Major revision to the Income Tax Act
Parliament passed a major revision to the Income Tax Act on Thursday. It includes provisions against aggressive tax planning. Slovak athletes and artists not residing in Slovakia will pay Slovak income taxes. MPs did not approve a provision that would force individuals who own shell companies abroad pay taxes in Slovakia, though. The revision defines digital platforms with the aim of ensuring that sharing economy firms such as Uber and Airbnb pay taxes in Slovakia on their Slovak activities. It changes the state subsidy for young people taking mortgages from an interest rate deduction to an income tax bonus totaling 50% of the interest rates paid, up to €400 annually. It introduces a €50 tax bonus for clients of Slovak spa facilities. Occasional income up to €500 a month will no longer be exempt from income tax. It exempts royalties on patents and software from income taxes. It introduces a 21% tax rate on capital gains upon leaving the country, if a company leaves Slovakia and moves its assets abroad. It outlines new rules for transfer pricing. 200% of spending on research instead of the current 125% will be tax deductible.