Spectator on facebook

Spectator on facebook

Tax evasion still causes problems

The state adopts several measures to curb room for tax evasion, but the effect of some is questioned.

The state will reward companies for meeting their tax duties voluntarily.(Source: SME)

Without tax evasion, Slovakia might have collected more than €2 billion in taxes, according to the VAT Gap report published by the European Commission in late September 2017, assessing the data for 2015.

Though the country improved its gap from the previous year by 1.13 percentage points to 29.39 percent, it still belongs among the countries with the largest gaps. The VAT rate in Slovakia is currently 20 percent. The only country with a larger gap is Romania (37.18 percent).

“The VAT Gap in Slovakia continued its decrease in 2015 from its peak in 2012,” the EC wrote in its report. “In 2015, the VAT Gap fell by an additional 2 percentage points, with growth in revenues more than twice as high as growth in nominal GDP and VTTL [the amount of VAT total theoretical liability – ed. note].”

Efficient VAT collection on the growth

The country made no substantial changes to the VAT regime in 2015, but several measures to improve VAT compliance were introduced earlier in 2014. Among others, Slovakia’s 2014 tax reforms included a wider introduction of cash registers. Furthermore, starting from the fourth quarter of 2013, the government launched the VAT receipt lottery, according to the EC report.

“The fight against tax evasion continues successfully,” Alexandra Gogová, spokesperson for the Finance Ministry, told The Slovak Spectator.

The ministry has adopted several measures to make tax collection more efficient. The effective tax rate in the third quarter of 2017 amounted to 15.16 percent, up by 0.15 percentage points. As such, it belongs among historically the highest rates Slovakia has reported, the spokesperson added.

As for 2018, these include the changes with direct impact on the operation of the internal market’s functioning.

“These measures follow the OECD initiative and BEPS recommendations to prevent the erosion of the tax base and transferring profits abroad,” Gogová said.

Rewards for responsible companies

To motivate companies to meet their tax duties voluntarily, the Financial Administration introduces the tax reliability index. The evaluation will concern all corporate entities, regardless of their size, the number of employees or turnover. The Financial Administration will follow 40 criteria when preparing the index.

Read more: What rewards will tax responsible firms receive and what will be the sanctions? What impact will VAT refund list have? What other measures have been adopted to fight tax evasion?

The rest of this article is premium content at Spectator.sk
Subscribe now for full access

I already have subscription - Sign in

Subscription provides you with:
  • Immediate access to all locked articles (premium content) on Spectator.sk
  • Special weekly news summary + an audio recording with a weekly news summary to listen to at your convenience (received on a weekly basis directly to your e-mail)
  • PDF version of the latest issue of our newspaper, The Slovak Spectator, emailed directly to you
  • Access to all premium content on Sme.sk and Korzar.sk

The processing of personal data is subject to our Privacy Policy and the Cookie Policy. Before submitting your e-mail address, please make sure to acquaint yourself with these documents.

Topic: Finances and Advisory


Top stories

Touring wine cellars in Bratislava Photo

Nearly 30 wine cellars and wineries were opened in the boroughs of Rača, Nové Mesto, Vajnory and Devín during the first edition of Po Bratislavských Vínnych Pivniciach event.

Wine tasting in Pivnica u Štefana in Devín.

How to elect your mayor

When you live in a small village, you don't care about Bratislava. At home, everything is at stake.

Home (for a rest)

Returning from exile is a fine thing, but no one talks about how exhausting it is.

We want a decent Slovakia, people chanted in squares

On the eve of the Velvet Revolution anniversary, people protested in the thousands, calling for a decent Slovakia.

Bratislava protest November 16, 2018