The Slovak Parliament approved measures for consolidating public finances (the so-called Konsolidačný balíček od roku 2025). The approved legislation introduces a tax on bank transfers, increases the standard VAT rate (while maintaining reduced rates for certain goods and services), modifies the conditions for applying the reduced corporate income tax rate, and lowers the dividend tax rate. Below, we summarize the key aspects of the new legislation.
Changes in Corporate Income Tax for Entrepreneurs and Small Businesses
- The taxable income threshold for applying the reduced 15% tax rate has increased from €60,000 to €100,000.
- A new reduced tax rate of 10% has been introduced for legal entities with taxable income up to €100,000.
Reduction of Dividend Tax
From January 1, 2025, the dividend tax rate will be reduced from 10% to 7%. This reduction applies to profits distributed for tax periods beginning on or after January 1, 2025. In other words, dividends from 2024 profits will still be taxed at 10%, but profits distributed from 2025 will benefit from the lower 7% rate, one of the lowest in Europe.
Increase in Road Toll Prices
From January 1, 2025, prices for most types of road toll vignettes will increase:
- 365-day vignette: from €60 to €90
- 30-day vignette: from €17 to €17.10
- One-day vignette: from €5.40 to €8.10
- 10-day vignette: price reduced from €12 to €10.80
Introduction of a Financial Transaction Tax
From April 1, 2025, a financial transaction tax will be introduced for legal entities and entrepreneurs:
- 0.4% of the transfer amount, with a maximum tax of €40 per transaction
- 0.8% tax on cash withdrawals, with no maximum limit
- Card payments are exempt from the tax, but an annual fixed fee of €2 will be introduced for using a payment card.
Initially, a requirement was proposed for all businesses registered with the e-Kasa system to offer cashless payment options (POS terminals, QR codes, invoice payments). However, this provision was ultimately removed, though the Finance and Budget Committee has stated that the matter will be reviewed later.
By the end of March 2025, entrepreneurs will also be required to open a transaction account for conducting business-related financial transactions. This effectively mandates opening a business bank account, as previously, personal accounts could be used for business transactions.
The first tax period for collecting the financial transaction tax will be April 2025. This tax is unique in the Eurozone, with similar taxes existing only in Hungary and some developing Latin American countries.
Use of Foreign Accounts
Using foreign bank accounts, including virtual accounts (e.g., Wise, Revolut), does not exempt entrepreneurs from paying the financial transaction tax. When using Slovak bank accounts, the tax is automatically calculated and withheld by the bank. However, for foreign accounts, entrepreneurs (or their accountants) must manually calculate the tax and submit a monthly report.
Exemption for Transfers Between Personal and Business Accounts
If an entrepreneur holds both a business and personal account in the same bank, transfers between these accounts will not be subject to the financial transaction tax.
Increase in Corporate Tax for Large Companies
From January 1, 2025, companies with taxable income exceeding €5 million will see their corporate income tax rate rise to 24%.
Increase in the Maximum Social Contribution Base
From January 1, 2025, the maximum monthly base for social contributions will increase from 7 times to 11 times the average monthly salary in Slovakia over the two years preceding the tax year.
Changes in Value-Added Tax (VAT)
- Standard VAT rate: Increased from 20% to 23% as of January 1, 2025.
- Reduced VAT rates: Two new reduced rates introduced:
- 19%: Applies to certain food products, electricity, and non-alcoholic beverages served in restaurants.
- 5%: Applies to basic food items (meat, milk, cheese, etc.), medicines, medical devices, public catering, hotel services, printed and electronic books, periodicals, fitness center services, and sports event organization services.
Changes in the Child Tax Bonus
- Age restrictions: From January 1, 2025, the child tax bonus will only be available for children under 18.
- Bonus amount:
- €100 per month for children under 15
- €50 per month for children aged 15-18
- Income limits:
- For taxpayers with annual incomes above €25,740 (~€2,478 per month), the bonus will gradually decrease.
- For taxpayers earning more than €3,632 per month, the bonus will be completely eliminated.
We hope this article has provided valuable insights into the key tax changes in Slovakia for 2025. Stay tuned for further updates and detailed analyses on these topics.
