Amendment to the Act on Income Tax in Slovakia (Tax & Fiscal Alert)
We would like to inform you about the draft of Amendment to the Act on Income Tax that introduces so-called tax licences, new provision of tax loss deductions and change of the income tax rate starting from the year 2014 .
In accordance with §46b of the Act on Income Tax the Finance Ministry plans to introduce so-called tax licences that should represent some kind of minimum tax. Every tax payer should pay tax licence for every tax period in that his/her tax liability is less then the minimum tax amount or in the case of tax loss declaration. The introduction of tax licences is one of the major measures in the fight against tax evasions. The tax payer, whose calculated tax liability, will be lower than amount of the minimum tax in accordance with his classification into the relevant group under the provision of Act on Income tax, is supposed to pay the minimum tax as follows:
If the tax payer is not a VAT payer with the annual revenues exceeded 500 000 EUR, the minimum tax to be paid will be at the amount of 480 EUR,
If the tax payer is a VAT payer with the annual revenues not exceeded 500 000 EUR, the minimum tax to be paid will be at the amount of 960 EUR,
the tax payer with annual revenues higher then 500 000 EUR will pay the minimum tax at the amount of 2 880 EUR,
Tax licence will be payable within the period for filing tax returns.
The tax payers, whose average number of employees with disability is at least 20% of the total average registered number of employees, will have tax relief for the so-called tax licences in the amount of one half. Tax licence will not apply to tax payers by that the obligation to submit the tax return arises for the first time, for instance in the case of new established companies. Non-profit organizations as well as tax payers who operate sheltered workshops or sheltered workplace are not obligated to pay tax licences. Tax licences will not be paid by tax payers by start of the liquidation process or bankruptcy declaration.
We would like to draw your attention also to the draft of new provision of tax loss deductions. Starting from 2014 the tax losses should be amortized only in the period of 4 tax period and evenly. In accordance with the actual provision, it is possible to amortize the tax losses in the period of 7 tax period and the amortized amount is not limited.
Change of corporate income tax rate
In addition to the introduction of tax licences, the Slovak government also plans to cut the corporate income tax from 23 to 22 percent.