Tax and Accounting News 4/2025

Čo v článku nájdete:

• Financial transaction tax (FTT) guidelines, new deadlines for first tax periods and electronic form
• Implementation of domestic activities
• Cost accounting
• Cashpooling
• ! New interpretation of the financial report deadlines for the first tax years !
• Communication on a financial transaction tax
• Reduction of the ECB base interest rate with effect from 23.4.2025
• Late VAT registration
• A payer who is assigned a tax identification number pursuant to § 4, § 4b or § 5 of the VAT Act
• European Court of Justice rulings on VAT
• Judgment of the ECJ in Case C-164/24 Cityland (revocation of VAT on registration and removal from the list of payers)
• ECJ judgment in Case C‐213/24 E.T. (sale of land by natural persons)
• Other selected changes

Financial transaction tax (FTT) guidelines, new deadlines for first tax periods and electronic form

On 10.04.2025, the Ministry of Finance of the Slovak Republic published in the Financial Rapporteur guidance on the procedure for assessing the conduct of the taxpayer’s domestic activities, the method of taxation of the costs charged and the automated compensation of balances (hereinafter referred to as the “Guidelines’) pursuant to Act No 279/2024 Coll. on Financial Transaction Tax and on the amendment of certain laws as amended (hereinafter referred to as the “FT Act’) (hereinafter referred to as the “FTT Act’). In addition to the legal basis, the Guidelines clarify the interpretation of the three problematic areas of the FTT Act.

Implementation of domestic activities

The guidance specifies in more detail the concept of “executing domestic activities’ for the purposes of the FTT Act as:

• activity carried out in whole or in part through permanent places or facilities for carrying out activities located in the domestic territory, where the place of activity is considered to be in particular the place from which the taxpayer’s activity is organised, the branch, the office, the workshop, the place of sale, the technical facility, the place of exploration and extraction of natural resources or the permanent place of supply of services to taxpayers or persons working for it, the building site, the place of execution of construction projects and assembly projects; the guidance introduces, beyond the FTT Act, a time test to assess the permanence of the place or facility, which is the period of the majority of the monthly tax period;
• the activity carried out by the taxpayer through the person acting on behalf of the taxpayer and continuously or repeatedly the bulk of the monthly tax period negotiates or concludes contracts on its behalf on a proxy basis;
• a domestic platform or an online market,
• insurance risk related to this activity located in the domestic territory, if the insured property is located in the domestic territory and if the insurance covers any means of transport which is or is to be registered in the relevant domestic register.

Overall, it can be seen in specifying the performance of activities in domestic efforts to complement this definition, which is currently absent from the FTT law. The definition in the Guidelines largely duplicates the definition of permanent establishment from the perspective of the Income Tax Act, although the Guidelines do not refer to the Income Tax Act, nor is it legally binding. On the other hand, in view of the time test provided in the Guidelines, many of the business activities presented so far in Slovakia should no longer be subject to financial transaction tax (e.g. foreign dealers with occasional food stands, foreign fairs and circuses and many others). Storage of the stock of a taxpayer in domestic without any other related activity of the taxpayer does not establish the taxpayer’s domestic activity. According to the Guidelines, the operating condition of the taxpayer in the domestic territory is met if the supply or display of those goods and services in the domestic territory through a permanent establishment or establishment for the pursuit of an activity is a continuous or repeated major part of the monthly tax period. At the same time, they specify and give examples of different situations where a foreign taxpayer has/has no bank account in the territory of the Slovak Republic if the taxpayer carries out transactions which are only partly related to the taxpayer’s domestic activity.

Cost accounting

The tax base shall be the amount of costs charged relating to the taxpayer’s domestic activities. Where a taxpayer enters into a contract or other similar legal relationship with a third party, including the content of the relationship, the means or payments for the taxpayer by a third party to another entity, from the perspective of the taxpayer is within the scope of those means or payments of vouchers, the costs charged. The concept of cost accounting also applies to the allocation of costs (e.g. permanent establishments/organisational units located in Slovakia).

