With an amendment to the Tourism Promotion Act, the issuance of vacation vouchers was introduced in Slovakia. The amended provisions apply to employers having at least 50 employees and to the recreations started after 31 December 2018. Another law amendment in Slovakia enables tax-exemption of non-cash income in the form of accommodation services provided to employees.
On 27 November 2018, on the second attempt, the Slovak Parliament adopted an amendment to the Tourism Promotion Act, introducing the issuance of vacation vouchers. This amendment also indirectly amends the Income Tax Act and the Labour Code in Slovakia.
Conditions for providing vacation vouchers
Vacation vouchers have the form of a monetary allowance. The obligation of employers to provide such allowance or vacation vouchers depends on the number of employees. If an employer employs more than 49 employees and they ask for the provision of vacation vouchers, the employer is obliged to provide it. The employee requesting the allowance must be employed continuously for at least 24 months by the same employer; he/she may apply for the allowance at one employer only.
Employees are obliged to furnish prove of any eligible expenses by means of accounting documents within the period of not more than 30 days after the end of the vacation. Unless agreed otherwise, vacation vouchers are provided upon the next pay-out date.
The maximum amount of vacation vouchers is EUR 275 per year, i.e. 55% of the maximum amount of EUR 500. The allowance in this amount is a tax-deductible cost of the employer. As regards the employee, it is a tax-exempt income, not subject to any tax obligations. The employer can increase the allowance up to the full amount using resources from the Social Fund.
Exemption of non-cash income in the form of accommodation services provided to employees
Taking into account the increasing employers’ demand for quality workforce, the government has also decided to support labour migration within the Slovak Republic. This support has two forms:
- Exemption of a part of non-cash income in the form of accommodation services
- Extension of tax-deductibility of costs of such accommodation
The essential condition is that the employer must engage in multiple-shift production activities.
For an employee, such non-monetary income up to EUR 60 may be exempt, with effect from 1 January 2018. An employee is therefore entitled to apply this exemption in his/her annual settlement and/or tax return for the year of 2018.
Furthermore, the amendment stipulates that any tax loss incurred in connection with the operation of a facility for employees’ accommodation is not tax deductible.
Double tax bonus
The Slovak Parliament shall also discuss a proposal presented by members of the Parliament seeking to double the amount of tax bonus for a dependent child under six years. Estimated effectiveness is from 1 April 2019. It would mean that employees would be able to utilize the increased tax bonus already for the month of April 2019.