A Highly Competitive Tax Regime
The progressive business-friendly tax regime has been in effect since January 2004. The new government has so far made only minor amendments by reducing the comprehensive flat rate of 19% to 10% for VAT on pharmaceuticals and medical products and tax allowances have been gradually decreased to zero for those with an annual income above EUR 19.920 (SKK 600,000).
Further changes in 2009 have been the introduction of VAT grouping and new documentary requirements for transfer pricing purposes, especially between foreign parent and domestic subsidiaries. The re-introduction of thin capitalization rules on related party financing (such rules were abolished under the previous government) while considered by the current government were then abandoned so there still remains no formal thin cap restrictions in Slovakia.
17.48 – 21.68%
853 – 887
Average monthly gross salary in 2008 (EUR)
Source: SARIO (Slovak Investment and Trade Development Agency)
Low Labour Cost
Although productivity rates are similar, labour in Slovakia is 15.8% cheaper than in the Czech Republic, Hungary and Poland (its immediate neighbours) and six times lower than much of Western Europe.
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