Tax laws Slovakia
Slovakia's tax system is designed to generate government revenue while promoting economic growth and social welfare. Key components of the taxation structure include:
1. Individual Income Tax:
Tax Residency and Scope: Individuals residing in Slovakia are subject to taxation on their worldwide income. Non-residents are taxed only on income sourced within Slovakia, such as employment earnings, business profits, and income from Slovakian property.
Tax Rates: As of 2023, Slovakia applies a progressive tax system:
- 19% on income up to EUR 41,445.49 (176.8 times the subsistence level).
- 25% on income exceeding this threshold.
- Capital gains are taxed at a flat rate of 19%.
Personal Allowances: A non-taxable personal allowance of EUR 4,922.82 is available for those with annual taxable income below EUR 21,754.18. This allowance decreases progressively for incomes above this threshold and is fully eliminated at EUR 41,445.46.
Spouse Allowance: Tax residents with a dependent spouse can claim an additional allowance, provided the spouse's income does not exceed EUR 4,500.86 and other criteria are met.
2. Corporate Income Tax:
Tax Residency and Scope: Companies registered in Slovakia are taxed on their global income, while non-resident companies are taxed only on Slovak-sourced income, including profits from Slovakian permanent establishments and certain passive incomes.
Tax Rates: The standard corporate income tax rate is 21%. A reduced rate of 15% applies to companies with annual revenues not exceeding EUR 49,790.
Withholding Taxes: Dividends paid to individuals may be subject to a 7% withholding tax. Interest and royalty payments are generally subject to a 19% withholding tax. A 35% rate applies to payments to entities from non-cooperative jurisdictions or when the beneficial owner is unidentified. citeturn0search10
3. Value-Added Tax (VAT):
Standard Rate: The standard VAT rate is 23%.
Reduced Rates: Reduced rates apply to specific goods and services, such as books and certain food items. However, as of January 2025, VAT on books is set to increase from 10% to 23%, aiming to raise €50 million in revenue. citeturn0news16
4. Excise Duties:
- Sweetened Beverages Tax: A tax of €0.15 per liter is imposed on packaged drinks with added sugar or sweeteners, effective from January 2025. This measure aims to generate approximately €80 million in 2025 and €110 million annually thereafter. citeturn0news17
5. Other Taxes:
Property Tax: An annual tax is levied on real estate properties, with rates varying based on property type and location.
Inheritance and Gift Tax: Taxes are imposed on the transfer of assets through inheritance or gifts, with rates depending on the relationship between the parties and the value of the assets.
Recent Developments:
2025 Budget and Fiscal Measures: The Slovak government has approved a budget aiming to reduce the budget deficit from 5.8% of GDP to 4.7% in 2025, with the goal of reaching 3% by 2027. Measures include VAT increases and new taxes on sweetened beverages and books.
Credit Rating Downgrade: Moody's downgraded Slovakia's credit rating from A2 to A3, citing institutional challenges and political tensions, which the Slovak Finance Ministry has disputed.
For the most accurate and current information, it's advisable to consult the Slovak Financial Directorate or a tax professional, as tax laws and rates are subject to change.
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