Guidance in this section also includes a negative case definition, which is not a cost accounting exercise. In particular, the assumption of a debt under § 531 and 532 of the Civil Code, whether a new obligation under § 570 to 573 of the Civil Code and the situation where a third party purchases goods or services in his own name and on his own account and then sells it to a taxpayer is not considered as a cost recount. Moreover, the taxpayer is not liable under the Guidelines to pay tax on the amount of costs charged if the financial transaction which is the subject of the costs charged is not subject to tax. The possibility of tax deduction by the taxable person pursuant to Paragraph 10 (5) of the FTT Act, which has been deducted from the taxpayer in the framework of the domestic cost re-accounting, will ensure a level playing field with regard to the cost re-accounting from abroad. It is an elimination measure against the disadvantage of a Slovak taxpayer who has paid for another taxpayer in domestic. The notification of the amount of the tax shall be made only for the tax period in which the costs charged to the taxpayer have been reimbursed, in particular by offsetting or paying. The reimbursement of the costs cleared shall also be understood to mean the reimbursement of the costs cleared by other means. However, the offsetting of claims is not subject to tax.

Cashpooling

The Guideline stresses that financial transactions in cashpooling are not subject to tax only if they are compensation for balances on individual payment accounts of members of the consolidated whole from one provider (i.e. within the same bank) which the provider performs in an automated manner. Thus, the exemption does not apply to cashpooling between such taxpayers’ accounts (members of a consolidated group) held by several providers. Although the guidance was intended to provide a consistent interpretation of the FTT law and to clarify the application of the FTT in specific situations, it is questionable whether the guidelines were able to achieve this. In practice, there remain a number of unresolved issues where it is very difficult to assess the emergence of an obligation to apply a financial transaction tax. In particular, in relation to the concept of carrying out domestic activities, which is decisive in determining the scope of tax obligations of foreign persons without a Slovak payment account, an ambiguous interpretation may result in inconsistent application of the FTT Act. Given the still large number of questions, we recommend assessing each individual transaction separately taking into account all the circumstances of the transaction.

! New interpretation of the financial report deadlines for the first tax years !

The financial report has been published on its website in recent days Up-to-date information on the time limits for the first tax years. The first tax period for financial transaction tax purposes (except for the use of a payment card) is April 2025. Compared with all previous interpretations and information, there has been a change of interpretation and view, in particular, of the time limits for the payment and payment of the tax and the notification of the costs charged. On the basis of the information currently published on the Financial Administration’s portal on the transitional provision of Article 13 (3) of the Financial Transaction Tax Act, it follows that the tax for the first three tax periods (i.e. April 2025 June 2025) may be paid no later than 31.7.2025 by taxpayers who are taxpayers for the purpose of carrying out financial transactions in a foreign account, as well as by taxpayers who are taxpayers for the purpose of conducting financial transactions in a non-transaction account.

However, according to the most recent interpretation, the transitional provision does not apply in the case of a taxpayer who is a taxable person on account of the costs charged to him relating to the execution of a financial transaction relating to the taxpayer’s domestic activity. In such a case, those taxpayers are liable to pay the tax for April 2025 by the end of May and 2.6.2025 respectively and to notify the tax administration within the same period.

This may relate, for example, to the allocation of costs to Slovak permanent establishments, to taxpayers who paid in April the reimbursed costs for financial transactions paid for by third parties, etc.

Communication on a financial transaction tax

The Financial Directorate of the Slovak Republic has made available on its website an electronic form Notification of Financial Transaction Tax, which is submitted by the taxable person exclusively electronically and should be made available upon login by each taxpayer in the sections of the Catalogues of Forms on the Financial Administration.  

Reduction of the ECB base interest rate with effect from 23.4.2025

The ECB reduced the basic interest rate (interest rate on the main refinancing operations) with effect
from 23.04.2025 of the original 2.65% p.a. at 2.40% p.a.

Under the Law on the Administration of Taxes, the tax administrator applies fines for administrative fines of a monetary nature and interest on late payment rates linked to the ECB base interest rate (ECB ZUS).

