Taxation in Slovakia

In Slovakia, taxes are levied by the state and local governments. Tax revenue stood at 29.5% of GDP in 2013. The most important revenue source for the state 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]

Insurance policy Max. monthly ceiling Employee % Employer %
Retirement Insurance €4.290 4.0% 14.0%
Disability Insurance €4.290 3.0% 3.0%
Sick Leave Insurance €4.290 1.4% 1.4%
Unemployment Insurance €4.290 1.0% 1.0%
Contribution into Reserve fund of the SIC €4.290 0.0% 4.75%
Guaranty Insurance €4.290 0.0% 0.25%
Injury Insurance no limit 0.0% 0.8%
Health care Insurance €4.290 4.0% 10.0%
Total in % 13.4% 35.2%

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

On 1 December 2015 the Slovak Republic commissioned the electronic system of vignette payment collection and records (hereinafter referred to only as the “electronic vignette system”) for the use of the specified sections of motorways and expressways (hereinafter referred to as the "specified road sections"). Switching the system of vignette payment collection and records into electronic form meant a change in the vignette form - the physical motorway stickers were replaced by vignettes in electronic form.

Currently, there are 3 types of electronic vignettes:

  • 1-year vignette - valid from 1 January of the relevant calendar year (or the day of payment for the vignette by the customer in the relevant calendar year) until 31 January of the following calendar year
  • 30-day vignette - valid for 30 days (including the day of starting date) from the date specified by the customer
  • 10-day vignette - valid for 10 days (including the day of starting date) from the date specified by the customer

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.

Prices

From 2015 the prices (including VAT) are the following:

  • 1-year vignette - EUR 50
  • 30-day vignette - EUR 14
  • 10-day vignette - EUR 10

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.

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)
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