Income tax prepayments

Based on the information provided by the Ministry of Finance, a new ruling related to the Income Tax Act amendment No. 60/1998 Coll. that introduced so called "millionaire surcharge" (see Slovak News from April 1998) is being prepared.

Under this ruling, individuals should pay higher 1998 income tax prepayments, including income from dependent activities, if their taxable income exceeds Sk 1,080,000.

The "millionaire tax" legislation will not apply to legal entities, i.e. corporate income tax prepayments will not be increased by the millionaire surcharge.

Social Security Act

A proposal of the Social Security Act on insurance basis that would replace the system of continual financing is being prepared.

According to the amendment, there will not be a new law on pension increases each year, but pensions will be adjusted annually from 1 July 1998.

Under the act, the mandatory employment period increases from 25 to 30 years and individuals are allowed to retire three, instead of the current two, years before reaching retirement age.

It is proposed to reduce pensions of people who still work by one third. The pension computation is to be based on the total length of the employment period, not only a part, which is at present generally 10 years.

Act on Tourism

The Act on Tourism, which should enter into effect on 1 January 1999, has been submitted for additional comments.

The act should represent a significant legislative support for travel agencies' clients and, amongst others, it should include provisions on the creation of a tourism development fund.

The information in this newsletter is correct to the best of our knowledge and belief at the time of going to press. Specific advice should be sought, however, before investment and other decisions are made.

For further information contact Mr Frank Walsh on +421 7 5340 545 Email directly on Click Contact Link