Overview of fines and interest rates applied by the tax administrator Under § 155 and § 156 of the Tax Code (Law No 563/2009 Coll. on Tax Administration):

Source: Custom Processing  

Source: Custom Processing  

Late VAT registration

The financial directorate of the Slovak Republic published information on the procedure of the domestic taxable person in case of late registration for VAT for the taxable person in case of a turnover of 49 790 Euro before 31.12.2024 and a request for registration after 1.1.2025. The information is intended for domestic taxable persons who, for a maximum of 12 previous consecutive calendar months, have achieved a turnover of EUR 49 790 before 1.1.2025 and submit a request for registration as a VAT payer late in 2025, after the expiry of the 20-day time limit set for the submission of this application. If such a late submission is made, the domestic taxable person submits the application on the old registration form, i.e. with the designation “REGDPv21″ Application for registration, notification of changes, request for deregistration of income tax, value added tax and insurance tax (applicable from 01.07.2021)” The tax office shall register a person in accordance with the rules applicable until 31.12.2024, i.e. after the application has been made, issue a decision determining the date on which he becomes a VAT payer and assigns the VAT identification number to the taxable person. The information also provides a detailed procedure after registration as a VAT payer, following the transitional provision of Article 85kn (6) of the Value Added Tax Act (i.e. the chronological lodging of VAT returns and VAT inspection accounts for each calendar month, the determination of tax periods, the right to deduct VAT and many others). The information includes practical examples; the information is available on the website Financial report of Slovakia.

A payer who is assigned a tax identification number pursuant to § 4, § 4b or § 5 of the VAT Act

The financial directorate of the Slovak Republic published the information on the concept of a payer who has assigned the tax identification number pursuant to § 4, § 4b or § 5″ which is specifically intended for all VAT payers established in the domestic territory who have registered as payers after 31 December 2024, but also for other payers who supply such payers with goods or services in the domestic territory.

Since 01.01.025, in addition to the term “payer’, the new term “payer’ is used in the VAT Act, which has been assigned a tax identification number pursuant to § 4, § 4b or § 5′. This new concept is used in the VAT Act only in selected provisions, in particular in relation to the transfer of tax liability. According to Section 5a of the VAT Act, a payer who is assigned a tax identification number pursuant to § 4, § 4b or § 5 is treated as a payer who:

• became a payer upon receipt of the registration decision for the tax under § 4, starting from the date on which he became a payer; if the payer failed to fulfil the reporting obligation under § 4 (5), then from 1 January of the calendar year following the calendar year in which he exceeded the turnover pursuant to § 4 (5). 1 letter (a)
• has become a payer before the date of receipt of the marketing authorisation for tax pursuant to Article 4 or Article 5, starting from the date of receipt of this decision; or
• is a group starting from the date on which the tax office makes the registration of the group.

Following the difference between the terms “payer’ and “payer’, which is assigned a tax identification number pursuant to § 4, § 4b or § 5′ The financial directorate of the Slovak Republic on its website in the published updated list of tax entities registered for value added tax for payers provides the box “Date of registration” which is the date when the taxable person became the payer (§ 4 (1) (a). and/ to i/ and paragraphs 7 and 8 of the VAT Code) and also indicate in the box entitled “VAT payer from” the date on which the taxable person became the payer who has been assigned the tax identification number under § 4, § 4b or § 5. Any payer who has the status of payer who has a tax identification number assigned pursuant to § 4, § 4b or § 5 of the VAT Act and who, as a supplier, supplies to another payer goods or service in the domestic territory for which a transfer of tax liability is applied (e.g. pursuant to Paragraph 69 (11), (12), (15), (16) of the VAT Act) must pay particular attention to this list. If, under this list, at the time of delivery of the goods or services, the customer has the status of a payer, the goods or services concerned shall be taxed by the supplier in the normal manner (using exit VAT). However, if, at the time of delivery of goods or services, the customer will have the status of payer to whom the tax identification number is assigned pursuant to § 4, § 4b or § 5 of the VAT Act, then the supplier may apply the transfer of tax liability for the goods and services in question, subject to the other conditions defined in the VAT Act. Information the differences between the two concepts and their application in practice explains several illustrative examples most frequently found in practice, especially when delivering construction works. Information available on the website Financial report of Slovakia:

European Court of Justice rulings on VAT

The most recent judgments of the European Court of Justice (hereinafter “ECJ’) on VAT are:

Judgment of the ECJ in Case C-164/24 Cityland (revocation of VAT on registration and removal from the list of payers)

