Parliament approved consolidation package

Compared to the original proposal, about which we informed you here, there were several changes adopted. The approved amendments to the laws will thus bring the following measures in the tax area:

1. Taxation of high-income groups

• introduction of a special levy for refineries;
• increase in the special levy for mobile operators;
• increase in the corporate income tax rate from current 21 % to 24 % for taxpayers whose taxable income exceeds EUR 5 mil – this measure will apply for the first time for tax returns filed for the tax period beginning on 1 January 2025 at the earliest;
• increase of maximal assessment bases for social contributions of employees from current 7-times to 11-times of the average monthly wage as of 1 January 2025;

2. VAT

• increase in standard VAT rate from 20 % to 23 %;
• change in reduced VAT rates from original 5 and 10 % to 5 and 19 %;
• changes in goods and services to which reduced VAT rates will apply;
• these changes will apply as of 1 January 2025;

 3. Amount and calculation of tax bonus

• changes in the amount of tax bonus for a dependent child, which will also decrease with increasing income and after reaching a monthly income of EUR 3,632, the right to a tax bonus will be zero;
• decrease of maximum amount of tax bonus from EUR 140 to EUR 100;
• these changes will apply as of January 2025;

4. Taxation of small businesses and self-employed individuals

• reduction of corporate income tax rate from 15 % to 10 % for those taxpayers whose taxable income does not exceed EUR 100,000, while the reduced rate will be applied for the first time for tax returns filed for the tax period beginning on 1 January 2025 at the earliest;
• increase of threshold of taxable income for application of 15 % personal income tax rate to EUR 100,000 – this measure will apply for the first time for tax returns filed for the tax period beginning on 1 January 2025 at the earliest;
• reduction of withholding tax on dividends from current 10 % to 7 %, whereby the reduced rate will be applied for the first time to dividends paid out of profits reported for the tax period beginning on 1 January 2025 at the earliest;

5. Assignation of tax

• introduction of the option to assign, in addition to 2 % of tax to the non-profit sector, also an additional 2 + 2 % of tax to parents as compensation for the currently paid parental pension;
• assignation of tax to parents will be possible for the first time for the tax period of 2025;

6. Tax on financial transactions

• introduction of a tax on transactions carried out by taxpayers - individuals – entrepreneurs, legal entities or Slovak branches of foreign entities - from 1 April 2025;
• this tax will in general apply i. a. to financial transactions leading to debit of sums of funds from the taxpayer's bank account, and the use of a payment card to carry out a financial transaction;
• tax rate will be 0.4 %, a maximum of EUR 40 per transaction, except for cash withdrawals in a bank or from an ATM, which will be subject to a tax rate of 0.8 %, and the use of payment cards, which will be subject to an annual tax of EUR 2;
• the payers of the tax will be banks providing transfers of funds and, in specific cases, the taxpayers themselves, on a monthly basis (with the exception of the first quarter);
• this tax will not apply i. a. to tax and social security contributions payments, payments between the taxpayer's own accounts in the same bank, payments at the post office;
• Social Insurance Agency and the public sector (e. g. municipalities) will not pay this tax;
• an obligation to keep a business account will be introduced.

We will keep you informed about the next steps in the legislative process.