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Financial Transaction Tax
With effect from 1 January 2025, Act No. 279/2024 Coll. on Financial Transaction Tax and on Amendments to Certain Acts introduced a new tax – financial transaction tax (“transaction tax”).
The financial transaction tax applies to:
- Financial transactions where funds are debited from a taxable entity’s account;
- Use of a payment card issued for a transaction account;
- Cash withdrawal; and
- Financial transactions made by a person other than a taxable entity which relate to a taxable entity’s activities in Slovakia.
Who is a taxable entity?
Taxable entities liable for this tax include legal entities and organisational units of foreign entities which meet at least one of the following conditions:
- Have a registered office or place of business in Slovakia;
- Have a payment account at a payment service provider in Slovakia;
- Perform business activities in Slovakia (this provision also applies to foreign entities not domiciled in Slovakia, regardless of whether or not they are registered for VAT pursuant to Article 5 of the VAT Act).
For natural persons, the tax will only apply to entrepreneurs who are clients of a payment service provider, including clients of foreign payment service providers.
Who is not a taxable entity?
Entities not liable for this tax are, inter alia, only those non-profit organisations established pursuant to a special regulation for the performance of activities such as the support and development of sports or research and development.
Who is a payer of the tax?
A payer of the tax, primarily the payment service provider or its organisational unit with its registered office in Slovakia, is required to calculate and pay the financial transaction tax (“transaction tax”) and file a notification on the tax amount to the tax administrator.
If the payment service provider does not have a registered office or an organisational unit in the Slovak Republic, or if the taxable entity does not make financial transactions via a transaction (business) account, or a financial transaction was made by a person other than a taxable entity, the taxable entity is the payer of the tax.
Tax Base and Tax Rate
The tax base is the amount of a financial transaction and the applicable tax rates are as follows:
- 0.4% of a financial transaction amount for each debited financial transaction, up to a maximum tax amount of EUR 40 per transaction;
- 0.8% of a cash withdrawal amount for a cash withdrawal from a business account (ATM or at the branch), with no maximum tax amount per transaction determined;
- EUR 2 p.a. for the use of a payment card regardless of how many times the card was used during the year;
- 0.4% of the full amount of a financial transaction made on behalf of a taxable entity by another person for the recharge of expenses related to the performance of financial transactions which relate to the taxable entity’s activities in Slovakia. If it is possible to identify specific liabilities of the taxable entity settled via this transaction, a maximum tax amount of EUR 40 will apply.
Exemptions from Tax Payments
Transactions not subject to the financial transaction tax include, inter alia, the following:
- Payment transactions related to the payment of tax and social security and health insurance contributions;
- Payment transactions made between the taxable entity’s accounts held with the same provider;
- Payment transactions made using a payment card, excluding cash withdrawal;
- Clearing “cash pool” transactions at the same provider associated with the automatic offset of account balances of taxable entities who are members of a consolidation group.
Taxation Period
The taxation period is a calendar month and the first taxation period will be April 2025.
The taxation period for the use of a payment card is a calendar year in which the payment card was used.
The payer of the tax is required to calculate the tax liability amount, collect the tax from the taxable entity and pay it to the tax administrator for the taxation period, and e-file a notification on the tax liability amount to the tax administrator by the end of the calendar month following the end of the taxation period.
The financial transaction tax represents a taxable entity’s tax-deductible expense.
Deloitte can assist you with the following:
- Identify which of your transactions the new tax applies to.
- Determine in which cases you qualify as a taxable entity and as a payer of the tax.
- Summarise obligations applicable to you after full implementation of the financial transaction tax.
- Quantify the impact of the financial transaction tax on your business.
- Design the implementation of appropriate changes in accordance with the new legislation based on the identified status.
- Provide assistance with preparing notifications on the tax amount.
- Communicate with the tax administrator and provide you with full support in meeting your statutory obligations.
- Simplify and automate the preparation of notifications on the financial transaction tax amount using our innovative tool.
Updated: 20 January 2025