As part of the consolidation package to improve public finances, the Government of the Slovak Republic introduced numerous changes, one of the most controversial being the introduction of a new tax on financial transactions effective from January 1, 2025. This new tax will affect the entire business environment, and even before the law’s effectiveness, it underwent an amendment.

What is a financial transaction?

A financial transaction refers to a payment service provided by a payment service provider, carried out based on the order or consent of the taxpayer, or a similar payment service provided by a payment service provider based outside the Slovak Republic, executed based on the order or consent of the taxpayer.

A payment service includes, in particular, executing payment operations, including transferring funds from or to a payment account held by a payment service provider via payment, through a payment card or other payment instrument, and collection, as well as performing payment operations using credit, such as overdraft, payment, through a payment card, collection, or by credit facility. A payment service also includes withdrawing or transferring funds based on an order from the payer or on their behalf, or from the recipient’s instructions to the payment service provider within the payment services.

What is a transaction account?

Taxpayers are required to carry out financial transactions on a so-called transaction account. A transaction account is considered any payment account of a taxpayer who is a legal entity or a branch of a foreign entity, or a taxpayer who is a self-employed individual, on which they conduct financial transactions related to their business activity.

A taxpayer who does not have a designated special payment account, which only handles financial transactions related to their business activities, must establish such an account by March 31, 2025.

Who is a taxpayer for the tax on financial transactions in Slovakia?

A taxpayer is a natural person—entrepreneur, legal entity, or a branch of a foreign entity, who is a user of payment services provided by a payment service provider, and who has its registered office or place of business in the Slovak Republic, holds a payment account with a payment service provider with its headquarters in the Slovak Republic, or conducts business activities in the Slovak Republic.

A user of payment services is a person who uses payment services as a payer or a recipient, where the payer and recipient may be the same person.

The law also exempts from the scope of taxpayers the Social Insurance Agency, Matica slovenská, the Slovak Academy of Sciences, budgetary and contributory organizations according to the Public Administration Budget Rules Act, municipalities and higher territorial units and their budgetary and contributory organizations. The amendment also excluded from the position of taxpayers associations, non-investment funds, foundations, non-profit organizations, religious organizations’ facilities, interest associations of legal entities, the Slovak Red Cross, whose activities serve public welfare purposes, as well as regional and local tourism organizations and tourist information centers. These entities must report this fact to their banks, including the bank accounts on which they perform financial transactions for public welfare purposes. The method and form of proof and reporting will be determined by the bank.

Who is the income payer?

The income payer is:

• A payment service provider with its registered office in Slovakia.
• A branch of a payment service provider located within the Slovak Republic,

that carries out financial transactions on the instruction or with the consent of the taxpayer on their transaction account (e.g., banks). Therefore, the financial transaction tax will generally be paid by payment service providers, not directly by entrepreneurs.

However, an income payer may also be an entity:

• Who makes payments from their accounts held outside Slovakia, related to their activities in Slovakia,
• Who is invoiced for costs by another entity that carried out payments on their behalf related to their activities conducted in Slovakia,
• Who performs transactions related to their business on an account other than a transaction account (e.g., a regular bank account).

In these cases, the taxpayer becomes the income payer for the tax and must fulfill the same obligations as the income payer. This means that entrepreneurs, for example, using foreign bank accounts for their activities in Slovakia, will have to calculate and settle their financial transaction tax liability in Slovakia, including reporting and administrative duties.

What is subject to the tax?

The subject to the tax is a financial transaction where funds are withdrawn from the transaction account, a payment card issued to the transaction account is used, or cash is withdrawn from the transaction account.

The law also regulates over 20 exceptions to the tax subject, most of which relate to payment operations incorrectly executed by the payment service provider, operations on the account of a securities trader, operations within the State Treasury, payment operations under the Deposit Protection Act, and others.

Among the most important exceptions are financial transactions of a taxpayer conducted between their own accounts within one payment service provider—so-called intra-bank transfers, payment operations in group financing provided that the accounts of the group members are held by the same payment service provider (so-called cash pooling), and, lastly, tax payments, social insurance contributions, and payments to the health insurance account at the State Treasury.

The amendment also added to the exceptions payments for fees that are income to the state budget, customs duties, payment operations on special accounts held by a bankruptcy trustee or court bailiff, deposits or returns of auction deposits, and many others.

What is the tax base?

