Amendments to the Financial Transaction Tax (FTT) Act

March 31, 2025

Domov > Amendments to the Financial Transaction Tax (FTT) Act

At the end of last year, we brought you a detailed overview of the draft Financial Transaction Tax Bill. Since then, it has already undergone two amendments. This hectic development only confirms the quality of the legislation adopted under the abridged legislative procedure, which often leads to ambiguity and legal uncertainty.

Peter Varga discusses the issue of the adoption of this law and its impact on tax optimization in more detail in his LinkedIn status “How to avoid the financial transaction tax? .”

What specific changes did the amendments to the Financial Transaction Tax Act bring? What new obligations or potential benefits may affect your business? In this article we give you an overview of the most important changes.

First amendment to the Financial Transaction Tax Act

Only 56 days after the adoption of the original Act, the National Council of the Slovak Republic approved Amendment No. 354/2024 Z. z.[1], which brought modifications and clarifications. The aim of the amendment was to mitigate some of the negative effects of the Act and to adjust its ambiguities. The main changes include:

Extension of entities exempted from the financial transaction tax – now civil and interest associations, foundations, non-investment funds and research institutions are also exempted;
Clarification and extension of the negative definition of the subject of the tax – for example:
- payment of customs securities;
- operations of cryptoasset service providers;
- administrative and court fees;
- payment operations of public universities and health insurers;
- transactions executed from a payment account of a supervised financial market entity held with a payment service provider on which that entity (e.g. a securities dealer, payment institution, electronic money institution, cryptocurrency service provider, etc.) holds funds received from its clients, so-called client funds. The exemption does not apply to the remaining payment accounts of a supervised financial market entity, such as operating accounts, which are the property of that entity and from which it pays, for example, overhead costs;
- operations that would result in the duplication of the levy of FTT on the purchase and sale of a financial instrument admitted to trading on a trading venue in an EU or EEA Member State that already applies a similar FTT;
- the transfer of funds between unit trusts of the same owner within the same management company.
New administrative obligations – the obligation to notify the taxpayer that a person is not a taxpayer and to set up a special account for financial transactions not subject to tax is introduced (however, this has been abolished by another amendment).
Unification of the rules for calculating tax on domestic and foreign payments. If the taxpayer can demonstrably identify the recharged costs on a transaction-by-transaction basis, these transactions will be taxed at a rate of 0.4% (with a maximum tax of €40 per transaction). However, if it is not possible to prove the specific costs overcharged, the total amount of the costs will be taxed without limitation of the maximum amount of tax.

Second amendment of the Financial Transaction Tax Act

Before the financial transaction tax itself enters into force on 1 April 2025, another amendment was adopted – Act No. 26/2025 Coll.[2], which brought further adjustments:

Extension of exempted entities – the new amendment also includes schools among the exempted entities;
Clarification of tax exemptions – The amendment clarified exemptions for attorneys and public universities;
Deduction of transaction tax – taxpayers have the option to deduct the transaction tax paid by the person who recharged the costs from the recharged costs when calculating the transaction tax;
Abolition of the obligation to notify the taxpayer of a special account for selected financial transactions not subject to tax.

Are foreign persons subject to financial transaction tax?

On the question of whether foreign persons are subject to financial transaction tax (FTT), the law still does not provide a clear answer. We pointed out this legislative loophole in our October article, but even after two amendments to the law, the legislator has not properly dealt with this ambiguity.

What is the interpretation of the Financial Administration of the Slovak Republic?

The Financial Administration has published a statement according to which:

If a foreign company has a bank account in a Slovak bank, financial transactions carried out on this account that are related to the activity carried out in Slovakia are subject to FTT. The taxpayer in this case is the bank itself.
If a foreign company operates in Slovakia and has an account abroad, it becomes a taxpayer and is obliged to calculate and pay the tax.
Foreign entities that are not based in Slovakia, do not have an account here and do not carry out activities here are not subject to the FTT. However, all three conditions must be met simultaneously.

The whole issue revolves around the phrase “carries out activities in Slovakia”. However, the law does not define this term, which means that even the interpretation of the Tax Administration does not bring enough legal certainty to the situation. Until the legislator clearly defines what is considered an activity carried out in Slovakia, transaction tax for foreign entities (not only those) remains full of ambiguities.

At Highgate Group, we are intensively involved in this issue, monitoring the daily development of legislation and interpretations of state authorities in order to provide our clients with accurate and up-to-date information. Our goal is to offer effective and reliable legal tax optimization solutions that enable them to minimize risks and ensure compliance with the law.

If you are interested in this topic, please do not hesitate to contact us:

Peter Varga, e-mail: peter.varga@highgate.sk

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