The new year will also bring a new tax on financial transactions

As part of the consolidation package, the National Council of the Slovak Republic (SR) also approved a new law on the financial transaction tax (hereinafter referred to as the “tax”) with effect from 1 January 2025.

The taxpayer will be any individual – entrepreneur, legal entity and organisational unit (branch office) of a foreign person, who is also a client of a payment service provider.

Individuals – entrepreneurs who do not have a transaction account for financial transactions in connection with their business are obliged to set one by 31 March 2025 and carry out these transactions through this account.

The new tax will apply to financial transactions where the amount of funds is debited from a transaction account (i.e. from the taxpayer’s business account), the use of a payment card issued to the transaction account, cash withdrawals from the transaction account, and the recharged expense related to the execution of a financial transaction that relates to the taxpayer’s activities in the SR.

The tax collector will be payment service providers (banks) and branch offices of such institutions in the territory of the SR, i. e. banks and branches of foreign banks. The tax collector will calculate the tax, collect it from the taxpayer, remit it to the tax administrator and submit to the tax administrator a notification of the amount of the tax.

Despite the fact that the new law distinguishes between taxpayer and tax collector, there are defined cases when the taxpayer becomes the tax collector at the same time, namely if:

• the taxpayer is a client of the provider, which does not have its registered office or branch office in the territory of the SR;
• the taxpayer who is recharged for costs related to the execution of a financial transaction relating to a business activity carried out in the territory of the SR;
• the taxpayer carries out financial transactions in a non-transaction account.

The amount of the tax rate depending on the subject of the tax is as follows:

• for performed financial transactions, 0.4% of the amount of the financial transaction, with a maximum tax of EUR 40 per transaction;
• for cash withdrawals from a transaction account, 0.8% on the amount withdrawn;
• EUR 2 for using a payment card at least once per calendar year;
• for recharging costs in connection with the execution of financial transactions relating to the activity in the SR, 0.4% on the amount of the recharged costs.

However, the law precisely defines exceptions, which payment transactions are not subject to tax, such as payments of taxes and social security and health insurance contributions; interbank transfers between the taxpayer’s accounts with the same provider; refunds of payments; payment operations in connection with the purchase of government bonds; postal payments; payment operations on a homeowners’ account; payment operations on a securities dealer’s account carried out by a dealer with the intention of purchasing securities on behalf of a customer, but not payment operations in connection with the purchase of securities on the securities dealer’s own behalf; payment operations carried out by a payment card, excluding cash withdrawals.

The tax period is the calendar month and, if the subject of the tax is the use of a payment card, the tax period is the year in which the payment card was used.

The first tax period will be April 2025 and the tax for the months of April, May and June 2025 can be paid until 31 July 2025 at the latest. If the tax collector collects the tax from the taxpayer for this period by 31 May 2024, the tax collector will have to pay it to the tax administrator by 30 June 2025.

At the same time, the tax collector is obliged to keep records according to relevant tax periods and to deliver them electronically at the request of the tax administrator.

Although the introduction of the new tax is expected to increase the income of the state budget of the SR by almost EUR 700 million, its introduction will, however, have a negative impact on business entities as well as on payment service providers due to the increase in financial costs and administrative burden. At the same time, however, there is a risk that this increase will be reflected in the prices of goods and services, and will therefore have a negative impact on the general population as well.