Following the OECD initiative known as Pillar II and Council Directive (EU) 2022/2023, Act No. 507/2023 Coll. as amended on the Top-up Tax (“TT) to ensure a minimum level of taxation of multinational groups of companies and large domestic groups was introduced in the Slovak Republic with effect from December 31, 2023. The first relevant taxation period in Slovakia is 2024 (in case of financial year, period starting in 2024).
The Act applies to:
entities of a consolidated group of companies, so-called “basic entities” (legal entity, other entity that keeps individual accounting records, permanent establishment, etc.) located in the Slovak Republic that are members of a multinational group of companies or a large domestic group with consolidated annual revenues of at least EUR 750 millionachieved in at least two of the four accounting periods preceding the analysed accounting period,
joint ventures and entities affiliated with a joint venture according to Article 26 TT.
NOTE: for the analysed period of 2024, the fulfilment of this condition is assessed in 2020, 2021, 2022 and 2023.
The minimum effective tax rate (“ETR”) is set at 15%, i.e. the top-up tax is calculated if the ETR is lower than 15%.
The calculation of ETR and top-up tax itself is very complex, it is necessary to assess data from the corporate income tax calculation, conditions for applying exemptions, etc.
Reporting obligations
Please note that all entities that are part of a large multinational group or a large domestic group fulfilling the criteria of consolidated annual revenues will have reporting obligations (tax return and notification) in the Slovak Republic, even if the calculated ETR is higher than 15%.
In general, the deadline for filing the notification and the tax return is 15 months after the end of the reporting period. However, in the transitional year of 2024 a deadline of 18 months applies. Therefore, for the calendar year 2024, the notification and the tax return must be filed by the end of June 2026.
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If you are interested in assessing whether your company has any obligations arising from the top-up tax,
do not hesitate to contact us at office.bratislava(at)fal-con.eu.