In the present case, the Bulgarian tax office deleted the Bulgarian company from the list of VAT payers, since it did not pay the VAT declared and payable during the five-month period from 1 September 2013 to 30 June 2018. The tax administration refers to three formal infringements of the VAT rules, such as late filing of the tax return, late payment of VAT or late delivery of the VAT invoice sufficient to exclude a taxable person from the VAT system. On the basis of the statement made by the Bulgarian company, the VAT in question, which was granted but not paid, concerned invoices issued to the customer of the company which were the subject of legal proceedings on the ground that the customer did not pay this VAT to the company. However, the company paid the VAT in question to the tax administrator after the tax control had been completed (and thus confirmed the eligibility of the VAT in question). In the question referred for a preliminary ruling, the ECJ held that the first subparagraph of Article 213 (1) and Article 273 of the VAT Directive and the principles of legal certainty and proportionality must be interpreted as meaning that Defend national legislation, which provides for the possibility of the competent tax authority to remove the taxable person from the list of VAT payers on the ground that he has failed to fulfil his VAT obligations without analysing the nature of the infringements and behaviour of the taxable person concerned.

ECJ judgment in Case C‐213/24 E.T. (sale of land by natural persons)

In this case, it is the sale of land in the ownership of the spouses, which authorised the external company to all activities related to the sale of land, including the division of land into smaller plots and the taking of the necessary steps to change the registrations in the land register and land register, to change the parcel designations in the zoning plan (from agricultural land to building land), to provide public engineering networks, to promote parcels with potential buyers and to prepare documents necessary for the closure of notarial records on the sale of parcels to buyers. The tax administration considered that these sales constituted an economic activity which should have been subject to VAT, considering that the plots in question, which were agricultural land, had been converted into building land prior to their sale and that another plot had been purchased for the construction of internal roads and access roads to the individual plots created. In the questions referred for a preliminary ruling, the ECJ has held that Article 9 (1) of Council Directive 2006/112/EC is to be interpreted as meaning that a taxable person for VAT purposes who independently carries out an economic activity may be considered to be a person who sells the land originally constituting his personal property and who entrusts the sale of a professional trader who, as the agent of that person, takes active steps to sell the property using similar means to those used by the producer, trader or person providing the services within the meaning of that provision. In the context of a transaction consisting of a sale, qualifying as an economic activity within the meaning of this Directive, it shall not preclude a taxable person who carries out an economic activity separately from being regarded as a legal community consisting of joint-owners, provided that it is clear that the spouses have jointly, in relation to third parties, carried out a transaction consisting of the sale of land belonging to that Community which constitutes an economic activity and that that Community bears the economic risk associated with the exercise of that activity. That decision confirms previous judgments of the Court of Justice of the EU which define the status of taxable person.

Other selected changes

• In early May, the Official Journal of the EU officially published the decision of the EU Council (2025/852) approving the exemption of the Slovak Republic on limiting the deduction of input VAT to half for the purchase of cars for a purpose other than business. This will apply to vehicles M1, L1e and L3e and, in addition to the purchase price of the vehicles, to input VAT related to expenditure on the use of these vehicles. We have written about this proposal in our previous March 2025 news. This derogation is approved for Slovakia for the period from 1 July 2025 to 30 June 2028. It is currently questionable whether the legislative process in Slovakia can incorporate this change with effect from 1 July 2025. We will keep you informed of developments.
• The financial directorate of the Slovak Republic issued updated information on the validation of tax residence for taxpayers with unlimited tax liability in the Slovak Republic, while the difference from the original information is mainly in part specific cases when confirming tax residence. After a new taxpayer can apply for a tax residence certificate for various institutions established in the Slovak Republic (e.g. banks, employers etc.). However, the tax administrator does not confirm the tax residence on forms issued by different commercial entities (e.g. tax clearance agencies etc.).
• Indirect amendment to the Law on Income Tax, brought about by the amendment to the Law on Sport, with effect from 01.01.2026 in § 6 (2) (a). e) refines the various types of income of an athlete or sports professional which are considered to be income from another self-employment activity, provided that such income does not fall under § 5. (p) other income is supplemented by the absence of revenue received so far by a sports professional under a sponsorship contract in sport which carries out the activity of a sports professional under a contract for the exercise of the activity of a sports professional. At the same time, there is a legislative and technical modification of the references to the footnotes following the modification of the provision of § 6 paragraph. 2 letter e), adding a footnote to the reference defined by an athlete to an amateur athlete who performs sport under an agreement on work done outside employment.
• The indirect amendment to the Accounting Act, brought about by the amendment to Act No 213/1997 Coll. on non-profit organisations providing services of general interest, amending Act No 431/2002 Coll. on Accounting, extends the documents that are placed in the Register of Financial Statements to transparency statements.

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