THE GOVERNMENT OF THE SLOVAK REPUBLIC HAS APPROVED AN AMENDMENT TO THE INCOME TAX ACT, WHICH INTRODUCES A MINIMUM TAX FOR SPECIFIED LEGAL ENTITIES AS OF 01.01.2024.

#105The Government of the Slovak Republic has approved an amendment to the Income Tax Act, which introduces a minimum tax for specified legal entities as of 01.01.2024

The amendment to the Income Tax Act approved by the Government of the Slovak Republic represents a significant change in the tax law, in particular as regards the introduction of the minimum tax for specified legal entities. This legal commentary focuses on the main aspects and implications of this amendment.

The essence of the amendment is introducing a minimum tax obligation for legal persons whose tax liability in their tax return is lower than the amount of the minimum tax. If a legal entity makes a tax loss or its tax liability is lower than the minimum tax, it must pay the minimum tax.

The minimum tax is paid by a taxpayer whose tax liability calculated in the tax return is lower than the amount of the minimum tax for a corporate taxpayer, i.e. this taxpayer pays the minimum tax even if it has a tax loss.

The minimum tax is payable within the same period as the tax liability, i.e. within the period for filing the tax return. At the same time, the possibility of crediting the minimum tax paid (or the positive difference between the minimum tax and the tax calculated in the tax return) in three immediately consecutive tax periods is provided for, but only in the amount exceeding the minimum tax.

The amount of the minimum tax is set between 340 € and 3,840 € and depends on the taxable income for the tax period. This is an important parameter that will significantly impact corporate tax obligations.

The set minimum tax rate is halved if the taxpayer is a taxpayer who employs disabled workers.

The amendment also provides for a benefit in the form of a halving of the minimum tax rate for taxpayers who employ disabled workers. This measure is intended to encourage the employment of persons with disabilities.

However, the amendment has yet to be approved by the National Council of the Slovak Republic.

The amendment to the Income Tax Act represents a significant change in the tax regime for legal entities in Slovakia. The introduction of a minimum tax is intended to ensure that even those legal entities that make a tax loss or have low tax liabilities contribute to the state treasury. At the same time, the amendment takes into account social responsibility and the promotion of employment of persons with disabilities. Taxpayers and tae informed about the new rules and comply with the current tax rules.