|
Last updated, September 2007
- In 2007 the individual income tax rate in Slovakia is flat at 19%.
- Exemptions are granted to taxpayers with specific types of income.
- The standard 2007 corporate tax in Slovakia is fixed at 19%.
Income Tax for an Individual
- 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 income earned in Slovakia and overseas.
A foreign resident who is employed in Slovakia pays tax only on his income in Slovakia.
- To be considered a Slovak resident, 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 due from a salaried worker.
- A self-employed individual is obligated to make advance payments on income tax that 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. The advance payments will be made monthly or quarterly, depending on the amount of the advance payment.
- Certain payments are deducted from taxable income as detailed below.
Slovakia Corporate Tax
- Slovak companies are taxable on their income in Slovakia as well as on income from overseas. Foreign companies in Slovakia are taxable only on income that has its source in Slovakia.
CAPITAL GAINS
- 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, in most cases, be offset against regular taxable income.
REPORTING DATES AND PAYMENT
The tax year in Slovakia is the year ending on December 31.
Advance payments of tax are made as specified below:
- An Individual - An individual whose income is only from a wage is not obligated to file an annual return. The employer deducts tax from the employee and transfers it to the tax authority every month.
- A self-employed individual must make monthly or quarterly advance payments in the amount of the tax paid in previous periods.
- A self-employed individual must file a tax return by March 31 in the year after the end of the tax year.
- A Limited Company A Limited Company - It is compulsory to submit the financial statements by March 31.
- The company must make monthly or quarterly advance payments of tax during the course of the year, depending on the amount of the advance payments in the previous year.
- Small businesses make only one advance payment.
- A delay in submitting the annual return beyond the date prescribed is liable to a fine.
DEDUCTION OF TAX AT SOURCE
Taxation of Employee
An employer is obligated to deduct tax at source from an employee and to make additional contributions to social security.
Social Security
- An employee: the employer's contribution is 35.2% of the salary. The employee's contribution is 13.4%.
- A self-employed person makes payments to social security himself.
- The insurance covers pension, unemployment and care insurance.
Other deductions
Tax, in Slovakia, must be deducted at source from the following payments according to the following table:
- Dividend - 0%.
- Interest - the standard rate of tax deducted at source - 19%
- Royalties on patents -19%.
Comment:
Deduction at source for foreign residents is subject to the Double Tax Prevention Treaties and EU directives.
|
