We would like to draw your attention to the upcoming obligation to file a tax return on motor vehicles, which should be submitted by 31 January 2018. In this regard, we would like to offer you our services including the preparation of the tax return on motor vehicles and comprehensive advisory on this matter.
Categories of vehicles
Obligation to file the tax return for the calendar year 2017 arises for each vehicle that is being used for business activities even if only for a part of the year. The subject of the tax is a motor vehicle which belongs to categories M, N, O or L.
For a vehicle category, please refer to the Registration Certificate – Part 1 or Part 2 in line J – Category.
The taxpayer is:
§ a natural or legal person that is recorded as holder in the registration book
§ an employer who pays a travel allowance to an employee for making use of the vehicle that is not being used on business activities
§ a natural or legal person that uses a vehicle for its business activities, the recorded holder of which is a person who has died, ceased or has been abolished or a person who does not use the vehicle for its business activities.
Based on the changes that were introduced in year 2015 in case of operating lease, use of a motor vehicle for business activities is not taxed by the vehicle owner, instead, it is taxed by the vehicle holder recorded in the vehicle’s registration book.
In case of an organizational unit recorded as a holder in the registration book, the taxpayer is a legal person – the founder of this organizational unit.
When calculating the tax liability, it is necessary to adjust the annual tax rate, which is determined and differs for passenger and commercial vehicles in connection with the tax base, firstly by the number of months elapsed since the month of the first registration of the vehicle in Slovakia. Consequently, this adjusted (reduced or increased) tax rate can be further reduced by 50% depending on the type of vehicle drive. Additional reduction applies to hybrid fuel and hybrid electric vehicles, vehicles with compressed or liquefied natural gas (CNG or LNG) and hydrogen vehicles.
Entitlement to a further 50% tax rate reduction applies also to taxpayers that are using a combined transport vehicle at least 60 times for the applicable tax period.
The environmental aspect of motor vehicle tax is reflected on electro-mobiles, for which the legislation decided on an annual tax rate of EUR 0.
Annual tax rates for the passenger and commercial vehicles are defined in Annex no. 1 of Act No. 361/2014 Coll., on Motor Vehicle Tax.
Occurrence of tax liability
The tax liability for motor vehicles occurs as of the first day of the month in which the vehicle was used for business activities. The tax liability terminates on the last day of the month in which:
§ the vehicle was excluded or temporarily excluded from the registration;
§ business activities were terminated or suspended
§ the taxpayer was wound up without liquidation;
§ the vehicle holder changed;
§ the use of company vehicle or vehicle having other person recorded as vehicle holder in the registration book was terminated.
The occurrence and termination of tax liability shall be stated by the taxpayer in the tax return, except for, the use of employee´s vehicle for an employer’s business activities, in which case this information needs not to be stated in its tax return.
Tax period is usually a calendar year. However, exemptions may occur in following cases – when the tax period is determined separately:
§ dissolution of a taxpayer without liquidation;
§ dissolution of a taxpayer with liquidation;
§ bankruptcy of a taxpayer´s property;
§ business activities of the taxpayer were terminated;
§ or death of the taxpayer.
Calculation of the tax and prepayments
Calculation of the tax liability is based on the number of months of use of the vehicle for business activities in the respective tax period.
Tax prepayments are calculated on the basis of estimated tax for the next tax period, specifically as the sum of the annual tax rate adjusted by the number of months from the date of the first registration of the vehicle and the type of vehicle drive for any vehicle that is subject to tax as of 1 January of the next tax period.
The limits for calculation of the quarterly and monthly prepayments have been determined as follows:
§ If estimated tax is lower than € 700.00, the taxpayer pays no tax prepayments;
§ If estimated tax is higher than € 700.00 and lower than € 8,300.00, the taxpayer pays quarterly tax prepayments;
§ If estimated tax is higher than € 8,300.00, the taxpayer pays monthly tax repayments.
Payment of tax prepayments is not affected by changes in subject-matter of the tax, occurrence and termination of tax exemption, and reduction and increase in the annual tax rate during the tax period, and the filing of an additional tax return.
Notification obligation occurs only in case that the taxpayer in the respective tax period, does not use the vehicle for business purposes, does not account for the vehicle, does not record the vehicle in tax registration or waives the costs associated with the use of the vehicle.
The tax liability for such vehicle shall expire as of 31 December of the previous tax period. In such case, there is an obligation to notify the tax administrator about this fact by 31 January after the end of the respective tax period.