Konsolidačný balíček 2025: Prehľad najdôležitejších daňových zmien

The government recently approved a consolidation package that will bring numerous changes to the tax landscape starting January 1, 2025. These changes will affect not only the business sector, but also individuals - non-entrepreneurs.

Below we provide an overview of measures that should not be overlooked:

Taxation of bank transfers and withdrawals

With the adoption of the Act on the Financial Transaction Tax, a new tax is being introduced that represents a tax burden for companies and self-employed individuals that they have not previously experienced. This tax will be applied to bank transfers and cash withdrawals, thereby affecting the daily financial operations of entrepreneurs. The act comes into effect on January 1, 2025, with the first tax period beginning in April 2025.

The following tax rates will apply to financial transactions:

– 0.4% – on bank transfers, with a maximum tax amount of EUR 40 per transaction (the taxpayer will incur the EUR 40 fee on a transaction amount of EUR 10,000).

– 0.8% – on cash withdrawals.

– 0.4% – he recharged costs from another person who made payments on behalf of the taxpayer related to his business activities in Slovakia.

– EUR 2 / year – for the use of a payment card for business purposes.

Of course, there will be exceptions for transactions that are not subject to this tax. These include intrabank transfers between accounts of the same taxpayer (ie, transfers within the same bank), card payments (excluding cash withdrawals), payments of health insurance/social security contributions and taxes, and other transactions.

The tax period will be the calendar month, with the tax due by the end of the following month. The taxpayer (the payment service provider, ie, the bank) will be required to submit a notification of the tax amount to the tax authority within the same period, which will be treated as a tax return. In certain cases, the taxpayer must fulfill this obligation instead of the provider, eg, if they transfer money through foreign accounts. For payment card usage, the tax period will be the calendar year, not the month.

Questions for consideration : Who will be considered a payment service provider besides standard banks? If a company only has foreign accounts, should it consider transferring its account to a Slovak bank? Has the company accurately accounted for the financial transaction tax costs in its internal budgets for the year 2025?

Amendment to the Income Tax Act and its impact on the business sector

Similar to the Financial Transaction Tax Act, the amendment to the Income Tax Act will come into effect on January 1, 2025.

Below is a summary of the key changes that may also affect your business:

Taxable Income

– A new tax rate of 24% will apply to legal entities that generate taxable income exceeding EUR 5 million.

Note : Be cautious of excessive expense deferrals (such as excessively high tax deductible accruals) into 2024, as they will be tax-effective at a lower rate than in 2025.

– Reduction of the tax rate from 15% to 10% for legal entities and an increase in the threshold for taxable income for its application from EUR 60 thousand to EUR 100 thousand.

– Increase in the taxable income threshold for self-employed individuals (entrepreneurs) for the application of the 15% tax rate from EUR 60 thousand to EUR 100 thousand.

– Reduction of the withholding tax on dividends for individuals from 10% to 7%, with this reduction applying only to dividends paid from profits for tax periods starting in 2025.

Electromobility support

– Simplification of expense documentation for electricity costs when charging electric vehicles at home based on:

the average monthly prices published by the Statistical Office of the Slovak Republic for electricity consumed during charging using alternating current at home,

and

the amount of electricity consumed as stated in the registration certificate or in the technical certificate, or from additional data provided by the manufacturer or seller.

– Tax incentives for electric vehicles and plug-in hybrid vehicles provided to employees who also use them for private purposes — the non-monetary income of the employee will be reduced to 0.5% of the vehicle's purchase price (compared to the original rate of 1 %, which continues to apply to vehicles with internal combustion engines).

The aforementioned changes represent a positive step towards tax support for electromobility, but many questions (eg, the tax treatment for wall boxes provided to employees for home use) remain unresolved.

Changes in VAT Rates

With the amendment to the Value Added Tax Act, the general VAT rate will increase from 20% to 23% starting January 1, 2025.

At the same time, the reduced tax rate of 10% will be eliminated. Instead, a new reduced tax rate of 19% will be introduced. The second reduced tax rate of 5% remains unchanged.

