The proposal of an Income Tax Law amendment which should enter into effect on 1 July 1998 is being discussed in Parliament. It comprises the following changes:

Individuals

  • The definition of an employer for income tax purposes may be extended to include "economic employer".
  • To prevent double taxation, the tax payer can choose between the treaty method and the method of income exemption with progression.

Legal entities

  • Government bonds issued in a foreign currency shall be exempt from tax.
  • On the fulfilment of certain conditions, specific foreign investors will be entitled to 75% tax liability reduction.
  • The new term "related persons" replaces the current term of "economically and personally related persons". Under the amendment, related persons are domestic persons economically and personally associated with foreign persons.

In compliance with the OECD Directive on transfer pricing, the methods used for price determination must be substantiated.

Under the amendment, marketing studies are included into the first depreciation group.

Further information will be published later in Slovak News.

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