Amendment to the Financial Transaction Tax Act introduces new rules

The most significant impact will be on sole traders, who will no longer be required to pay this tax. The amendment introduces a distinction between taxpayers with limited and unlimited tax liability, clarifies terms such as transaction account, permanent establishment, and use of a payment card, and also introduces a definition for cost reallocation.

Changes to the Financial Transaction Tax from January 1, 2026

1. Exemption for sole traders – The law removes the term “individual person – entrepreneur,” meaning that this tax will no longer apply to sole traders and other individuals conducting business under special regulations (e.g., lawyers, psychologists, architects, tax and financial advisors). For many small entrepreneurs, this is a positive step that will reduce their administrative and financial burden.

2. Definition of taxpayers – Taxpayers are now classified into two groups, as having limited or unlimited tax liability, and the range of special entities exempt from the transaction tax has been expanded (e.g., public institutions such as the Slovak Academy of Sciences, the Office for Audit Oversight).

3. Transaction account – The definition of a transaction account has been clarified; it refers to a payment account of a taxpayer who is a legal entity or an organizational unit of a foreign entity.

4. Permanent establishment – The amendment also considers various types of permanent establishments, as well as branches registered in the Slovak Commercial Register, which is key for determining the tax liability of foreign taxpayers in Slovakia. Activities carried out in Slovakia must exceed 15 days in the tax period (calendar mont) for the permanent establishment to be subject to the financial transaction tax.

5. Use of a payment card – The term “use of a payment card” has been clarified. It refers to actions that result in a reduction of the balance of funds in the taxpayer’s payment account.

6. Cost reallocation – A definition of “cost reallocation” has been introduced. A reallocated cost is the amount of a financial transaction carried out on behalf of the taxpayer by another person. If the taxpayer has limited tax liability, the transaction must relate to their activities in Slovakia. The taxpayer to whom these costs are reallocated will be the one liable for the tax.

According to experts, this amendment represents a significant step toward a fairer and more efficient tax system.