The taxes paid by companies in Slovakia will be lower thanks to an amendment to the law on income tax which came into force on January 1, 2017.
Under the new rules, the corporate income tax dropped from 22 percent to 21 percent. Moreover, health insurance contributions from dividends were scrapped and replaced with a 7-percent tax, the TASR newswire reported.
As a result, companies will pay less.
“The aim of the change is to improve the business environment and increase the motivation to pay taxes,” the Finance Ministry explained, as quoted by TASR.
Regarding dividends, the ministry originally proposed a rate of 15 percent, while employers wanted it to amount to 5 percent. Eventually, the ministry set it to 7 percent. It also abolished the retroactive taxation of dividends, which had been heavily criticised by employers.
The amendment also increases the cap for lump-sum allowances for the self-employed. In line with the new rules, they will be able to claim flat-rate expenditures comprising up to 60 percent of total costs, with the maximum amount set to €20,000 annually.
The changes also concern the tax licences which will be scrapped as of January 1, 2018. Moreover, the amendment defines the controlled transaction regarding rental of property between siblings, or parents and their children, TASR reported.
The amendment should also secure legal certainty in the field of transfer appreciation. It defined the term “controlled transaction”, and also specified the primary adjustment of the tax base.
While the sanctions for taxpayers deliberately avoiding tax duties increased, the sanctions for those who pay fines on time dropped.
The measures are aimed at fighting tax evasion, TASR reported.
8. Mar 2017 at 5:30 | Compiled by Spectator staff