Corporate income tax
Corporation income tax (CIT) is charged in the Slovak Republic at the standard rate of 19% and is payable by a Slovak incorporated company holding property in the Slovak Republic, or a non-resident company trading in the Slovak Republic through a branch. The tax is reportable to the tax authorities on an accounting year basis.
A non-Slovak resident company holding Slovak property will be subject to income tax at the basic rate of 19%.
Withholding tax at 19% is applied to rental payments made to a non-resident (rate can be decreased by a double tax treaty). Under certain Slovakian double tax treaties, rental profits realised by a non-resident entity may be classified as either royalties or business profits. Royalties are subject to Slovakian CIT at 19%, whereas business profits are not taxable in the Slovak Republic unless realised via a Slovak PE.
If a non-resident files a Slovak tax return, (either voluntarily or due to the presence of a Slovak PE), and Withholding tax paid can be offset against the CIT due. Any excess tax paid is refundable.
Capital gains
Capital gains realised on the sale of real estate or shares in a real estate company by a Slovak incorporated company or non-resident company carrying on a trade in the Slovak Republic through a branch are subject to corporation tax at the standard rate of 19%.
Non-resident companies disposing of Slovak property are generally subject to corporate tax on any gains realised on the sale of real estate or shares in a real estate company if the proceeds are received from a Slovak resident entity.
Property tax
There is no tax on the value of real estate held in the Slovak Republic by wither resident or non-resident entities.
Property transfer taxes
Real estate transfer tax was abolished on 1 January 2005. Therefore, the purchase of Slovak real estate property is not subject to any property transfer tax in the Slovak Republic.
VAT
VAT registration is compulsory for resident and non-resident companies trading in the Slovak Republic through a branch. VAT registration is necessary for entities whose taxable supplies in the Slovak Republic exceed SKK 1.5 million for a period of 12 months (limit applicable from 1 May 2004).
Foreign business entities commencing a business in the Slovak Republic have the obligation to register immediately. VAT is charged at the standard rate of 19% applicable in the Slovak Republic. Certain exemptions exist. However, it is possible to waive the exemption in certain circumstances (e.g. on supply of a building including the connected land after 5 years from the issuance of the first occupancy permit decision, and on some rental supplies of real estate).
The above is for general information purposes only. It is not intended to be comprehensive or to provide any specific tax advice.