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Tax Seminar 2012:Slovakia, new fiscal reform
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Bart Waterloos
Changes in the Income Tax (Individuals and legal
entities)
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Taxation of individuals: Overview Determining the tax base Different types of income Technical issues
Taxation of Corporates R S s
Questions and Answers
About VGD-AVOS
Table of contents
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Subject to personal income tax are the following types of income:
Employment income Entrepreneurial and rental income Investment income Other income
Tax statement is due by 31 March, but the deadline can be extended with 3 to 6 months by sending an announcement to the tax office.
Flat tax of 19% remained unchanged
Taxation of individuals
Overview
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The tax free amount :
Is calculated as 19,2 times the life-minimum valid per 1st of January of the year (19,2 x 189,83 € = 3.644,74 €)
Compared to 3.559,30 € for the year 2011
Tax payer can claim the entire tax free amount only if the yearly taxable base is less than 100 times the life-minimum (i.e. less than 18.983 €; compared to 18.538 € for the year 2011
Usually managers and expats are above this limit and can thus not enjoy the tax free amount at all (yearly taxable base is above 33.561,94 €, or 2.797 € monthly)
Taxation of individuals
Determining the Tax Base
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Tax free amount (allowance) limited to ‘active income’, i.e.:
Employment income
Entrepreneurial or other income from self-employment
No longer applicable on “passive” income - e.g. rental income
Taxation of individuals
Determining the Tax Base
Tax loss reported in the tax period ending after 31 December 2011 can only be utilized on entrepreneurial income, however cannot be utilized on rental income
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Taxation of individuals
Types of income: employment income
Consists of:
Gross salary
Bonuses
Fringe benefits
No changes in 2012
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Taxation of individuals
Types of income: entrepreneurial income
Taxable income:
Income from small business
Independent profit-making activities (self-employed)
Rent of real estate
Lump-sum expenses of 40% can be claimed, or proof real expenses
Tax-free amount of 500 € for rental income
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Taxation of individuals
Types of income: investment income
Taxable income:
Interests
Winnings
Yields from additional pension and life insurance
Mostly there is a withholding tax, whereby this withholding tax is now considered final in many occasions
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Taxation of individuals
Types of income: other income
Taxable income:
Income from occasional activity
Income from the sale of real estate
Transfer of securities, options, shares
Monetary and non-monetary income provided to health care provider or its employee/medical staff by explicitly selected persons, no expenses can be applied
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Taxation of individuals
Technical issue: allocation of tax to NGO’s
For individuals:
2% still available to donate
Unlike legal entities, no conditions and no gifts
Another 1% (3% in total) can be assigned by those volunteers who worked for any NGO’s for free for 40 working hours a year – applicable on tax period of 2012
Should the conditions be not met, penalty of 1% applies
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Taxation of individuals
Technical issue: payment of taxes
New personal account numbers
Taxes are to be paid to new bank accounts
Individual marks on the tax return whether he/she received his personal number
If no personal number was provided until the end of March, income tax is due within 8 days after its receipt from tax authorities
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Health insurance
Dividends
Dividends are subject to contributions
10% contribution is due by the individual receiving the profit shares
on the amount exceeding the monthly minimum calculation base
Applicable on profits generated for accounting periods starting after 1 January 2011
Includes also the liquidation balance
No obligation for company paying out the dividends
Combine with overall maximum annual calculation base
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Social insurance
Periodicity of remuneration
No longer linked to the type of contract :
Employment contract vs. Mandate contract
But depending now on the intended periodicity of the remuneration:
Regular vs. non-regular income
Law indicates only: non-regular income is paid out on another than a monthly basis
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Social insurance
Other issues
Even though there is no annual reconciliation,
Premium calculation for non-regular income will require allocation over earlier months when this non-regular income was not paid out
So e.g. Executive bonus paid out in August of 8.000 € will be subject to premiums for 8 months, and each month will be below the maximum calculation base
