2020 tax changes address exporting incomes into tax havens

Tax experts welcome scrapping of various exemptions and favours.

(Source: Sme)

Businesses have been calling for a comprehensive revision of tax and labour legislation for years. While major tax reform is expected in 2021, the smaller changes the Matovič cabinet has introduced over the past year are seen as the harbinger of that bigger change.

The four-party ruling coalition of Igor Matovič that took over during the first wave of the pandemic in March 2020, adopted the Lex Corona legislation, to make the life of businesses easier during the pandemic. Later in 2020, it adopted a package of tax changes. While the business sector has welcomed some of them, it considers their extent to be insufficient and non-systematic.

“The Business Alliance of Slovakia has been pursuing the return of the flat tax rate and a fundamental reform of levies,” Peter Serina, executive director of the Business Alliance of Slovakia (PAS), specified their reservations in an interview with The Slovak Spectator.

Radovan Ihnát from the Slovak Chamber of Tax Advisers perceives the package as a forerunner to a big tax reform.

“At first glance, the revision to the Income Tax Act may look little ambitious, but it should be seen in the context of the government's programme and the recovery plan as an amendment that prepares the foundation for a big tax reform,” Ihnát told The Slovak Spectator. The reform is to be discussed and adopted later in 2021, to become effective as of January 2022.

Changes in the tax system

The parliament approved the Income Tax Act and other respective laws on December 2, 2020, when 84 of present 131 MPs voted in favour of the changes.

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