TAX AND ACCOUNTING 2020

Peter Varga, partner of our law firm Highgate Group, commented for Hospodárske noviny on the news that await entrepreneurs in the area of income tax from 2020. In general, it can be stated that business will be cosmetically cheaper in terms of taxes and levies in Slovakia next year and in 2021. This is mainly due to the reduced 15% income tax for individuals and legal entities with income/taxes up to EUR 100,000 per year, the introduction of the new micro-taxpayer institute, the flexible amortisation of tax losses, and the increase in the tax-free part of the tax base for individuals.

If we were to simplify the changes that have been adopted, they have a more significant impact on small entrepreneurs in particular. This is not only because of the 15% income tax, but also because of the effective combination of a number of other institutes that small entrepreneurs are able to make use of and thus reduce the amount of effective taxation to a minimum. In some cases, favourable case law and the practice of the tax authorities (often unintentionally) also contribute to this. For larger companies, it is the relatively flexible expensing of tax losses that seems to be most interesting from a tax perspective. On the other hand, the system is becoming more complicated and new exceptions and departures from the standards are emerging. In the area of rates alone, today’s income tax law has several times more tax rates than in 2004. This also means more work for accountants and tax experts. But a complicated tax system is not an ideal scenario for Slovakia in the long term.

We have reported more on this at our last two conferences.

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