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Slovakia: Tax loss amortization, hybrid mismatch, R&D deduction, other changes

Slovakia: Tax loss amortization, hybrid mismatch

Amendments to the income tax law, approved by Parliament in September 2019, aim to support small and medium-sized enterprises and the automotive industry; simplify tax calculations; reduce administrative burden; and implement the EU directive for the prevention of tax avoidance with regard to hybrid mismatches (ATAD 2).


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There are amendments concerning:

  • Tax loss amortization—the period for amortization of tax loss extended from four tax periods to five tax periods
  • Cash basis items—in an effort to reduce the administrative burden for taxpayers, modified provisions concerning items subject to the payment condition
  • Hybrid mismatches—pursuant to the EU directive, rules to prevent tax benefits stemming from hybrid transactions (due to different tax treatments of financial instruments and/or taxpayers among jurisdictions)
  • “Super-deduction” for research and development (R&D) costs—increased tax benefits of 200% (instead of 100%) deduction for costs of certain R&D projects
  • Increased limit for tax prepayments—limit increased to €5,000 (up from €2,500)
  • Taxation of “micro-taxpayers”—to support “small enterprises” (individuals or legal entities with income not exceeding €49,790)
  • Reduced tax rate—effective 1 January 2020, a 15% income tax rate for individuals and legal entities with income not exceeding €100,000
  • Increased personal tax allowance for individuals—effective 2020, personal tax allowance increased to 21 times (up from 19.2 times) the subsistence minimum amount

Read a 2019 report prepared by the KPMG member firm in Slovakia

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