Tax and Accounting News 3/2025

Čo v článku nájdete:

• Financial transaction tax – latest information
• Foreign company which is not established in the territory of the Slovak Republic
• Slovak company operating abroad
• Limiting the deduction of input VAT for the acquisition of motor vehicles and related expenditure
• Other selected changes

Financial transaction tax – latest information

The Financial Transaction Tax Act, which is still the subject of wide-ranging discussions and brings with it a number of outstanding questions in application practice, became applicable from 1 April 2025. The Ministry of Finance of the Slovak Republic is expected to issue guidance on this law in the coming days, which we will then inform you about. We also monitor the most up-to-date information of the Financial Directorate of the Slovak Republic, which continuously updates the most frequent questions about the law on its website. Here you will find Frequently asked questions about the financial transaction tax .

In the Financial Rapporteur No 8/2025 a list of accounts and account codes has been published pursuant to § 4 §. 2 letter (a), (k) and (aa) of the Financial Transaction Tax Act to which the taxpayer directs a payment order which is not subject to a financial transaction tax. Based on the latest information from the Gesturers of the Act from the Ministry of Finance of the Slovak Republic below we present the current interpretation of the application of the Act on Financial Transaction Tax to selected situations from practice:

Foreign company which is not established in the territory of the Slovak Republic

A foreign company becomes a taxpayer of a financial transaction tax if

• has a payment account with a bank established in the Slovak Republic; or
• operates in the territory of the Slovak Republic,

where the definition of the performance of activities in the territory of the Slovak Republic and not provided for in the Financial Transaction Tax ActIt is precisely when interpreting this concept that many questions arise in practice. According to the current interpretation of representatives of the Ministry of Finance of the Slovak Republic, this term should be understood to a similar extent as the exercise of activities in the territory of the Slovak Republic through a permanent establishment pursuant to Act No.595/2003 Coll. on Income Tax. It follows that a foreign taxpayer should apply a financial transaction tax to those payments from a foreign bank account related to its business presence in the territory of the Slovak Republic. For the purposes of determining the scope of financial transaction tax obligations, registration of a foreign taxable person for value added tax is not relevant. In practice, if a foreign person who does not have a Slovak bank account, for example, acquires goods in the territory of the Slovak Republic, who then sells both foreign and Slovak customers, becomes a taxpayer and payer taxes from financial transactions in the scope of those debit (input) transactions that are related to goods sold to Slovak customers on the Slovak market. This means that the payment for goods and related expenses should be distributed by a foreign person relative to the volume of goods belonging to the Slovak market (sold in Slovakia) and apply a financial transaction tax only to this proportion.

Slovak company operating abroad

The tax on financial transactions is subject to all payments as defined in Paragraph 4 (1) of the Financial Transaction Tax Act, inter alia, any financial transaction whereby the amount of funds is debited from the taxpayer’s payment account. This also applies to Slovak companies operating abroad and making payments from a foreign bank account. It follows from the above that the Slovak company becomes a tax payer on financial transactions in relation to all payments it makes from a foreign account, regardless of whether the payment relates to the conduct of business activities in the territory of the Slovak Republic or abroad. Of all such payments from a foreign bank account, the Slovak company has to calculate and pay the tax.

Limiting the deduction of input VAT for the acquisition of motor vehicles and related expenditure

Following a request from the Slovak Republic, the European Commission published a proposal for a Council Implementing Decision authorising the Slovak Republic to introduce a special measure derogating from Article 26 (1) (a). and Articles 168 and 168a of Directive 2006/112/EC on the common system of value added tax. In case of unanimous approval of this Implementing Decision by the Council of the EU limit the right to deduct input value added tax for M1 category passenger vehicles and L1e and L3e category motorcycles not fully used for business purposes (including the provision of certain goods and services related to them) to a fixed percentage of 50%. That special measure would also relieve taxable persons of the obligation to treat the use of such passenger cars and motorcycles for non-business purposes as a service.

The transactions covered by the measure are:

• the purchase, intra-Community acquisition and import of vehicles and their leasing,
• expenditure incurred on the supply and use of goods or services relating to such vehicles, including the purchase of fuel.

On the other hand, certain types of motor vehicles and motorcycles used for certain types of activities where use for non-business purposes is considered negligible, are excluded from the scope of the derogation. This exclusion applies to vehicles and motorcycles

• purchased for resale, hire or leasing,
• used for the carriage of passengers for consideration, including taxi services, the provision of driving exercises, driver training,
• used to replace vehicles on which work is carried out.

The planned start of application of this Decision is from 1.7.2025 and is limited in time to 30.6. 2028, if the Slovak Republic does not request an extension within the prescribed time limit after examination of the percentage limit. According to the current statements of the Slovak Ministry of Finance, the intention of this measure is not to affect entrepreneurs who use their vehicles exclusively for business purposes. This proposal will continue to be discussed in the legislative process and should therefore wait for the law to be definitively amended and interpreted.

Other selected changes

• The Ministry of Finance of the Slovak Republic published a model form of the VAT return form following legislative changes to the VAT Act in force from 1 July 2025, namely to introduce an obligation under § 84a (3) of the VAT Act to the taxable person pursuant to § 84a (2) of the Act on VAT on domestic imports of goods. It will be used for the first time for filing VAT returns for a period starting at the earliest on 1.7.2025.
• Financial Directorate Slovakia following an increase in the amount of food in accordance with Act No 283/2002 Coll. on travel expenses with effect from 1.4.2025 Updated Methodological instruction on the rateability of an employee’s food allowance, to include an employee’s dietary allowance in the employer’s tax expenditure and to include a dietary taxpayer with income pursuant to Article 6 (1) and (2) of Act No. 595/2003 Coll. on Income Tax, as amended, in the tax expenditure of this taxpayer (15/DZPAU/2025/MP).

If you are not aware of your tax or accounting questions, do not hesitate to contact us contact.

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