Taxation in Slovakia

Taxation
An aspect of fiscal policy
Policies Government revenue Tax revenue Non-tax revenue Tax law Tax bracket Tax threshold Exemption Credit Deduction Tax shift Tax cut Tax holiday Tax advantage Tax incentive Tax reform Tax harmonization Tax competition Double taxation Representation Unions Medical savings account Tax, tariff and trade
Economics Price effect Excess burden Tax incidence Laffer curve Optimal tax Theory Optimal capital income taxation
Collection Revenue service Revenue stamp Tax assessment Taxable income Tax lien Tax refund Tax shield Tax residence Tax preparation Tax investigation Tax shelter Private tax collection Tax farming
Noncompliance Tax avoidance Tax evasion Tax resistance Tax haven Smuggling Black market Transfer mispricing Unreported employment Tax shelter
Distribution Tax rate Progressive Regressive Proportional
Types Direct Indirect Per unit Ad valorem In rem Capital gains Carbon Consumption Dividend Ecotax Excise Fuel Georgist Gift Gross receipts Income Inheritance (estate) Land value Payroll Pigovian Property Sales Sin Single Stamp Steering Turnover Value-added (VAT) Corporate profit Excess profits Windfall profits Negative (income) Flat Wealth
International Financial transaction tax Currency transaction tax Tobin tax Spahn tax Tax equalization Tax treaty Permanent establishment Transfer pricing European Union FTT
Trade Custom Duty Tariff Import Export Tariff war Free trade Free trade zone Trade agreement
Religious Church tax Eight per thousand Teind Tithe Fiscus Judaicus Leibzoll Temple tax Tolerance tax Jizya Kharaj Khums Nisab Zakat
By country List of countries by tax rates Tax revenues as %GDP Albania Algeria Argentina Australia Azerbaijan Bangladesh Bhutan Bulgaria Canada China Colombia France Germany Greece Iceland India Indonesia Iran Ireland Israel Italy Japan Kazakhstan Lithuania Malta Namibia Netherlands New Zealand Norway Pakistan Palestinian territories Peru Philippines Poland Russia Singapore South Africa Sweden Switzerland Tanzania United Kingdom United States Uruguay

In Slovakia, taxes are levied by the federal and local governments. Tax revenue stood at 29.5% of GDP in 2013. The most important revenue source for the federal government is the income tax, social security, value-added tax and corporate tax.

Income tax

The income tax in Slovakia is levied at two different rates of 19% on income below 35.022,31 Euro and 25% above ^[1] A personal allowance of 3.803,33 Euro apply, which is phased out when yearly income hit 25% income tax bracket. In case of a non-working spouse a further allowance can be claimed.

Social Security contributions

All employment income is mandated to pay into various social funds by law. In 2016 the rate for the employee is 13.4% and the employer contribution 35.2% of corresponding salary. Maximum monthly income base is 4.290 Euro.^[2]

Value-added tax

The value-added tax (VAT) in Slovakia is levied at a rate of 20%, but is expected to fall back to 19% when the crisis is over. A lower rate of 10% is levied on medicine and certain books.^[3]

Corporate tax

The corporate tax in Slovakia stood at 22% for 2014.^[4] Resident companies are those which have their legal seat or place of effective management in the Slovak Republic.

Tax reform after the Soviet era

The time after the collapse of the soviet, a long range of range of reforms have been made, to bring the country from a government run economy to a free market economy. A large tax reform was enacted in the year 2003. It included a long range of reforms including abolishing most deductions on the income tax, and bringing it down to a flat rate of 19% instead of a progressive rate from 10% to 38%. The corporate tax fell from 25% to 19%. Furthermore, the two rates of VAT 14% and 20% were merged into one band of 19%. All inheritance and gift taxes was also abolished.^[5]

Road tax and toll

Road tax and toll payment in Slovakia is compulsory. These are paid for with vignettes, purchased for between one week to one year periods. Cost is determined by the weight of the vehicle. Additional costs are incurred for trailers attached to vehicles.

Vehicles below 3.5 tons

Persons travelling on a highway or speedway in Slovakia with a vehicle with maximum permissible total weight below 3.5 tons, are obliged to pay road tax by buying vignette. There is a traffic sign on each border crossing informing about this obligation but no further reference within the country.

Types of vignettes

Currently, there are 6 types of vignettes:

• Green - valid for 1 year
• Pink - valid for 30 days (including pierced date)
• Blue - valid for 7 days (including pierced date)

If a trailer category O1 or O2 is attached (to a tractor vehicle within the vehicle categories M1, N1 or N1G, and the maximum permissible weight of the vehicle and trailer exceed 3.5 tons, drivers have to buy additional vignette for heavy vehicle combinations.

• Purple - valid for 1 year (from January 1, 2011 until January 31, 2012)
• Orange - valid for 30 days (including pierced date)
• Yellow - valid for 7 days (including pierced date)

Prices

In 2011 the prices (including VAT) are the following:

• EUR 50 - green and purple vignette
• EUR 14 - pink and orange vignette
• EUR 7 - blue and yellow vignette

Vehicles over 3.5 tons

Since January 1, 2010 all vehicles above 3.5 tons maximum permissible total weight (including busses) must pay electronic toll when driving in Slovakia. Information about this obligation is stated by a traffic sign on each border crossing. Generally all main corridors (national roads) and highways are toll liable. A company named SkyToll A.S., runs a system based on a combination of GPS, GSM and DSRC technology. Each driver has to stop at one of the distribution points located on each border crossing used by heavy traffic and register the vehicle. The driver obtains an electronic on-board unit.

External links

• Web page about the electronic toll system in Slovakia
• Correct usage of the on-board unit
• Toll liable roads in Slovakia
• National highway company of Slovakia - information about vignettes
• Correct usage of a vignette
• Road tax liable highways in Slovakia

References

1. ↑ "KPMG". Income tax rates.  Check date values in: |date= (help)
2. ↑ "KPMG" (PDF). Tax Card 2013.  Check date values in: |date= (help)
3. ↑ "VAT Live". VAT rate rise to 20%.  Check date values in: |date= (help)
4. ↑ "KPMG". Corporate tax rate 2014.  Check date values in: |date= (help)
5. ↑ "Visegradrevue". Tax reform Slovakia.  Check date values in: |date= (help)