The tax base is the amount of funds withdrawn from the taxpayer’s account, i.e., the amount of the debit payment. In the case of a taxpayer who is invoiced for costs, the tax base is the amount of funds required from the taxpayer by the entity that performed the transactions related to the taxpayer’s activities in Slovakia, e.g., employee salaries, energy costs, payments to suppliers. The amendment, however, divides this tax base for taxpayers who are invoiced for costs into amounts they can identify and amounts they cannot identify, which affects the tax rate.

In the case of payments in a currency other than the euro, the exchange rate used will be the reference exchange rate set and published by the European Central Bank or the National Bank of Slovakia, valid on the day the financial transaction was made.

What is the tax rate, and how is the tax calculated?

The tax rate is proposed depending on the tax base as follows:

• For each debit financial transaction: 0.4% of the transaction amount, with a maximum tax amount set at 40 EUR per transaction.
• For cash withdrawals from the transaction account (both ATMs and branches): 0.8% of the withdrawal amount without a maximum tax amount for the transaction.
• For the use of a payment card at least once per calendar year, the tax is 2 EUR, regardless of how many times the payment card was used during the year.
• For costs invoiced in connection with financial transactions relating to activities in Slovakia:
  • 0.4% of the invoiced cost amount, with no maximum tax amount if the taxpayer cannot identify the invoiced costs.
  • 0.4% of the invoiced cost amount with a maximum tax of 40 EUR per transaction, if the taxpayer can identify the individual invoiced costs.

The tax is calculated as the product of the tax rate and the tax base, except for the tax on the use of a payment card, which is a fixed amount. The minimum tax for one transaction is set at 1 euro cent. If the tax exceeds this minimum, it is rounded mathematically to the nearest euro cent.

What is the tax period?

The tax period is generally the calendar month. Only for the tax on the use of a payment card is the tax period the calendar year.

For invoiced costs related to the execution of financial transactions tied to the taxpayer’s activities in Slovakia, the tax period is the calendar month in which the costs were paid.

Payment is also considered to include the offset of receivables.

How is the tax paid?

The income payer (i.e., generally the bank) is obliged to calculate the tax amount, collect it from the taxpayer, and remit it to the tax administrator no later than the end of the calendar month following the tax period. At the same time, the income payer must electronically submit a notification according to the template of the Financial Directorate, which is considered a tax return. The tax is considered to be assessed upon the submission of the notification. The last day of the notification deadline is when the tax is due. The income payer is responsible for the correct calculation, collection, and remittance of the tax.

If the income payer does not collect or timely remit the tax, the tax will be collected from the taxpayer. The same procedure applies if the taxpayer fails to collect and remit the correct amount of tax.

A taxpayer who carries out financial transactions on an account other than a transaction account, or who is invoiced for costs related to the execution of a financial transaction, becomes an income payer for these operations and must submit the notification electronically and pay the tax within the prescribed period. The amendment introduced the possibility for a taxpayer who is invoiced for costs to reduce their calculated tax by the amount of tax collected by the taxpayer on a payment related to the invoiced costs.

What are the administrative obligations?

The income payer is required to maintain records for each tax period and keep them for at least the period prescribed by the Tax Code for the expiration of the right to assess the tax. The records include, among others:

a) Name, surname, and business address of the taxpayer, business name and address of the registered office or branch,

b) Business name and address of the income payer´s payment service provider,

c) Transaction account numbers of the taxpayer,

d) Amount of the financial transaction,

e) Tax base,

f) Tax rate,

g) Tax amount,

h) Date of first use of the payment card in the tax period.

What if the taxpayer has been charged the incorrect tax amount?

In case of doubts, the taxpayer has the right to request an explanation from the income payer within 12 calendar months from the date the tax was collected. The taxpayer must state the reasons for their doubts. The income payer must provide the explanation in writing within 30 days from the receipt of the request and correct any error within the same period. If the income payer fails to provide the explanation, the taxpayer may file a complaint with the tax authority.

What will be the first tax period?

Although the law comes into effect on January 1, 2025, the first tax period will be April 2025. Taxes for the periods 04-06/2025 can be paid by July 31, 2025. If the payer collects the tax for these periods earlier, they must remit it by the end of the calendar month following the month in which the tax was collected, and submit the notification to the tax authority.

If the taxpayer closes their transaction account between April 1, 2025, and May 31, 2025, they must calculate and remit the tax themselves for the tax periods during which the account was active and submit the notification to the tax authority by the end of the month following the month in which the transaction account was closed.

If you believe your company may be subject to the tax on financial transactions in Slovakia from 2025 and would like more information, our tax experts are happy to provide consultation on this matter.

Barbora Juhásová

Tax Manager | Accace Slovakia

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