Taxes in Slovakia – changes to the tax system in 2025 – what is worth knowing?
The year 2025 brings significant tax reforms in Slovakia that will impact both businesses and individuals. In this article, we outline the key changes in income tax, VAT, and other levies while explaining why partnering with Thompson&Stein can help you navigate these updates effectively.
Our lawyers will be happy to answer your questions about the tax system in Slovakia.
Income tax in Slovakia - new rates and rules
One of the most notable changes is the introduction of new income tax rates based on annual turnover for businesses and individuals:
- Businesses and individuals with a turnover of up to EUR 100,000 will pay a reduced tax rate of 10% (previously 15% for turnovers up to EUR 60,000).
- Companies with a turnover exceeding EUR 5,000,000 will face an increased rate of 24% (up from 21%).
- Dividends for 2025 profits will be taxed at a lower rate of 7% (previously 10% in 2024).
A minimum income tax for legal entities has also been introduced, calculated based on turnover. For example, companies with a turnover exceeding EUR 500,000 will pay a minimum tax of EUR 3,840. This tax can be treated as an advance payment for the next three years, providing financial flexibility.
Practical example of income tax in Slovakia
A company with an annual turnover of EUR 80,000 in 2025 will pay income tax of EUR 8,000 (10%). However, if its turnover rises to EUR 120,000, it will be taxed at the 21% rate, amounting to EUR 25,200. Meanwhile, a company with a turnover of EUR 5,500,000 will pay 24%, or EUR 1,320,000 in taxes.
Analysis of benefits and risks after income tax changes in Slovakia
Reducing the tax rate for smaller businesses (turnover up to EUR 100,000) from 15% to 10% may encourage the registration of new enterprises. Conversely, increasing rates for large companies to 24% could raise operational costs, particularly in low-margin sectors.
VAT Slovakia - higher rates and simplification
From 2025, VAT rates in Slovakia will also change:
- Standard VAT rate will increase from 20% to 23%.
- Reduced rates (e.g., for basic foodstuffs, books, and restaurant services) will decrease from 10% to 5%.
The new rules also introduce a reverse-charge system for VAT on imports for approved businesses. This change eliminates the need for immediate VAT payment at customs, improving cash flow management for companies.
A practical example of VAT in Slovakia
A company importing electronic goods worth EUR 100,000 previously had to pay EUR 20,000 in VAT immediately at customs. From 2025, approved economic operators can defer this payment and report VAT in their tax returns, easing budgetary pressures.
Analysis of benefits and risks after VAT changes in Slovakia
Lower VAT rates on essential goods and services may encourage consumer spending. However, the increased standard VAT rate could raise costs in sectors such as energy and construction, potentially leading to higher prices for end customers.
Financial transaction tax in Slovakia
A new financial transaction tax will be introduced in 2025. It will amount to 0.4% of the value of funds withdrawn, capped at EUR 40 per transaction. However, cash withdrawals will be taxed at 0.8%, with no upper limit.
Practical example of a financial transaction tax in Slovakia
A company transferring EUR 10,000 will pay EUR 40 (0.4%) in transaction tax. By contrast, withdrawing the same amount in cash would incur a cost of EUR 80 (0.8%).
Analysis of benefits and risks after changes in financial transaction taxes in Slovakia
The transaction tax incentivizes electronic payments, promoting transparency in economic transactions. However, the higher tax rate on cash withdrawals could negatively affect businesses that rely heavily on cash transactions.
Why Choose Thompson&Stein?
The new tax regulations in Slovakia introduce numerous changes that may seem complex. At Thompson&Stein, we offer comprehensive services, including:
- Tax and legal advisory,
- VAT registration assistance,
- Support in managing cash flow under the new regulations,
- Tax optimization in compliance with current laws.
We assist both large enterprises and small businesses in critical areas such as accounting in Slovakia and tax consultancy. If you are wondering, “Should I register a company in Slovakia in 2025?” we can help you evaluate all pros and cons and find the best solution for your business.
New Tax Rules in Slovakia
The year 2025 marks a significant shift in Slovakia’s tax system. Preparing for these changes now and securing professional support can make a crucial difference. Contact us to learn how we can help your business.
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