The act further establishes a list of goods and services to which the new reduced tax rates will apply. Below are a few examples:

– 5% VAT – on basic food, medicines, medical devices, catering services consisting of meal preparation, hotel services, books and printed materials, fitness centers, sports events, and more.

– 5% VAT – rental housing support.

– 19% VAT – on other food (other than basic food), electricity, catering services consisting of serving non-alcoholic beverages, and more.

Correction of the tax base upon the occurrence of a tax liability by December 31, 2024

If, after December 31, 2024, an event occurs that requires a correction of the tax base and VAT on the supply of goods or services for which the tax liability arose both before and after this date, the VAT rate applicable at the time the tax liability arising will be used for the correction of the tax base and tax. The taxpayer is obliged to calculate the amount of corrected VAT proportionally according to the extent to which the reduced tax base relates to each incurred tax liability.

Increase in the number of companies required to pay the special levy

The consolidation package will also result in an amendment to the Act on Special Levy in Regulated Industries, with significant changes occurring in several areas.

Pharmaceutical Sector

Before the amendment to the Act on Special Levy (specifically from June 15, 2018), there was uncertainty regarding whether an entity with a license exclusively from the ŠÚKL (the State Institute for Drug Control) falls under the definition of a regulated person, and, consequently, whether it is obliged to pay the special levy.

As of January 1, 2025, this uncertainty will be eliminated by the amendment to this act. Pharmaceutical companies (primarily manufacturers and wholesalers of medicines) with pre-tax profits exceeding EUR 3 million and with licenses from either the Ministry of Health of the Slovak Republic or the ŠÚKL will be considered regulated entities. With this status, they will have various reporting obligations and will also be required to pay the special levy.

The Electronic Communications Sector (eg, mobile operators)

An individual rate for calculating the special levy is set at 0.01576 (ie, 18.912% annually) for companies involved in electronic communications activities, which include, among others, also mobile operators.

Refineries

The amendment to the special levy act expands the list of industries that will be considered regulated. From January 2025, a company that holds an authorization for the " production of petroleum products and their chemical processing based on a trade license," and whose pre-tax profit exceeds the aforementioned threshold of EUR 3 million, will also be classified as a regulated personnel

This sector will also be subject to an individual special levy rate of 0.025 (ie, 30% annually).

Other regulated industries

For other regulated industries, the levy rate will remain unchanged. For the banking sector, it will stay at 0.025 (ie, 30% annually), while for other regulated entities, it is set at 0.00363 (ie, 4.356% annually).

The original draft of the act also included an increase in the levy rate for the energy sector. However, the government has abandoned this proposal, and therefore the levy for this sector will not be increased for now.

Note : Companies that will be subject to the obligation to pay the special levy will need to adopt separate accounting for regulated and unregulated revenues.

Other important changes

Higher contributions for high-income employees

Increased cap for social security contributions for employees with higher incomes, from the current EUR 9,128 to EUR 15,730 (the maximum assessed base will increase from 7 times to 11 times the average monthly wage).

Lower Child Tax Bonus

Starting January 1, 2025, the eligibility for the tax bonus will be adjusted based on the child's age category as follows:

– EUR 100 per month for a child under 15 years old (instead of EUR 140 per month in 2024),

– EUR 50 per month for a child aged 15 to 18 years old (instead of EUR 140 per month in 2024).

The tax bonus for a dependent child over 18 years old will be completely abolished (in 2024, the tax credit was EUR 50).

The amendment also introduces a gradual reduction or even the elimination of the entitlement to the tax bonus for high-income taxpayers.

Replacement of the parental pension with an assignment of a share of paid tax

The amendment to the Income Tax Act also introduces a change in the form of parental pension payments through income tax assignment, allowing 2% of the paid tax to be allocated to each parent who is a recipient of an old-age, disability, or retirement pension. The taxpayer can allocate a total of up to 4% to both parents, ie, 2% to the father and 2% to the mother. The minimum amount of allocated tax for one parent is set at EUR 3.

If you would like to learn more about this topic or are interested in our assistance, please do not hesitate to reach out to the author of this article or directly contact your manager at EY in Slovakia.