{"id":251095,"date":"2026-01-22T14:18:34","date_gmt":"2026-01-22T13:18:34","guid":{"rendered":"https:\/\/highgate.sk\/what-is-a-dividend-profit-share-and-how-is-it-taxed-in-slovakia\/"},"modified":"2026-01-22T14:23:20","modified_gmt":"2026-01-22T13:23:20","slug":"what-is-a-dividend-profit-share-and-how-is-it-taxed-in-slovakia","status":"publish","type":"post","link":"https:\/\/highgate.sk\/en\/what-is-a-dividend-profit-share-and-how-is-it-taxed-in-slovakia\/","title":{"rendered":"What is a dividend (profit share) and how is it taxed in Slovakia"},"content":{"rendered":"\n<p>Dividend is a concept that entrepreneurs and investors come across very often. In practice, however, this term covers <strong>two different legal regimes<\/strong> &#8211; depending on whether the company is a <strong>joint stock company (a.s.)<\/strong> or a <strong>limited liability company (s.r.o.)<\/strong>. <\/p>\n\n<p>In this article we explain:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>what is a dividend and what is a profit share,<\/li>\n\n\n\n<li>who is entitled to it,<\/li>\n\n\n\n<li>how profit is paid out in a limited liability company,<\/li>\n\n\n\n<li>how dividends are taxed in 2024-2026,<\/li>\n\n\n\n<li>what mistakes to watch out for.<\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\">Dividend vs. profit share: what&#8217;s the difference?<\/h2>\n\n<p>Although in common parlance the term <strong>dividend<\/strong> is also used for LLCs, legally they are different institutes:<\/p>\n\n<ul class=\"wp-block-list\">\n<li><strong>A joint stock company (a.s.)<\/strong><br\/>\u2192 pays a <strong>dividend<\/strong> to shareholders.<\/li>\n\n\n\n<li><strong>Limited liability company (s.r.o.)<\/strong><br\/>\u2192 pays a <strong>share of profits<\/strong> to the shareholders.<\/li>\n<\/ul>\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p>In this article, we also use the term &#8220;dividend&#8221; for LLCs <strong>in a simplified, colloquial sense<\/strong>, with the legally correct term being a <strong>share of the profits<\/strong>.<\/p>\n\n<h2 class=\"wp-block-heading\">Who is entitled to a dividend or profit share?<\/h2>\n\n<p>The entitlement arises for a person who:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>is a <strong>shareholder (a.s.)<\/strong> or a <strong>partner (s.r.o.)<\/strong>,<\/li>\n\n\n\n<li>shall have that status <strong>on a record date<\/strong> to be determined by the General Assembly,<\/li>\n\n\n\n<li>the company has made a <strong>profit after tax<\/strong> and the general meeting has decided on its distribution.<\/li>\n<\/ul>\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p>However, making a profit <strong>does not automatically mean<\/strong> that the profit must be paid out.<\/p>\n\n<h2 class=\"wp-block-heading\">How is the payment of profit share in s.r.o.<\/h2>\n\n<p>The LLC regime is stricter than many entrepreneurs realise.<\/p>\n\n<h3 class=\"wp-block-heading\">Basic conditions of payment<\/h3>\n\n<p>A profit share can only be paid if:<\/p>\n\n<p>1. <strong>ordinary or extraordinary accounts<\/strong> have been approved,<\/p>\n\n<p>2. the company shows a <strong>profit after tax<\/strong>,<\/p>\n\n<p>3. the general meeting decides on the distribution of profits.<\/p>\n\n<h3 class=\"wp-block-heading\">Legal restrictions (key in practice)<\/h3>\n\n<p>A profit share <strong>cannot be paid<\/strong> if:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>the company would thereby cause its own <strong>bankruptcy (no proximate causation is required)<\/strong>,<\/li>\n\n\n\n<li>the equity falls below the legal limit after the payout,<\/li>\n\n\n\n<li>the company has <strong>unsettled losses from previous years<\/strong> that the law requires it to cover,<\/li>\n\n\n\n<li>it is an <strong>advance on a profit share<\/strong> (which is prohibited in an LLC).<\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\">Taxation of dividends and profit shares (overview by year)<\/h2>\n\n<p>The taxation of dividends depends <strong>on the year in which the profit is made<\/strong>, not the year of payment.<\/p>\n\n<p><strong>Profits for 2017 &#8211; 2023<\/strong><\/p>\n\n<ul class=\"wp-block-list\">\n<li>withholding tax: <strong>7%<\/strong><\/li>\n\n\n\n<li>without health levies<\/li>\n<\/ul>\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p><strong>Profit for 2024<\/strong><\/p>\n\n<ul class=\"wp-block-list\">\n<li>withholding tax: <strong>10%<\/strong><\/li>\n\n\n\n<li>without health levies<\/li>\n<\/ul>\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p><strong>Profits for 2025 and beyond<\/strong><\/p>\n\n<ul class=\"wp-block-list\">\n<li>withholding tax: <strong>7%<\/strong><\/li>\n\n\n\n<li>without health levies<\/li>\n<\/ul>\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p>The tax is withheld and paid <strong>directly<\/strong> by <strong>the company<\/strong>; the recipient of the dividend <strong>no longer includes<\/strong> it <strong>in the tax return<\/strong>.