Corporate Income Tax
Corporate income tax is levied on legal entities and on entities not qualifying as individuals when their seat or their place of effective management is located in Slovakia. They are then liable to pay tax on income derived from Slovak sources and also on income derived from sources abroad (the place of effective management is specified as the place where managerial and business decisions of statutory and supervisory bodies of such an entity are adopted).
Other legal entities are liable to pay Slovak corporate income tax only on income derived from Slovak sources.
Tax base and rate
Corporate income tax is computed by reference to the "tax base". The tax base is generally gross income of the entity less related expenses, modified by a number of adjusting items.
The general tax rate is 19% of the tax base.
Examples of income, not subject to tax shares in profit after tax, e.g., in the form of dividends paid to shareholders who participate on the share capital of the entity distributing dividends from profit after tax (unless the distributed profit was generated prior to 1 January 2004) dividends paid after 1 April 2004 by a Slovak subsidiary to an EU Parent Company (as well as from an EU Subsidiary to a Slovak Parent company) even if such dividends relate to profits earned before 1 January 2004; the receiving (parent) company needs to directly possess a holding of at least 25% of capital at the time of distribution income received from inheritance or donations, and payments related to liquidation surpluses and settlement amounts to which the shareholders became entitled from 1 January 2004.
Tax deductible and non-deductible expenses
As a general rule, expenses for generating, ensuring and maintaining taxable income booked in the records of the taxpayer are tax deductible, unless they are specifically listed as tax non-deductible items (see following examples). Documentation should be kept on file to support deductibility.
Certain expenses, e.g., contractual penalties, have to be paid (i.e. not only accrued) in order to qualify as tax deductible costs. Correspondingly, a taxpayer receiving such payments should tax the income in the tax period when the invoiced amount is received.