Taxes
19 June 2019

Slovak Government approves several tax legislation amendments

The Government of the Slovak Republic has recently approved several amendments of tax related legislation. Despite the fact that in most cases the legislative process will be completed in the autumn, we bring you a brief overview of the approved changes.

Marianna Dávidová

Amendment to the Act on the Use of Electronic Cash Registers: Slovak government has approved an amendment to the Act on the Use of Electronic Cash Register, which postpones the sanctioning of entrepreneurs, which will not have on-line cash registers put into operation under the stipulated conditions.

The amendment approved by the Government was discussed in fast-tracked legislative procedure at the June meeting of the National Council of the Slovak Republic.

Amendment to the Income Tax Act: Relatively extensive amendment to the Income Tax Act introduces measures designed to simplify the calculation of the tax base for small and medium-sized enterprises, to clarify and harmonize provisions where this need arises from application practice and also introduces rules to prevent the use of so-called hybrid mismatches.

Provisions to simplify the calculation of the tax base for small and medium-sized enterprises include, for example, a change in the tax loss carry forward rules. It is proposed that tax losses will not have to be carried forward evenly and carried forward period will be prolonged from the current 4 to 5 years. Moreover, newly defined micro taxpayers, will not have the amount of tax loss available for carry forward during the respective tax period limited, compared to other taxpayers.

The amendment to the Income Tax Act also simplifies the conditions under which cash basis expenses can be included in the tax base. The simplification lies in the fact that the payment condition will no longer relate to expenditure, which is part of the acquisition costs or part of own costs e.g. in case of stock. It is also proposed to cancel additional restrictions on tax deductibility of cash basis expenses and only the payment condition should be tested.

It is also proposed to increase the threshold for the payment of income tax prepayments from the current € 2,500 to € 5,000.

The amendment to the Act was discussed at the June meeting of the National Council of the Slovak Republic at the first reading.

Amendment to the Act on International Assistance and Cooperation in Tax Administration, by which the Slovak Republic implements the DAC 6 EU Council Directive. The amendment in question introduces automatic exchange of information on cross-border measures considered to be aggressive tax planning practices. In order to ensure automatic exchange of information, a so-called liable persons (intermediary or taxpayer) will be obliged to notify the measures in question. The amendment to the Act was discussed at the June meeting of the National Council of the Slovak Republic at its first reading and its effectiveness is proposed for 1 July 2020.

We will keep you informed on further developments in the legislative process.

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