COVID-19: New Tax Measures

The measures under this Act apply from 12 March 2020 until the end of the calendar month in which the Government cancels the emergency situation (hereinafter the “Pandemic Period”) and the expiry of the longest period under this Act.

The measures under this Act apply from 12 March 2020 until the end of the calendar month in which the Government cancels the emergency situation (hereinafter the “Pandemic Period”) and the expiry of the longest period under this Act. An amendment approved by Parliament on 22 September 2020 sets the end of the Pandemic Period for the most deadlines in this Act at 30 September 2020. The deadline for filing income tax returns and tax settlements is hereby set at 2 November 2020. 

For the purpose of not updating informative lists of the Financial Directorate of the Slovak Republic and provision of grants on the basis of the last update of the register of arrears before the Pandemic Period, the end of the Pandemic Period is set at 31 December 2020.

The signature of the president of the Slovak Republic is still required for this law to enter into force.

The Act contains several tax and related measures to mitigate the effects of COVID-19. The measures concern the following areas:

CHANGES APPROVED BY THE AMENDMENT AS AT 9 JULY 2020

• Waiver of the taxpayer´s obligation to settle tax arrears on corporate income tax prepayments due from the start of the taxation period until the end of the month following the month in which the deadline for filing the corporate income tax return expires, for the period of:
  • The calendar year beginning on 1 January 2020;
  • The taxation period in which the change of the taxation period from the calendar year to fiscal year occurred, beginning after 1 January 2020;
  • The fiscal year whose deadline for filing a corporate income tax return expires during the pandemic or a fiscal year for which at least one month falls between 1 January 2020 and 31 December 2020.
    
• Preferential deduction of an unclaimed tax loss for taxation periods which ended in 2015 to 2018 approved by the amendment dated 22 April 2020 is only possible in one taxation period, even if in 2020 the deadline for filing a corporate income tax return expires for more taxation periods.
  
• Postponement regarding automatic exchange of information:
  • Postponement of the deadline to submit information about financial accounts (FATCA and DAC2/CRS) obtained in 2020 until 31 December 2020.
  • Postponement of deadlines to report cross-border arrangements (implementation of DAC6 Directive): for obliged/liable persons until 31 January 2021, for intermediaries as regards regular reporting of marketable arrangements until 30 April 2021 and for the reporting of the competent Slovak authorities to the competent EU authorities of arrangements reported to the Slovak  authorities in the first quarter of 2021 until 30 April 2021.
  • Postponement of the obligation to report cross-border arrangements, whose first implementation step took place between 25 June 2018 and 30 June 2020, until 28 February 2021 instead of the original deadline of 31 August 2020.
• No payment of the special levy on selected financial institutions (the “bank levy”) from the instalment due after the effectiveness of this act until the end of 2020.
  

CHANGES APPROVED BY THE AMENDMENT AS AT 22 APRIL 2020

• Deduction of an unclaimed tax loss for taxation periods ended in 2015 to 2018 up to a total of EUR 1 000 000 from the tax base for a taxation period whose filing deadline falls between 1 January 2020 and 31 December 2020. The above may also be claimed for a financial year ending no earlier than 31 October 2019. 
• No payment of income tax prepayments from May 2020, which are due during the Pandemic Period for the period immediately following a period in which the taxable person’s revenues decreased by at least 40% compared to the same period of the previous calendar year based on the submission of a declaration no later than 15 days before an income tax prepayment becomes payable. However, taxable persons may request to pay prepayments differently. 
• Refund of tax overpayment to taxable persons who have filed an income tax return:
  • By the end of March 2020: within 40 days of 31 March 2020;
  • During the Pandemic Period: within 40 days of the end of the month in which the tax return was filed.
    
• If a taxable person declares in their income tax return a higher tax overpayment than the overpayment that should have been declared in the tax return, the tax authority will impose a penalty amounting to 100% of the difference. 
  
• The amendment cancels non-assessment of default interest for non-payment of a tax prepayment, withholding tax or a withheld collateral tax (default interest is applied if the payment is late). 
  
• Customs arrears or insurance contribution arrears are not taken into account for an earlier excess VAT refund if these arrears are paid by the end of the month following the Pandemic Period.
  
• No disclosure in the list of VAT payers with reasons for VAT deregistration due to a repeated failure to file a VAT return or a VAT Transactions Statement if the VAT payer meets these obligations by the end of the month following the Pandemic Period.
• Postponement of collection of arrears in customs enforcement proceedings during the Pandemic Period. 
• No liability for a selected customs misdemeanour or offence if non-compliance is solely due to the negative consequences of the pandemic.
• Postponement of notification obligations and maturity of a penalty imposed on the spot in connection with the use of a cash register until the end of the month following the end of the Pandemic Period.
• From April 2020, there is no obligation to pay motor vehicle tax prepayments due during the Pandemic Period.
• Postponed deadline for filing a local tax return and meeting notification obligations, the filing deadlines for which expire during the Pandemic Period, until the end of the month following the Pandemic Period.

The amendment also supplemented and clarified some measures adopted on 2 April 2020. Changes are shown in italics. 

