Slovakia proposes new tax on sweetened soft drinks

Slovakia's Ministry of Finance has submitted a draft bill for consultation that introduces a tax on soft drinks sweetened with sugar or any other sweeteners.

The law is proposed to take effect from 1 January 2025.

Details of the proposed tax on sweetened soft drinks

The tax on sweetened soft drinks (TSSD) is intended to be an indirect consumption tax. The tax would be collected and paid by business entities carrying out the first delivery of a sweetened soft drink in the Slovak Republic. Taxpayers would collect the TSSD in the price of the sweetened soft drinks charged to consumers.

It is proposed that drinks that representing specific categories of food that are a partial or sole source of nutrition and are necessary to satisfy nutritional requirements or needs for certain clearly identified population groups should by exempt from this tax.

TSSD taxpayers

A TSSD taxpayer may be the entity that either:

• Produces the drinks in the territory of Slovakia and introduces them onto the domestic market
• Purchases drinks abroad that were produced abroad and introduces them onto the market in Slovakia

The taxpayer should register for the TSSD within five days from incurring a TSSD liability. If the taxpayer already has a tax identification number (TIN), it should be sufficient for the taxpayer to notify the tax authorities that the taxpayer could be liable for the TSSD.

Taxable base

The TSSD taxable base for packaged drinks intended for consumption, or packaged drinks with a high caffeine content, should be the quantity of the drinks expressed in liters. For packaged concentrated substances (e.g. syrups, sparkling nonalcoholic wine, or effervescent tablets), the tax base should be the amount expressed in liters or kilograms.

Tax rates

The proposed TSSD tax rate applicable to a sweetened soft drink will depend on the category to which it belongs:

• Packaged drinks ready for consumption — the proposed rate is €0.15 per liter
• Packaged drinks with a high caffeine content — the proposed rate is €0.30 per liter
• Packaged concentrated substances intended for the preparation of drinks — the proposed rate is €1.05 per liter or €4.30 per kilogram

Tax period

The TSSD-proposed tax period is a calendar month.

Tax return and payment

The taxpayer would be obliged to file a tax return within 25 days after the end of the taxable period in which a tax liability arose and must pay the tax due within this period. If a tax liability does not arise, a tax return does not have to be filed.

Refund of tax

Taxpayers shall be entitled to claim refunds of TSSD from demonstrably taxed soft drinks that are sold/transported outside of Slovakia. For this purpose, the taxpayer must register with the Slovak tax authorities as an exporter. A refund of TSSD must be requested in a separate tax return. Refund of tax shall also be possible in other cases, such as destruction of the product, use for production of other soft drinks, etc. In these cases, the refund mechanism is different from the one applicable for exporters of soft drinks.

Tax records

For each applicable tax period, the taxpayer will be obliged to keep detailed records on the supplied soft drinks in respect of which the tax liability will arise. In addition, detailed records will need to be kept for produced soft drinks, soft drinks acquired abroad and soft drinks supplied abroad.

Next steps

To become law, the draft bill must be approved by the parliament, signed by the President and published in the Collection of Laws.