The Top-up Tax Act has been approved
In the third edition of the Newsletter in 2023, we had informed you regarding the government’s draft Act relating to the introduction of the top-up tax at the level of 15% to ensure a minimum level of taxation for multinational enterprise groups and domestic groups (hereinafter referred to as the “Act”). On 8 December 2023, the draft Act was approved by the Members of the National Council of the Slovak Republic and the approved version of the Act took effect on 31 December 2023.
In this edition of the Newsletter, we would like to draw your attention to some additional information and to the changes that were approved by the National Council of the Slovak Republic compared to the previous version, which we had reported on in the third edition of our Newsletter.
The taxpayer is obliged to electronically submit a notification with information for the determination of the top-up tax (hereinafter referred to as the “Notification”) as well as the tax return no later than 15 months (originally 13 months) after the end of the relevant tax period, and the top-up tax is due within the same time limit. During the transitional period, i.e. the first accounting period in which the group is in the scope of application of the Top-up Tax Act, the time limit shall be extended by three calendar months, i.e. to 18 months.
The taxpayer is not required to file the Notification if the mandatory information has already been filed by the ultimate parent entity or a designated entity located in a state with which the Slovak Republic has an effective qualified agreement of competent authorities. In this case, the taxpayer is only obliged to electronically report, within the time limit for filing the Notification, the identifying data of the ultimate parent entity or a designated filing entity, and the state in which it is located.
If the ultimate parent entity is located in the Slovak Republic, it is obliged to entrust a designated filing entity in another EU Member State or in a state with which the Slovak Republic has a qualified agreement of competent authorities effective during the notification period, and to provide it with the information necessary to calculate the top-up tax. In this case, the ultimate parent entity is obliged to electronically report to the tax administrator, within the time limit for filing the Notification, the identification data of the designated filing entity, and the state in which it is located.
According to the explanatory memorandum to the approved version of the Act, the Act applies to accounting periods beginning from 31 December 2023, i.e. the first period analysed will be the accounting period beginning after 31 December 2023, i.e. calendar year 2024.
