Illustrative image. (source: SME - Marko Erd)
Robert Fico's (Smer) fourth government has approved a new financial transaction tax. Criticised by experts as very harmful, a total of 700,000 entrepreneurs and self-employed people are to be affected.
Finance Minister Ladislav Kamenický (Smer) estimated that the tax should bring more than half a billion euros into the state coffers next year. In the following years, he even estimates more than €700 million.
What will accompany the change and how will it affect you? The daily Sme has the answers to the most frequently asked questions.
1. What is the amount?
The government is introducing three new rates. The first is 0.4 percent for a transaction. A bank will deduct the tax from an entrepreneur's account when transferring money to another account, for example, if they pay for something they need for business. Say, an entrepreneur pays an installment of €800 for a lease, the bank will deduct further €3.20 as a transaction tax in addition to the €800.
At the same time, the ministry set a ceiling of €40 as the highest amount an entrepreneur will pay for one transfer, which is reached when transferring more than €10,000. Kamenický was inspired by a similar tax in Hungary, the rate of which is higher, 0.45 percent.
The second rate set at 0.8 percent with no upper limit will be paid when withdrawing from an ATM. If an entrepreneur withdraws €500 from an ATM, the bank will deduct a tax of €4. It will be charged for each withdrawal. According to tax adviser Alica Orda-Oravcová, entrepreneurs should think in advance whether they will need cash and whether it is better for them to pay by card. The minimum tax for one transaction is set at one cent.
The last of the newly introduced rates is €2 per year for the use of a card by an entrepreneur.
2. Who will be affected?
The transaction tax will apply to all entrepreneurs without exception, i.e. to businesses, sole proprietorships and self-employed persons. Entrepreneurs will see it only on their account statement. The changes will also apply the so-called forced self-employed people (or the so-called fictional self-employed), who run a business, but their work is no different from ordinary employees. It means that they go to work to the same place every morning, work for only one company and perform the same activity as an employee.
