Act on the Pan-European Personal Pension Product

The National Council of the Slovak Republic approved the Act on the Pan-European Personal Pension Product, which also amends the Income Tax Act as of 1 January 2023. The aim of this legislation is to further promote voluntary retirement savings and thus to ensure income for individuals / savers after reaching retirement age or after becoming entitled to receive an old-age or early retirement pension.

The out-payments to be received by savers in accordance with the conditions set out in the Pan-European Personal Pension Product Act will constitute their taxable income from capital assets. This will ensure the same tax treatment as is currently applicable to the supplementary pension savings, a similar product in terms of purpose (the tax base will be calculated as the difference between out-payments received and the contributions paid). Out-payments from the Pan-European Personal Pension Product will not represent tax exempt income of savers.

Similarly as in case of the supplementary pension savings, savers under the Pan-European Personal Pension Product will also be able to deduct a tax allowance from their tax base up to an aggregate amount of EUR 180 per year (in the event that the saver has concluded into several contracts relating to supplementary pension savings or the Pan-European Personal Pension Product).