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New fee for small companies announced

THE NEW fee small companies will have to pay as of the 2014 taxation period, the so-called tax license, will amount to at least to €480, Finance Minister Peter Kažimír announced on November 11.

THE NEW fee small companies will have to pay as of the 2014 taxation period, the so-called tax license, will amount to at least to €480, Finance Minister Peter Kažimír announced on November 11.

This will be the amount for companies which earn less than €500,000 and do not pay VAT.

The amount will be dependent on the revenues of the company. Companies who pay VAT will have the amount of their tax license doubled.

Minister Kažimír introduced these sums as his compromise with businesses representatives, the Sme daily reported.

In practice, the new tax will place a burden on companies in loss or those whose profit is lower than the amount of the tax.

Newly established companies and self-employed will be exempt from the tax licences altogether, the TASR newswire reported.

The government, which promised not to impose new taxes during its term, argues that this measure is needed to improve tax collection and help fight tax evasion, according to Sme.

The minister presented data showing that tax evasion is a problem in the Slovak economy. More than 60 percent of all legal entities registered in Slovakia have no tax liabilities at the moment and since 2006 the number of firms with zero tax liability has increased by 40,000, he said as reported by TASR. Most of these companies are in the catering or accommodation sector. Conversely, the smallest number of companies with zero tax liability are in the field of information and communication.

The Finance Ministry also pointed out that the new tax licenses are accompanied by a reduction of income tax for companies from the current 23 to 22 percent.

The opposition had criticised the tax licenses.

"The result of these policies is reflected in Slovakia's slump in international economic comparisons, and especially in higher unemployment than it was a year ago,” SDKÚ MP Ivan Štefanec said, as quoted by TASR. “Introduction of tax on losses makes this situation even worse and will worsen the already high unemployment rate. Fighting against tax evasion can't be accomplished by adding new taxes."


Source: Sme, TASR

Compiled by Michaela Terenzani from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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