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Slovak Tax News: The 7 Economic Measures
Please note that the measures were presented only verbally, and as of today they are not transformed to legal acts yet. The measures are indicative and we expect details to follow, as many question arise (we currently do not have more information or explanations available). As soon as there is an update we keep you informed.
7 economic measures (status 30.3.2020):
The state will pay 80% of the employee’s salary, if the business is closed based on decision of the state.
The employees who stayed at home will get their salaries from the state. The condition for refund is that the employees must not be in notice period. If the conditions are met, the salaries should be paid gradually from 15/4/2020.
Contributions for the self-employed and employees in companies that have recorded a drop in revenues will depend on how much they were affected.
In April, the state will contribute:
- EUR 180 per employee for salaries in companies whose revenues dropped by more than 20%
- EUR 300 per employee for salaries in companies whose revenues dropped by more than 40%
- EUR 420 per employee for salaries in companies whose revenues dropped by more than 60%
- EUR 540 per employee for salaries in companies whose revenues dropped by more than 80%
It is important to note, that the calculation for March will be halved.
Bank guarantees in the amount of EUR 500 mil. for employers to be able to finance their business.
Ministry of Finance in cooperation with Slovak Investment Holding (SIH) prepared the bank guarantee scheme and loan donations. SIH separated EUR 38 million from EU sources, which will constitute a guarantee for loans provided to clients by contracted commercial banks. The aid in the form of soft loans is intended primarily for self-employed, small and medium companies. These loans will be granted up to EUR 1,2 million. Banks under this scheme will lend more than EUR 80 million. The loans should be a 4-year loans, with a 12-month deferral of principal and interest payments. The interest rate subsidy will be up to 4%, which means that the interest will be borne by SIH and the client can access a low-interest or interest free loan if the employment is maintained. These resources should be used by the company for investment and operating costs in order to maintain employment. Banks can apply for cooperation and document compliance with the criteria during April 2020.
Employees in quarantine and parents who are at home with their kids will get 55% of their gross salary from the state.
The payment of payroll tax will be delayed for the companies whose revenues drop by more than 40% (in March 20%).
The deadline for paying income tax advance payments for the companies with a revenue drop of more than 40 percent will be postponed (in March 20% unclear).
Entrepreneurs will start paying the advance payments as of October 2020 (unclear).
The measure starts to apply from April 2020. The company must compare the sales (turnover, income) of the respective month (for example April 2020) with the sales of the same month of the previous year (in this example April 2019). In case of the sales drop higher than 40%, the company shall notify electronically the Tax Office electronically in the form of the affidavit. The comparison of sales should be done by the taxpayer himself. This notification must be submitted to the Tax Office every month / quarter during the emergency situation, if the company wants to postpone the advance payments due dates. The company will be obliged to settle unpaid advance payments in the CIT return for 2020, ie by March 2021. This measure applies to all entrepreneurs, ie small companies, self-employed and also corporations. Those companies which sales did not drop by more than 40%, can use the CIT law provision and request for advances payments to be paid otherwise (if the conditions are met).
Companies will be able to include unutilised tax loss since 2014 (including) in its tax base, if they haven´t utilised it so far.
This measure applies to entrepreneurs who submit the CIT return for 2019 in the period from 1/1/2020 to 31/12/2020. It means, that even the company who has already submitted the CIT return for 2019 in January, February or March can amortize this tax loss through the institute of an additional CIT return. The company can only utilise the part of the tax losses that could not be utilised in the past due to the amount of the tax base of the previous years.
Any doubts? office [at] fal-con.eu (subject: SK%207%20Economic%20Corona%20Mesures, body: Dear%20FALCON%20Team%2C%0A%0Acould%20you%20pls%20contact%20me%20at%3A) (pls drop us a line)!