It’s official – certain offshore companies will be subject to a 35% tax rate in Slovakia.

We previously informed you (http://bargerprekop.com/resources/potential-offshore-company-tax-increase-november-12-2013/?page=2 and http://bargerprekop.com/resources/potential-offshore-company-tax-increase-update-december-12-2013/) of the Slovak government’s intent to amend the Income Tax Act, which would increase offshore company tax (Amendment). The Amendment has been approved by the parliament, signed by the President and became effective on March 1, 2014.

States that are not subject to the offshore company tax are listed here: https://www.finance.gov.sk/en/Components/CategoryDocuments/s_LoadDocument.aspx?categoryId=285&documentId=454. States that are not listed are considered offshore countries. The offshore company tax applies to revenues generated in Slovakia by companies with a registered office in an offshore country. Such revenues include:

  • payments for delivery of goods or provision of services rendered by an offshore company’s permanent establishment (operations) in Slovakia;
  • payments for services provided by an offshore company to a Slovak tax resident or a non-resident with a permanent establishment in Slovakia, irrespective of where the services were carried out;
  • payments for the sale or lease of real estate owned by an offshore company and located in Slovakia; or
  • payments for transfers of shares in a Slovak company, even if the seller of shares is not a Slovak tax resident.