The Constitutional Court will review the law on income tax

THE CONSTITUTIONAL Court will deal with the amendment to the law on income tax, after a group of MPs submitted a motion. The deputies dislike the duration of depreciations of non-productive real estates which increased from 20 to 40 years.

THE CONSTITUTIONAL Court will deal with the amendment to the law on income tax, after a group of MPs submitted a motion. The deputies dislike the duration of depreciations of non-productive real estates which increased from 20 to 40 years.

They complain about retroactivity which is prohibited by Slovak law. The lawyer however, says that the provision which was passed will not affect the provisions made in the past.

“In practice, this will cause that entrepreneurs will need to claim in their tax expenses one half of the amount than now,” independent MP Jozef Kollár said, as quoted by the SITA newswire. “They will have to pay higher taxes.”

He says the provision is retroactive.

From the legal point of view, the provision has only inauthentic retroactivity which is allowed in the legislative process, unlike the so-called authentic retroactivity which is prohibited, Andrej Leontiev from the TaylorWessing e/n/w/c law firm told the Podnikam.sk website.

“Therefore the amendment will only impact future depreciations, and not the depreciations made in the past,” Leontiev said, as quoted by SITA, adding that they predict the motion will not be successful.

The amendment to the law on income tax passed by the parliament in the end of last year changes several rules for depreciations. It increased the number of depreciation groups from four to six, shortened depreciation of production technologies from 12 to eight years and prolonged depreciation of non-productive real estate, i.e. office buildings, hotels and blocks of apartments from 20 to 40 years.

The revision also caps the price of motor vehicles that business entities can depreciate, introduces a limit on depreciation of assets which a business person can also use privately and allows the additional reduction of the tax base by a portion of R&D expenditures.

Source: SITA

Compiled by Radka Minarechová from press reports

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