The major Slovak legislation is the Act No. 595/2003 on Income Tax, as amended by later regulations.
Usually, the income is taxed in the country of employment, unless provided otherwise. Hence, if you are employed in the Slovak Republic, the income tax is deducted from your salary according to the Slovak legislation, unless a bilateral agreement for avoiding double taxation states otherwise. Researchers and teachers with an employment contract or working upon agreements on work performed outside employment relationship in Slovakia are considered as employees and their income is taxed.
The tax period is one calendar year. Income tax is paid monthly in the form of a tax advance.
19 % tax rate is applied to the tax base not exceeding 176.8 times the current amount of subsistence minimum and 25 % tax rate to the tax base exceeding 176.8 times the current amount of subsistence minimum (equal to 35,022.31 € in 2016, with the subsistence minimum equal to 198.09 €/month). The tax base corresponds to the amount of gross wage minus all the contributions to compulsory insurance funds and a non‑taxable sum (exempt from taxation).
Full non‑taxable sum equals 3,803.33 € in 2016.
The non‑taxable sum is applicable also to foreigners. In general, the non‑taxable sum is based on the amount of subsistence minimum applicable for the particular year and its amount depends on the total annual income arising both from work carried out in Slovakia and abroad. A person (taxpayer) who worked in the territory of the Slovak Republic only a part of the year and another part of the year abroad, is eligible for the application of the non‑taxable sum of the tax base appertaining to the taxpayer for the entire year when filing the declaration of taxes in Slovakia.
The tax base can also be reduced by applying a special non‑taxable amount on a spouse (upon fulfilling certain statutory requirements). The resulting tax can be reduced by a child taxation bonus (for a dependent child, i.e. until completing compulsory education or a studying child up to 25 years old) if the employee’s annual taxable income has reached at least 6‑times the level of minimum salary. These conditions refer to foreigners with unrestricted tax liability or foreigners with restricted tax liability (see below) if their taxable income from Slovakia represents at least 90 % of total taxpayer’s income both from Slovakia and from abroad.
The annual child taxation bonus equals 256.92 € in 2016.
- scholarships provided from the state budget (including PhD scholarships), or by higher education institutions or similar benefits provided from abroad, financial support of foundations, non‑profit organisations, etc., except for remuneration for carrying out employment or business activities
- financial resources from grants awarded upon international treaties, by which the Slovak Republic is bound
- benefits from health and social insurance, including old‑age savings
- per diems up to the amount set by law,
- financial amount spent by the employer for the training of an employee related to the employment
- financial contribution of the employer to the board of an employee up to the amount set by the law
- income from employment in the territory of the Slovak Republic of a taxpayer with restricted tax liability (for the definition see the next paragraph) from the employer with the seat abroad (not in the SR) if the period related to the performance of such work does not exceed 183 days in any 12 month period
Unrestricted tax liability applies in the case of a person with a permanent residence in the Slovak Republic or when the person usually stays in the territory of the Slovak Republic for at least 183 days (6 months) in a calendar year. Such a taxpayer pays tax on the income received in the Slovak Republic as well as from his/her income from abroad.
On the other hand, a taxpayer with restricted tax liability is a person who is not a taxpayer with an unrestricted tax liability, or who often stays in the Slovak Republic only for the purpose of studies or enters Slovakia daily (or occasionally) only for the purpose of employment in the Slovak Republic. The taxpayer with a restricted tax liability pays tax only on income received in the Slovak Republic for his/her period of employment in Slovakia. As stated before, tax residence may be further specified in bilateral double taxation agreements.
The decisive points for determining tax residence are: residence, personal home, centre of vital interest – closer personal or economic relations, habitual abode, being a national of one of the states (usually this is set out in Art. 4 of bilateral double taxation agreements)
Double taxation agreements
In order to make the taxing of mobile population easier and to avoid double taxation, the Slovak Republic has concluded bilateral agreements with other countries. Slovakia continuously extends the geographical area covered by taxation agreements, during the time of preparation of this publication, taxation agreements are signed with 65 countries. The list of countries with double taxation agreements with Slovakia is available on the website of the Ministry of Finance of the Slovak Republic.
The taxation conditions, therefore, vary depending on the country of “origin” of a person – if there is a bilateral agreement, and what its provisions are.
Double taxation agreements also state the method of elimination of double taxation, in case the income was taxed in the country of occupation and must be declared in the country of tax residence, where he/she is a taxpayer with unrestricted tax liability. In a case of states, where no double taxation agreement exists, income from abroad, which has been taxed in the country of occupation other than the Slovak Republic, is exempted from taxation in the Slovak Republic. (An authentic certificate of taxation of income must be submitted.) Naturally, this is relevant only to taxpayers with unrestricted tax liability in the Slovak Republic. Legislation, official documents and forms to download are available in Slovak and some of the documents also in English at the website of the Ministry of Finance of the Slovak Republic.
Tax return (declaration of taxes)
After the taxation period (that is one calendar year) the annual clearing of taxes is made by filing the tax return (declaration of taxes), and only then the final level of a non‑taxable amount is calculated dependent on the whole‑year wage.
The deadline for submitting the tax return is 31 March every year (with the possibility of postponing this deadline for 3–6 months upon sending the notification to the competent tax office until 31 March). Only afterwards the tax overpayment or tax arrears can be determined. The taxpayer must pay the tax within the deadline for filing the declaration of taxes. An employee, who worked throughout the year in Slovakia and received taxable income only from employment during the calendar year, may request the annual settlement of income tax from the last employer. It is necessary to submit the request not later than 15 February. The annual settlement will be done by the employer on behalf of the employee. In case he/she will not ask the employer for the settlement until the given deadline, fails to deliver all required documents to this date, or received income from abroad within the tax period, he/she must submit the tax return on his/her own.
In the case of tax residents with unlimited liability who have some income from abroad, it is necessary to state all the incomes in the tax return form and provide documents proving the payment of the tax abroad. Authentic certificate(s) of taxation of income(s) must be submitted. When the taxpayer cannot obtain these documents within the deadline (31 March), he/she shall notify the Tax Office about postponing the deadline to file the tax return (up to 6 months in the case of income from abroad). The tax return form and other tax related documents can be downloaded from the website of the Slovak Finance administration, although in Slovak only. It is recommended to consult the competent tax authority with any tax issues arising from a researcher’s state of permanent residence prior to commencing work in the Slovak Republic.
Local taxes are within the competence of municipal assemblies and are therefore different in every village and town. Local taxes include real estate tax; dog tax; taxes for using public spaces; accommodation tax; vending machines tax; non‑gambling slot machines tax; taxes to drive into and/or park a motor vehicle in the historical centre of a city and nuclear devices tax.
Municipalities also charge local payments for communal waste and small quantities of construction waste.