Tax and accounting news 8/225

Čo v článku nájdete:

• Financial transaction tax information
• Foreign legal persons
• Foreign legal persons and branches of foreign persons
• Recent judgments of the European Court of Justice (‘ESD’)
• Other selected changes

Financial transaction tax information

The Financial Report published Information on the Communication on the Financial Transaction Tax for foreign legal entities and their branch offices.

Foreign legal persons

Foreign companies which carry out financial transactions from a foreign bank account in connection with the activity carried out in Slovakia become simultaneously the payer of a financial transaction tax and are under an obligation to submit a form “Notification of a financial transaction tax” (hereinafter referred to as “Notification”) for this purpose. If these foreign companies have not yet been obliged to serve the financial management of the submission by electronic means, since they are not VAT payers in Slovakia or a legal person registered in the Commercial Register of the Slovak Republic, they may submit the Notice in paper form. In the case where a foreign company does not yet have the taxpayer’s personal account allocated, the financial transaction tax is only payable after it has been notified to the tax authorities.

Foreign legal persons and branches of foreign persons

The foreign company and the branch of a foreign person are separate taxpayers of the financial transaction tax. If they operate in the territory of Slovakia and do not carry out financial transactions in connection with this activity through the Slovak bank, they become simultaneously taxable persons and are obliged to submit a notification form. In this case, there may be three situations:

1. Taxpayer and taxpayer is only a foreign company

If such a foreign company does not have an obligation under Article 14 of the Tax Code to serve the financial management of the filing by electronic means, it may lodge a Notice in paper form. In the form of Notice, in the section Data on the taxable person states the business name and registered office abroad.

2. Taxpayer and taxable person is only an organisation of a foreign person

Organizational branch of a foreign person who is registered in the Commercial Register of the Slovak Republic provides a separate Notice as a tax payer. In the form of Notice, in the section “Information on the taxable person’, the name, registered office (slovak address) and registration number (organisational branch of a foreign person). If a foreign person established in the territory of Slovakia has two or more establishments, which are both taxable persons, each branch of a foreign person submits a notification separately, in the form of a Notice, in the section “Data on the taxable person’, each branch shall indicate its data as contained in the extract from Business register of the Slovak Republic.

3. Taxpayer and tax payer is also the organization of foreign person and foreign company

Where both the financial transaction tax taxpayer and the tax payer are both the organisation of both a foreign person and a foreign person (formator), two separate notices shall be submitted for each tax payer.

Recent judgments of the European Court of Justice (‘ESD’)

Judgment of the ECJ in Case C-808/23 Högkullen AB v Skatteverket (destination of market value in the open market): In the present case, the parent company Högkullen provided its subsidiaries with services in the areas of management, finance, real estate management, investment, information technology and personnel management, and applied VAT in the amount invoiced for these services. The subsidiaries were not fully entitled to deduct input VAT because of their status and activity.

The remuneration for management services was determined on the basis of an increased cost method and consisted of an amount corresponding to the costs incurred by Högkullen for the purchase and provision of services, including a profit margin. In this respect, Högkullen applied the allocation key which showed that a certain proportion of its management costs and costs, such as premises, telephone, information technology, representation and travel, could be attributed specifically to the services provided to subsidiaries. On the other hand, other costs (in particular, so-called “shareholders’ costs’) such as accounts, audit, general meeting and raising capital are not related to the services provided. These costs were therefore excluded from the calculation of the above-mentioned consideration for management services. The tax administration questioned the valuation of the services provided to the subsidiaries at market value level and on the assumption that there are no comparable services on the market which would be freely offered, established a tax base corresponding to the total costs incurred by Högkullen in 2016 (i.e. it also included ζ costs per shareholder) for the tax base. However, Högkullen considered that the various services it provided to its subsidiaries had to be assessed separately and that corresponding comparable services on the free market could then be found. The ECJ ruled that Articles 72 and 80 of the VAT Directive must be interpreted as meaning that prevent the parent company’s active management services from being considered by the tax office as a single performance, which excludes that the market value of these services on the free market can be determined by comparing prices within the meaning of the first paragraph of Article 72 of the Directive (transposition of Article 22 (8) of the Slovak VAT Act). Although the case in question was in favour of Högkullen, we recommend that companies reconsider price setting within intra-group service provision, both with regard to transfer pricing rules and the correct pricing, but also with a view to reviewing the VAT base if intra-group services must be considered as different and independent services and not as a single complex service. This applies particularly if the recipients of the service are not VAT payers or do not have a full right to deduct input VAT, where the tax administrator may apply the relevant provisions of Paragraph 22 of the VAT Act.

Tip: Do you not know about such a broad issue as transfer pricing rules? Development of transfer documentation and adjustment of transfer prices is one of our services with which we will be happy to help you!

Other selected changes

• Amendment to Decree No 229/2014 of the Ministry of Finance of the Slovak Republic Z. z. laying down the scope of the tax rules on which the application of a binding opinion may be issued, which extends the scope of the provisions of the Value Added Tax Act with effect from 1 September 2025, on which taxpayers have the possibility to apply to the Financial Directorate of the Slovak Republic for a binding opinion.

The scope of the areas on which a binding opinion may be sought from the point of view of VAT legislation after a new one includes the assessment of the applicable VAT rate for services (to date only for goods) and the assessment of taxable trade in supplies of goods, services and domestic acquisitions of goods from another Member State. The scope of application of the Decree is also extended to all provisions of the FTT Act. The application for a binding opinion shall be a toll service and shall be accompanied by a detailed description of the facts that will arise or are expected and shall form the basis for the issue of a binding opinion, a proposal to apply the procedure under the relevant tax legislation, a legal assessment of the case and the amount of the business case envisaged.

• The Financial Rapporteur published a measure of the Ministry of Finance of the Slovak Republic of 29 July 2025 No MF/008470/2025-74 establishing a template for an organisation with an international element, a civil association, a trade union, a non-investment fund, a non-profit organisation providing services of general interest and a foundation (hereinafter referred to as “the measure’) which enters into force on 15 August 2025. Information on this measure, available on the website, has been published on the website of the financial report. Financial report.

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