CHANGES APPROVED BY ADOPTION OF THE ACT ON 2 APRIL 2020

Approved changes to tax deadlines during the Pandemic Period

Other approved measures 

• Postponement of the deadline for filing an income tax return and paying tax for the taxation period whose last day of the period for filing the income tax return falls during the Pandemic Period until the end of the calendar month following the end of the Pandemic Period. Release from liability for a breach of the obligation to file an additional income tax return and pay tax by a deadline that falls during the Pandemic Period if the tax entity meets this obligation by the end of the calendar month following the end of the Pandemic Period. In the event of an increase in income tax, the penalty amount will be calculated up to the start date of the Pandemic Period (12 March 2020).
• Postponement of the deadline until the end of the second month following the end of the Pandemic Period for:
  • Filing a declaration on an assignment of a portion of income tax paid by a taxable person not filing a tax return. Employers are required to issue a tax payment confirmation for this purpose upon an employee’s request by the 15th day of the second calendar month following the end of the Pandemic Period. Any recipient of the portion of paid tax may also use the portion of paid tax to mitigate the negative consequences of the pandemic (the amendment extended the deadline for using a portion of paid tax by the beneficiaries until the end of 2021);
  • Filing of a report on tax reconciliation and aggregate income from dependent activities. Income tax is also due by this deadline.
• Postponement of the deadline until the end of the month following the end of the Pandemic Period for:
  • Annual tax reconciliation. Employers must deliver to employees a document on the annual reconciliation performed by the end of the second calendar month after the end of the pandemic and refund a tax overpayment, pay an employee bonus, tax bonus and tax bonus for paid interest when paying out salary for the second calendar month after the end of the pandemic.
  • Filing a notice of withholding and paying income tax by a healthcare provider.
  • Filing of a motor vehicle tax return and payment of tax.
• During the Pandemic Period, the period for the extinction of the right to assess tax and statute-barring/extinction of the right to recover tax arrears is interrupted.
• Waiver of a missed deadline if the tax entity performs the missed act by the end of the calendar month following the end of the Pandemic Period (not applicable to filing a tax return and paying tax). The amendment added that the waiver of missed deadlines does not apply to the filing of a VAT Transactions Statement or an EC Sales List, or to the payment of tax prepayments.
• Postponement of deadlines under Act No. 431/2002 Coll. on Accounting, as amended, during the Pandemic Period until the end of the third calendar month following the end of the Pandemic Period, or until the expiry of the period for filing the tax return (under the first indent), whichever is earlier. 

Other approved measures

• An outstanding amount of tax due during the Pandemic Period that the tax entity pays by the end of the calendar month following the end of the Pandemic Period will not be considered as tax arrears. The amendment clarified that if the tax entity does not pay the tax in time, they will be charged default interest.
• Option to interrupt a tax audit and tax proceedings at the request of the tax entity. Postponement of tax enforcement proceedings during the Pandemic Period.
• During the Pandemic period, no administrative fee will be charged for acts and proceedings of administrative authorities that are necessary to mitigate the negative consequences of the pandemic. 
• Exemption from import duties and VAT on imports of medical supplies from third countries by selected organisations approved by the Ministry of Interior of the Slovak Republic.
• During the Pandemic Period, the following lists will not be updated: the list of tax debtors, the list of VAT payers with reasons for VAT deregistration and the list of deleted VAT payers.
• During the Pandemic Period, grants may be provided according to the latest update of the list of tax and customs debtors prior to the Pandemic Period.
• Alignment of the delivery of documents to an addressee in person with post office rules.
• Social and health insurance contributions for March 2020 to be paid by employers and self-employed persons as follows:  
  • Health insurance contributions are due by 31 July 2020; 
  • Social insurance contributions are due by 31 December 2020;

If these persons record at least a 40% decrease in net turnover or income from business activities and other self-employment activities.

Social Insurance Contributions for April 2020

An employer or a self-employed person with mandatory sickness and pension insurance is not required to pay insurance contributions to the Social Insurance Agency for April 2020 if their establishment was closed due to a decision of the competent authority (Public Health Office of the Slovak Republic) for at least 15 days.

An employer or a self-employed person with mandatory sickness and pension insurance must document the closure of their establishment by an affidavit submitted to the Social Insurance Agency by the 8th day of the calendar month following the calendar month for which they are not required to pay insurance contributions.

With respect to the crisis situation, the Government may issue a Government regulation to stipulate a different period for which the above persons are not required to pay insurance contributions, the conditions under which they are not required to pay insurance contributions and the manner of documenting their fulfilment.

Social security contributions for May, June and July 2020

The due date of employers’ and self-employed persons’ social insurance contributions for May, June and July 2020 is postponed to 31 December 2020 if these persons suffered a drop in net turnover or income from business and other self-employment activity by 40% or more.

The due date of health insurance contributions, and the due date of employee social insurance contributions remitted to the Social Insurance Company by the employer on the employee’s behalf remains unchanged.

The method for determining a decrease in net turnover must be stated in the electronic or paper version of the form for documenting the decrease in net turnover for the postponement of social insurance contributions for May / June / July 2020 and immediately sent electronically or in writing to the Social Insurance Company.

Date: Spetember 23, 2020