Tax rates in Slovakia

Company Tax

21%

Tax Rate For Foreign Companies

Resident companies are taxed on their worldwide income. Non-resident companies are only taxed on their income earned in Slovakia, at the same rate as resident companies.
An entity is considered tax resident in the Slovak Republic if it has its registered seat or effective place of management in the country.

Capital Gains Taxation

Capital gains are included in the CIT base and are taxed at 21% (or 15% for micro-taxpayers). The tax treatment of capital losses depends on the type of asset on which they arose, and in some cases, capital losses cannot be deducted.
Income from the sale of shares in joint-stock companies, ownership interests in limited liability companies, or limited partnerships may be exempt from corporate income tax purposes if the sale of the participation arises no earlier than 24 months after the acquisition date of at least a 10% direct interest in the registered capital.

Main Allowable Deductions and Tax Credits

Expenses are generally tax-deductible if incurred to generate, secure, and maintain the entity’s taxable income. However, certain costs are explicitly not tax-deductible, including entertainment costs, various provisions (e.g. provisions to tangible and intangible assets, certain bad debt provisions), and various expenses in excess of statutory limits (e.g. employee travel expenses and meal allowances).

Road tax, real estate tax, and most other such taxes are tax-deductible. Social security contributions paid by an employer with respect to employees are also tax-deductible. VAT charged to profit and loss is tax-deductible only if certain conditions are met. Contributions to supplementary pension savings made by the Slovak employer on behalf of the employee are tax-deductible (capped at 6% of the employee's gross salary). Start-up expenses are tax-deductible in the period when incurred.
In general, interest expenses incurred in order to generate taxable income can be treated as tax-deductible, subject to thin capitalisation rules.
Charitable contributions are treated as gifts, hence are not tax-deductible. Subject to conditions, expenses incurred by the employer on transporting employees to and from work can be deducted.
Certain expenses for practical education provided to students can be deducted (capped at EUR 3,200/student/year).

Tax losses can be carried forward in equal amounts over a period of four years. The carryback of losses is not permitted. From 1 January 2020, a company or branch may carry forward and utilise a tax loss equally over a period of five years following the year in which the tax loss arose, capped at half of the tax base in the respective tax period. From 1 January 2021, micro taxpayer (total income or revenues up to EUR 100,000) may carry forward and utilise a tax loss equally over a period of five years following the year in which the tax loss arose up to the amount of the tax base in the respective tax period.

Other Corporate Taxes

Other taxes include:

• immovable property tax, which is divided into land tax, building tax, and tax on apartments, calculated based on the area of the real estate, its location, and its type, as well as the tax rate of each self-governing region (between EUR 0.66 and 8.3 per square metre)
• social security contribution: employer’s health insurance and social security contributions total 35.2% of employee remuneration (capped at EUR 6,678 per month). Employers also contribute 0.8% of salary for work injury insurance. The minimum monthly social security contribution for self-employed is set at EUR 180.99 in 2021
• a special tax on banks calculated from the bank’s liabilities recognised on the balance sheet net of deductions (the tax was abolished with effect from 1 January 2021)
• a special tax from activities of entities in regulated industries (e.g. energy, insurance and reinsurance, public healthcare insurance, electronic communications, pharmaceuticals, postal services, railway transport, public water distribution and sewerage, air transport). The tax is calculated as a multiple of the tax base, coefficient, and tax rate. The liability to pay this special tax arises in case the accounting profit exceeds EUR 3 million. The current effective rate is set at 4.356% per year in 2021
• an insurance premium tax (IPT) of 8% applies to non-life insurance premiums in Slovakia and is payable by insurance companies
• a motor vehicle tax calculated according to parameters like engine capacity, vehicle size, etc.

Other Domestic Resources

Slovak Fiscal Administration

Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Tax Rate

Allowable Deductions and Tax Credits

No deduction is available for 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, unless they exceed the statutory limits and are aimed for private use.
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. Individuals between 18 and 35 whose average monthly income is up to 1.3 times the average monthly salary may deduct 50% of the interest paid on mortgage during five years (capped at EUR 400 monthly and from a maximum base of EUR 50,000 per property).

The personal allowance of 21 times the minimum subsistence amount - announced each year on 1 January - 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 specific formula. For 2021, the personal allowance is set at EUR 4,511.43 if the aggregate annual net active income is up to EUR 19,936.22.
Slovak tax residents with permanent residency in Slovakia can also claim a dependent spouse allowance of up EUR 4,124.74, provided the aggregated net active income of that taxpayer does not exceed certain limits.
Tax bonuses are available for dependent children, as follows:
- from 1 January 2021 till 30 June 2021: EUR 46,44 per child up to 6 years; EUR 23,22 per child above 6 years of age
- from 1 July 2021 till 31 December 2021: EUR 46,44 per child up to 6 years; EUR 39,47 per child from 6 years to 15 years; EUR 23,22 per child above the age of 15 years of age.

Private entrepreneurs may deduct ordinary business expenses incurred to maintain, secure, and generate business income, provided they keep accounts recording their income and costs. The costs should be recorded in the sequential order for rental income. Alternatively, an entrepreneur (apart from a person having just rental income) who is not a Slovak VAT payer can opt to deduct lump-sum expenses. The lump-sum expenses can be up to 60% of income (capped at EUR 20,000 per annum) in order to determine the taxable income (actual business expenses or rental costs are not tax-deductible if the taxpayer opts for the lump-sum deduction).

Special Expatriate Tax Regime

A tax resident of the Slovak Republic is subject to tax on worldwide income, while a non-resident is liable to tax on Slovak-source income only.
An individual living in Slovakia for at least 183 days in a calendar year (whether continuously or not) is considered resident, same as those who have a permanent residence in the country.