Overview of adopted changes in the Income Tax Act and the VAT Act from 1 January 2024

VAT changes adopted

On 19 December 2023, the National Council of the Slovak Republic approved an amendment to the Value Added Tax Act (Act No. 315/2023 Coll.), in order to improve the state of public finances. Below are the main changes:

Changes effective from 1 January 2024:

• The reduced VAT rate of 10% will no longer apply to the serving of alcoholic beverages in the context of the provision of restaurant and catering services.

Changes effective from 1 March 2024 in connection with the amendment to the Act on Transformations of Business Companies:

• tax registration obligation of a domestic person – successor company in the event of a company division by spin-off or cross-border spin-off;
• registration obligation of a foreign person in the event of a dissolution without liquidation, a company division by spin-off or cross-border spin-off;
• specifying and supplementing the rules on the sale of a business;
• specification of the notification obligation for a taxpayer, that has been divided by spin-off or cross-border spin-off, on the VAT relating to the adjustment of the tax deducted on the transfer of investment assets;
• tax liability in the last tax period on the termination of the taxpayer without liquidation.

Income tax changes adopted

In previous issues of our Newsletter we had informed you about the changes in the Income Tax Act adopted in June 2023 with effect from 1 January 2024. However, on 19 December 2023, the National Council of the Slovak Republic approved an amendment to the Income Tax Act, which introduces new changes and at the same time amends the previous amendment.

Below is an overview of the new changes applicable and effective from 1 January 2024:

• increasing the threshold of taxable income for a micro-taxpayer for applying the 15% tax rate to EUR 60,000, to be applied for the first time for the 2024 tax period;
• exemption from income tax of non-cash benefits acquired by an employee or taxpayer with income from business and other self-employment in the form of employee shares and business shares;
• increasing the tax rate for dividends received by individuals from 7% to 10%;
• extending the scope of legal forms of taxpayers not established for business that can claim the income exemption from so-called charitable advertising, while increasing the exemption amount from EUR 20,000 to EUR 30,000 at the same time;
• introduction of a minimum corporate income tax, the amount of which is derived from the achieved taxable income of the taxpayer as follows:

if the taxpayer has achieved, during the tax period,

• income not exceeding EUR 50,000 – minimum tax of EUR 340,
• income exceeding EUR 50,000 and not exceeding EUR 250,000 – minimum tax of EUR 960,
• income exceeding EUR 250,000 and not exceeding EUR 500,000 – minimum tax of EUR 1,920,
• income exceeding EUR 500,000 – minimum tax of EUR 3,840.

Overview of the most significant changes in the Income Tax Act, which have been repealed by this amendment and therefore will not take effect as of 1 January 2024:

• all changes related to the taxation of cryptocurrencies (i.e. the 7% rate after the time test, the exemption for exchanging virtual currency, the non-payment of health levies, etc.) are repealed;
• tax exemption is repealed for income from unit certificates obtained by their payout (return) after 3 years from their issue date;
• tax exemption is repealed for income from the sale of securities that are not admitted to trading on a regulated market, after 3 years from their acquisition;
• tax exemption is repealed for income from the sale of a business share in case of an individual after 3 years from the acquisition of the share.