<\/p>\n\n<h2 class=\"wp-block-heading\">Legacy profits and health levies (2011-2016)<\/h2>\n\n<p>A special regime applies to dividends from earlier years:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>Dividends from <strong>2011-2016<\/strong> profits<br\/>\u2192 generally <strong>not subject to income tax<\/strong>,<br\/>\u2192 <strong>but may be subject to health levies<\/strong>.<\/li>\n<\/ul>\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p>In the past, the health levy rate has varied according to the period and the status of the insured person. Therefore, <strong>individual assessment is recommended<\/strong> for older earnings, especially if higher amounts are involved. <\/p>\n\n<h2 class=\"wp-block-heading\">Dividends from abroad and non-residents<\/h2>\n\n<p>If it is the recipient of a dividend:<\/p>\n\n<ul class=\"wp-block-list\">\n<li><strong>tax non-resident of the Slovak Republic<\/strong>, or<\/li>\n\n\n\n<li>a person from <strong>a state designated as a non-cooperative jurisdiction<\/strong>,<\/li>\n<\/ul>\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p><strong>higher withholding tax (up to 35%)<\/strong> may apply.<\/p>\n\n<p>At the same time, it is always necessary to examine:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>a double taxation treaty,<\/li>\n\n\n\n<li>the nature of income under the Slovak Income Tax Act,<\/li>\n\n\n\n<li>up-to-date lists of non-cooperative jurisdictions (subject to change).<\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\">The most common mistakes and risky practices in profit disbursement<\/h2>\n\n<p>In practice, we repeatedly encounter these mistakes:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>payment of profits without meeting the statutory tests,<\/li>\n\n\n\n<li>trying to circumvent the ban on advance payments of profit sharing,<\/li>\n\n\n\n<li>&#8220;masking&#8221; the payment of profits as a loan or other consideration,<\/li>\n\n\n\n<li>ignoring the rules on foreign structures.<\/li>\n<\/ul>\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p>Such practices can lead to:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>domeraniu data,<\/li>\n\n\n\n<li>penalties by the tax authorities,<\/li>\n\n\n\n<li>liability of the managing directors for breach of duty.<\/li>\n<\/ul>\n\n<h2 class=\"wp-block-heading\">When it is worth consulting an expert<\/h2>\n\n<p>The payment of a dividend or profit share is simple at first glance, but in reality it is a <strong>combination of commercial, tax and accounting law<\/strong>.<\/p>\n\n<p>Professional assessment is recommended especially in cases where:<\/p>\n\n<ul class=\"wp-block-list\">\n<li>these are higher amounts,<\/li>\n\n\n\n<li>you are dealing with legacy profits,<\/li>\n\n\n\n<li>you have foreign associates,<\/li>\n\n\n\n<li>you are considering optimising your ownership or holding structure.<\/li>\n<\/ul>\n\n<div style=\"height:25px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n<p><strong>To make sure your profit payout is set up correctly and securely, contact the Highgate Group team. We&#8217;ll be happy to help. <\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Dividend is a concept that entrepreneurs and investors come across very often. In practice, however, this term covers two different legal regimes &#8211; depending on whether the company is a joint stock company (a.s.) or a limited liability company (s.r.o.). In this article we explain: Dividend vs. profit share: what&#8217;s the difference? Although in common [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":251087,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[186],"tags":[],"class_list":["post-251095","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-quick-articles"],"_links":{"self":[{"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/posts\/251095","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/comments?post=251095"}],"version-history":[{"count":1,"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/posts\/251095\/revisions"}],"predecessor-version":[{"id":251097,"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/posts\/251095\/revisions\/251097"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/media\/251087"}],"wp:attachment":[{"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/media?parent=251095"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/categories?post=251095"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/highgate.sk\/en\/wp-json\/wp\/v2\/tags?post=251095"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}