Last partial update, July 2017
- In 2017 the individual income tax rate in Slovakia is 19% for income up to EUR 35,022 and 25% for income exceeding this ceiling.
- Exemptions are granted to taxpayers with specific types of income.
- The standard 2017 corporate tax in Slovakia is fixed at 21%.
There is also a minimum tax regime for companies.
The minimum tax sum is EUR480 to EUR2,880 depending on VAT registration and annual turnover.
Income Tax for an Individual in 2017
- An individual in Slovakia is liable for tax on his income as an employee and on income as a self-employed person. In the case of an individual who answers the test of a "permanent resident" of Slovakia, tax will be calculated on his worldwide income.
A foreign resident who is employed in Slovakia pays tax only on his Slovak source income.
- To be considered a Slovak resident, permanent residence permit should be obtained or residence of at least 183 days during any calendar tax year must be established.
- An employer is obligated to deduct, immediately, each month, the amount of tax and national insurance (health insurance and social insurance) due from a salaried worker.
- A self-employed individual is obligated to make quarterly advance payments on income tax based on his previous year tax liability.
The advance payments on income tax will be offset on filing an annual report. In the case of a new business, the advance payments will be calculated according to the estimates of the owner of the business.
- Certain payments are deducted from taxable income as detailed below.
- Losses from various activities of individuals can be offset against each other, however none of them can be offset against employment income.
Slovakia Corporate Tax
- Slovak companies are taxable on their worldwide income.
Foreign companies in Slovakia are taxable only on income that has its source in Slovakia.
Capital Gains in Slovakia
Reporting Dates and Payment in Slovakia
- A capital gain in Slovakia is added to regular income and is taxable at the same rate as regular income for both an individual and a company.
- A capital loss from the sale of an asset may not be offset against regular taxable income.
The tax year in Slovakia is the year ending on December 31.
Corporate entities can however change the tax year to economic year that is different to the tax year, and should take 12 calendar months.
Advance payments of tax are made as specified below:
- An Individual - An individual with only employment income is not obligated to file an annual return. The employer deducts tax advance payments from the employee's wage and transfers it to the tax authority every month.
- A self-employed individual is obligated to make quarterly advance payments on income tax, provided that his last tax due was higher than EUR 1,659.70 and monthly advance payments on income tax, provided that his tax due from previous tax year was at least EUR 16,596.96.
- A self-employed individual must file a tax return by 31 March in the year after the end of the tax year. The deadline for filing the tax return can by extended by written announcement by 3 months, or by 6 months if the individual had foreign income.
- A Corporate Entity It is compulsory to submit the corporate income tax return with the financial statements by 31 March of the year following the tax year. In case that the corporate entity follows the economic year, the corporate income tax return should be filed by 3 months after the end of the economic year. The deadline for filing the tax return can by extended by written announcement by 3 months, or by 6 months if the individual had foreign income.
- The corporate entity is obliged to make monthly/quarterly advance payments on income tax.
- Small businesses make only one advance payment.
- Not submitting or delay in submitting the annual return after the date prescribed is liable to a fine.
Deduction of Tax at Source in Slovakia
Taxation of Employee
An employer is obligated to deduct tax at source from an employee and to make additional contributions to social security.
- An employee: the employer's contribution is approximately 35.2% of the salary. The employee's contribution is approximately 13.4%.
- A self-employed person pays contributions to social insurance and health insurance system by himself.
- The insurance covers pension, unemployment, sickness, and work injury.
Other deductions in Slovakia
Tax, in Slovakia, must be deducted at source from the following payments according to the following table:
- Dividend - 7%/19%/35%.
- Interest - the standard rate of tax deducted at source - 19%/35%.
- Royalties - 19%/35%.
Deduction at source for foreign residents is subject to the Double Tax Prevention Treaties and EU directives.