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As part of the measures within the consolidation package for the recovery of public finances, a proposal to amend the law on the special levy in regulated areas in Slovakia has been introduced. The amendment has been approved by the parliament, and its proposed effective date is January 1, 2025. Therefore, we would like to introduce it to you.
The scope of regulated persons is proposed to be adjusted in the case of persons and organizational units of foreign entities authorized to conduct activities in the pharmaceutical field based on a permit issued by the State Institute for Drug Control. Simultaneously, a new regulated person will be a person or an organizational unit of a foreign entity authorized to carry out activities in the area of manufacturing petroleum products and its chemical processing based on a trade license.
A positive change is the adjustment of the levy base downward, as it is set to be reduced by the yield of a government bonds before being multiplied by a coefficient.
Among the undoubtedly negative changes is the extension of the increased levy rate to additional sectors, as follows:
Additionally, in the original draft of the amendment, an increased levy rate of 0.025 was proposed for entities conducting business in the energy sector. However, this proposal was removed in a subsequent amendment, so for now, entities conducting business in the energy sector might retain an unchanged levy rate of 0.00363.
According to the transitional provisions, new regulated persons (entrepreneurs in the pharmaceutical sector based on a permit issued by the State Institute for Drug Control and entrepreneurs in the area of manufacturing petroleum products and its chemical processing) that hold relevant permits as of January 1, 2025, in the Slovak Republic or another EU or EEA member state and expect to conduct these activities throughout the levy period will be considered regulated entities. These regulated entities will be required to pay the levy, starting with the levy period of January 2025, if their accounting profit before taxes for the immediately preceding accounting period before January 1, 2025, reached at least the base amount of EUR 3,000,000. The immediately preceding accounting period is considered to be the one before January 1, 2025, for which they were required to prepare a financial statement and submit it along with the tax return for income tax purposes by December 31, 2024. This means that fortax period for income tax purposes set as a calendar year, these new regulated entities will monitor the profit for 2023, as this tax return would have been submitted by December 31, 2024. Additionally, these new regulated entities must deliver a written notice to the levy administrator by the end of January 2025.
If these new regulated persons did not have accounting profit/loss before taxes before January 1, 2025, and expect to carry out these activities for the entire levy period, they are still considered regulated persons and must pay the special levy for the first time for the levy period of January 2025. However, this only applies if the estimated accounting profit before taxes for the accounting period that began just before January 1, 2025, reaches at least the levy base of EUR 3,000,000. This regulated entity is also required to deliver a notice to the levy administrator by the end of January 2025.
If you believe that your company may be subject to the special levy in regulated areas in Slovakia from 2025 and would like more information, our tax experts are happy to provide you with advice in this area.
The amendment to Act No. 235/2012 Coll. on special levy on enterprising in regulated areas as amended (hereinafter referred to as the “Act”) had been anticipated for quite some time, and it was finally approved by legislators as part of the Consolidation Act at the end of 2023. Before its adoption, the focus was primarily on the impact on the banking sector, which significantly contributes to financing the state budget with its profits. However, the changes are far-reaching.
The most significant change in this Act is the expansion of the scope of regulated persons. From January 1, 2024, this Act applies not only to entities holding an authorization to perform their activities in areas such as energy, electronic communications, pharmacy, postal services, etc., but also to all persons or organizational units of foreign persons conducting activities based on authorizations issued by or granted by the National Bank of Slovakia. At the same time, a regulated person assumes that it will engage in regulated activities throughout the contribution period.
The Act lists some types of authorizations issued by the NBS, such as for banks, collective investment entities, and insurance companies. It is important to emphasize that these are examples, and therefore, from January 1, 2024, any person holding any authorization issued by the NBS may be a regulated person. For this reason, it is essential to note that it encompasses a wide range of activities, including banking, insurance, securities trading, collective investment, pension savings provision, financial intermediation, consumer credit provision, payment services, currency trading, etc.
The levy period is the calendar month in which the regulated person is authorized to perform regulated activities. If you became a regulated person from January 1, 2024, and concurrently have an obligation to pay this levy, you must submit a notification to the levy administrator by January 31, 2024. In this notification, you must provide the financial results for the accounting period of the year 2022 and determine the coefficient as the ratio of regulated revenues (income) to total revenues (income) for the year 2022. The levy must also be paid within the same deadline. The paid levies will subsequently be offset against the financial results achieved in 2024.
The special contribution applies to regulated entities that have achieved a pre-tax profit of €3,000,000 in the monitored accounting period.
For persons considered regulated from January 1, 2024, transitional provisions apply, specifying that a regulated person under §3 para. 1 letter a) point 2 of the Act has the obligation to pay the special levy from January 2024 if its pre-tax profit for the immediately preceding accounting period before January 1, 2024, reached at least €3,000,000. The immediately preceding accounting period is considered the period for which the obligation to prepare a regular financial statement and submit it with a tax return by December 31, 2023, arose. If the accounting period coincides with the calendar year, it will be the accounting period for the year 2022.
However, the regulated person does not pay the levy if the amount of the levy for the respective levy period does not exceed €1,000.
In general, the levy base is the pre-tax profit shown for that accounting period in which the regulated person is authorized to carry out activities in the regulated area. This base is multiplied by the coefficient determined as the ratio of revenues (income) from regulated activities to total revenues (income).
Regulated persons engaged in banking use a rate of 0.025 for the calculation of the contribution for 2024. For all other regulated entities, the contribution rate is 0.00363. The regulated contribution is calculated by multiplying the contribution base by the respective contribution rate.
If you are unsure whether you should be considered a regulated entity from January 1, 2024, due to a authorization issued by the NBS, enter your business name or ID number on this page to check if you have such a authorization.
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