In the current months, all companies in Slovakia receive a notification from the Financial Administration of the Slovak Republic about the classification of tax subjects according to the new tax reliability index. The new index is public – just as the recently introduced list of VAT payers’ bank accounts – and will be published on the website of the Financial Administration of the Slovak Republic for the first time by 30 June 2022 at the latest. Thus, the classification of tax subjects in Slovakia will be more transparent as it was previously.
The classification of tax subjects according to the new public tax reliability index was introduced with effect from 1 January 2022 as part of the amendment of the Slovakian Tax Code. It divides taxpayers into three categories: highly reliable entities, reliable entities and unreliable entities. Below we summarise, what it means for companies to belong to one or another group, in other words, what are the benefits and restrictions of those groups.
Benefits for highly reliable entities and reliable entities in Slovakia
- Acceptance of the request to pay advance payments for corporate income tax in a different manner in justified cases in accordance with Section 42(10) of the Slovakian Income Tax Act
- Acceptance of the request to pay advance payments for personal income tax in a different manner in justified cases in accordance with Section 34(4) of the Slovakian Income Tax Act
- Acceptance of the request to pay advance payments for motor vehicle tax in a different manner in justified cases in accordance with Section 10(11) of the Motor Vehicle Tax Act
- Issuance of certificate of personal account status within 15 days in accordance with Section 53(4) of the Tax Code
- Prioritisation of other actions in order to secure payment of tax arrears before initiating tax collection enforcement proceedings. This is an automatic action by tax or customs collecting agent, where a certain action, e.g. drawing up of a report, summoning, conducting of on-site investigations, etc. is performed before collection enforcement action takes place.
- Acceptance of the request for a consent to dispose of with an object of the pledge, respecting the terms stipulated by tax administrator according to Section 81(7) of the Tax Code. Tax and customs collecting agent should accept each such request.
- Prioritisation of on-site investigation over tax audit in case of verification of excess VAT. This is an automatic action by the tax administrator.
- Possibility to set the date of commencement of tax audit in order to determine the eligibility of a claim for refund of excess VAT by the way of agreement with the tax administrator. This is an automatic action where the controller should contact the representative or the entity by phone, in person, or by e-mail.
- Possibility to set the place of performance of tax audit in order to determine the eligibility of a claim for refund of excess VAT by the way of agreement with the tax administrator. This is also an automatic action where the controller should contact the representative or the entity by phone, in person, or by e-mail.
- Automatic refund of excise tax without a tax audit in the value not exceeding EUR 1,000
- Acceptance of the request to decrease the deposited security for excise tax
- Preparation of a sub-protocol within a tax audit to check the eligibility of excess VAT
- Setting a period of at least 15 days in a notice related to the performance of a tax audit or an on-site investigation
- Reduction of fee for issuance of a binding opinion to one half, i.e. EUR 1,000 vs. EUR 500
- Reduction of fee for the issuance of the decision on the approval of the use of a specific method of determining the tax base of a permanent establishment and the decision on the approval of the use of a valuation method according to Section 17(7) and 18(8) of the Income Tax Act. It means EUR 30,000 vs. EUR 15,000 or EUR 10,000 vs. EUR 5,000.
- Acceptance of the request for a postponement of payment of tax or tax arrears. Terms and conditions from the Financial Administration of Slovak Republic´s portal are not assessed.
- Acceptance of the request to pay tax in instalments. Terms and conditions from the Financial Administration of Slovak Republic´s portal are not assessed.
Restrictions for unreliable entities in Slovakia
For taxpayers who are rated as unreliable entities in Slovakia a reduced period applies for compliance with the obligations related to tax audit, enforcement proceedings or on-site investigations. This period of eight days cannot be prolonged.
If you want to know more about the classification of tax subjects in Slovakia, we recommend you visit the website of Mandat Consulting, k.s. and contact the local WTS experts in Slovakia.
