The State Budget Law was approved by the National Council of the Slovak Republic on 7 December 1996 including a number of amendments to the Income Tax Act.

Until the law is published in its final form the full impact of these changes will not be known.

The information below is a summary of the key expected tax changes and is based upon a preliminary review of Parliamentary drafts.


No changes have been implemented in respect of rates or personal allowances.


The corporate rate is 40%, no changes implemented.


It is proposed that the penalty regime for taxes unpaid or paid late be reduced. The penalty for not paying tax prepayments on time will decrease from 0,3% to 0,1% of the amount liable for every day of delay.

The penalty for not paying the tax liability due on time will change from 0,3% per day to 5% for each and every started calendar month of delay.

In addition, an upper limit for these penalties is to be introduced to limit the maximum penalty to 100% of the liable amount.


There is also to be a clearer definition of what constitutes economically or personally connected persons for the purpose of pricing agreements.

These are defined in the proposed law as being:

  • a physical or juristic person who participates directly or indirectly in the management, control or ownership of the other person; or
  • where the same juristic or physical persons participates directly or indirectly in the management, control or ownership of each other; or
  • close physical persons.

The definition of participation in management, control or ownership for the purposes of this law is understood to be where a person owns more than a 25% share in the basic capital or more than a 25% share of the voting power.


The tax base at termination of business activity of persons who use single bookkeeping accounting system will be corrected for both payables and receivables. This change is to establish a correct and fair tax base.

Prior to this change the tax base could only be amended by adjusting for payables.

The content of this article is intended to provide a general guide to the subject matter. It is therefore not a substitute for specialist advice.

For further information contact Ruth Clamp, Arthur Andersen Bratislava on tel: +42 7 5340 545, fax: 42 7 5340 542 or e:mail directly to or enter text search 'Arthur Andersen' and 'Business Monitor'.