Did you know about the term „non-cooperative state”?

This term, defined in Article 2 of the Slovak Income Tax Act, is applicable for individuals as well as entities. For this purpose, the Ministry of Finance of the Slovak Republic publishes list of states which are considered as cooperative together with the reasoning. In a simplified way, the list contains states which concluded international treaties with Slovakia (double tax treaty or tax information exchange agreements). On the other hand, it excludes:

• states with no corporate income tax or 0% corporate income tax rate; or
• states published in the “black list” issued by the EU.

If the state is not included in this list, it is considered as non-cooperative. If the recipient of income is taxpayer from the non-cooperative state, e.g. higher withholding tax rate is applied. It is similar if the beneficial owner of income is not proved. We have focused on this topic in our previous article.