Cabinet approves revision to income tax act

At a special sitting on March 25, cabinet approved a revision to the Income Tax Act for private individuals and corporate entities, and at the same time proposed a shortened legislative treatment of this bill in Parliament. The measure aims to compensate for the negative impact of the cabinet's economic austerity package on low-income groups, as well as to introduces some tax breaks for foreign investors. The revised bill should take effect April 1 this year.

The amendment offers a 5-year tax break for investors who establish a company in Slovakia after April 1, 1999, who invest 5 million euros in operations and who export more than 60% of their production. Foreign firms which invest in districts with high unemployment need sink only 2.5 million euros into their Slovak ventures to qualify for the same breaks.

The amendment raises the value allowed for depreciation of machines and other equipment from the current 8% to 30% annually, while the rate on buildings should rise from 2 to 5%.

The revision also decreases the tax burden on those whose incomes are under 7,000 Slovak crowns ($160) monthly, while raising the tax rate on annual incomes exceeding 1.317 million crowns ($32,000) to 45%.

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