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Social and health insurance
Overview premiums 2012
Insurance Maximum calculation base
% employee % employer
Health 2.307,50 € 4% 10%
Sickness 1.153,50 € 1,4% 1,4%
Pension 3.076,00 € 4% 14%
Invalidity 3.076,00 € 3% 3%
Unemployment 3.076,00 € 1% 1%
Accident no limit - 0,8%
Guarantee fund 1.153,50 € - 0,25%
Reserve fund 3.076,00 € - 4,75%
13,4% 35,20%
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Corporates
Tax base
Follows accounting result:
Reported from double-entry bookkeeping
Reported according to IFRS
Difference between revenues and costs (non-resident w/o obligation to keep bookkeeping)
Adjustments:
Increase by tax non-deductible items or items booked in incorrect amount
Increase by amounts not included in accounting result, however subject to taxation
Decrease by items that shall not be included in tax base
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Corporates
Tax deductible and tax non-deductible items
Tax depreciation charges
Unification of way of depreciation for all kinds of assets – depreciation over the period determined in the income tax act (financial lease depreciation cancelled)
First year of depreciation - aliquot depreciation charges as per months of the assets used
Monetary and non-monetary contributions by health care providers to explicitly selected persons
Shall not be treated as tax deductible expense
Regulation of Financial Directorate published
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Corporates
Other taxes & tax incentives
Tax on emission quotes
Form of tax return launched in Financny spravodajca No 1/2012, including guideline
Tax incentives
Tax relief can be applied during 10 years (prolonged from 5)
Tax relief can be applied on tax base in the proportion of 0,8
tax reliefs applied according to previous income tax act (366/1999 Coll.) are subject to mandatory tax inspections by tax authorities
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Corporates
Other issues
Tax advance payments (TAP)
Opportunity to request for remittance of unjustifiably paid TAP
Tax non-residents may request to pay TAP in other way
Withholding tax
WHT from interests from bank accounts is considered as final tax (not advanced) already in 2011
Organizational unit
tax payer on income from dependant activities only until 30 June 2012, or eventually until 31 December 2012
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Corporates
Other issues
Payment of taxes
Personal account numbers assigned to each taxpayer
Bank account number prefix determined based on the type of tax
Different variable symbols for each periods
Financial Statements (FS)
New forms of Balance sheet and P&L account for a period ending 31 December 2011 or later
Binding form of Notes to the FS published in Financny spravodajca No 11/2011
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Corporates
Assignation of portion of the income tax paid to NGO’s
Legal entities are allowed to decide on purpose of use of its 1.5%/2% of the corporate income tax paidAssigned money are used by NGO’sAdditional 0.5% (2% in total) upon concurrent provision of financial gift of 0.5%
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Corporates
Other issues
Corporate income tax return form
Taxpayer marks whether notified or not of personal account number for payment of taxes
No need to stamp the tax return, signature is sufficient
Notification obligation to tax authorities
Payments to individuals of over EUR 5 000
Deadline by 31 March of the next calendar year
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Questions &
Answers
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The VGD group
A professional organization of auditors, accountants, payroll, tax consultants, legal and deal advisors;
30 Partners, 500+ Staff, 30 offices
Present in 10 Mid-European countries
Started in 1981, constantly growing;
Offering high quality services and integrated solutions in the Mid-European region.
Member of Nexia International
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VGD AVOS Slovakia
More than 10 years of experience in SK
Rapidly expanding and growing
Offices in Bratislava and Piestany
Focus on international clients and larger local SME’s
More than 60 staff members in accounting, tax, audit and payroll administration
Foreign languages spoken: English, Dutch, German and French
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VGD AVOS office locations
THE SLOVAK REPUBLIC
BratislavaMoskovská 13811 08 Bratislavatel: +421 2 5541 0624fax: +421 2 5541 0631 [email protected]
OTHER COUTRIES
Czech Republic Praha, Liberec, OlomoucBelgium Brussels, Beringen, Brugge, Gent, Willebroek-Blaasveld, Antwerpen, Antwerpen L.O., Kuume, Machelen, Dendermonde, ZeleBulgaria SofiaGermany Düsseldorf, Leipzig, EssenLuxembourg LuxembourgThe Netherlands Tilburg, OisterwijkHungary BudapestPoland WarszawaRussia Nizhny Novgorod
Piešťany Námestie SNP 1476/4, 921 01 Piešťanytel: +421 033 7767 321 Tel: +421 033 7743 [email protected]
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Thank you for
your attention
