnover
should the requirements and obligations are not complied with.
To prepare for GDPR, the company will need at the earliest to have a clear understanding of the
operations executed by the company as: what Personal Data it processes, where the data across the
group are processed, where the data is transferred from and to or how the data is secured.
For more information about the changes, click HERE.
14 | Overview of the most important legislative changes in Slovakia as of 2018
Amendment to the Commercial Code
Starting from January 1st 2018 a new amendment to the Commercial Code entered into force, with the
aim to improve the business environment. The key changes are as follows:
Stop to “straw men”
The Amendment tries to end the use of so-called “straw men” (persons who only give their name and
identity to assume rights and obligations of the statutory body of the company but they do not have a
real interest to execute these rights and obligations). For the appointment of a statutory body or its
member it is required to have the consent of that person with notarized signature.
New criminal offence: Unlawful liquidation
The unlawful liquidation is considered as a criminal offense, with the intention to punish persons
involved in actions concerning the transfer of company’s ownership to “straw men” in order to thwart
the proper liquidation. The penalty rate can be up to 15 years.
Increased responsibility of the statutory bodies
The Amendment extended the responsibility of statutory body, members of statutory body and
liquidators of companies, mainly in case of violating obligations. Breach of the obligation may mean a
disqualification of the statutory body and the disqualified statutory officer will not be able to become a
statutory officer in any company for 3 years.
Furthermore, the obligation to provide cooperation applies also to persons whose function in the
company terminated, for the period in which they acted as a statutory body or a member of the
statutory body of the company.
Increase of shareholders’ responsibility
The Amendment also introduced the shareholders’ responsibility, mainly in cases when the company
has rendered security in favour of the shareholder or concluded an agreement in his favour and by
the implementation of the security or of the agreement deteriorated the enforceability of receivable of
the creditor of the company, or the shareholder enforced the decision resulting in deteriorating the
enforceability of the company´s creditors´ receivables.
Merger and split of the companies
The legislation introduced several new obligations and constraints regarding merger and split of
companies. These corporate changes are prohibited in case the equity of successor’s company is
negative or participating companies are in liquidation or in bankruptcy or the court proceeding
on dissolution of the companies has been initiated.
15 | Overview of the most important legislative changes in Slovakia as of 2018
Also, further obligations were introduced, such as obligation to prepare an audit report certifying that
the value of the successor’s equity will not be negative, obligation of a company to submit a draft of
the contract of the merger / project of the split to the tax administrator not later than 60 days before its
approval by the company’s bodies, and obligation to file a petition for the registration of the
merger/split in the Commercial Registry not later than 30 days.
Other changes
The amendment regulated the capital funds and introduced changes regarding violation of business
secrets.
For more information about the changes, click HERE.
Disclaimer
Please note that our publications have been prepared for general guidance on the matter and do not represent a
customized professional advice. Furthermore, because the legislation is changing continuously, some of the
information may have been modified after the publication has been released. Accace does not take any responsibility
and is not liable for any potential risks or damages caused by taking actions based on the information provided
herein.
16 | Overview of the most important legislative changes in Slovakia as of 2018
About Accace
With more than 550 professionals, over 2000 international companies as customers and
branches in 13 countries, Accace counts as one of the leading outsourcing and advisory
services providers in Central and Eastern Europe.
Accace offices are located in the Czech Republic, Hungary, Poland, Romania, Slovakia,
Ukraine, Bosnia and Herzegovina, Croatia, Germany, Macedonia, Montenegro, Serbia
and Slovenia. Locations in other European countries and globally are covered via
Accace’s trusted network of partners.
Contact us!
E-mail: [email protected] | Tel.: + 421 2 3255 3000
Online contact form | Subscribe to our Newsletter!
More about us:
www.accace.com | www.accace.sk
