Examples of tax deductible items:
tax depreciation costs tax residual value of depreciable assets sold obligatory social security contributions paid by an employer expenses incurred for the provision of health and social facilities for employees operational expenses of facilities used for protecting the environment taxes and fees, other than those listed as non-deductible items (see below) expenses incurred by the founder of a permanent establishment (PE) for the purpose of this PE, including management and administration expenses, regardless of the place where they were incurred, provided specific conditions in the Income Tax Act are fulfilled advertising costs, with the exception of representation and high value promotional expenses (see below). Advertising costs are costs incurred for the advertisement of the taxpayer's business activities, advertisement of goods, services, immovable property, trade name, trade mark, trade labeling of products, and other rights and liabilities related to the taxpayer's activities carried out with the intention to generate, maintain or increase his income interest paid on credits and loans specific types of reserves and provisions, e.g. reserves created for supplies and services not yet charged; reserves for the audit of financial statements and preparation of tax return; and certain bad debt provisions (subject to limitations). The rules for creation and release of reserves and provisions are regulated directly by the Income Tax Act.
Examples of tax non-deductible items: acquisition costs of fixed assets penalties and fines other than contractual (e.g. penalties/fines imposed by state or municipal authorities) accounting depreciation costs, which exceed tax depreciation costs individual and corporate income tax and taxes paid on behalf of another taxpayer expenses incurred in providing proper working, social and health care conditions for employees exceeding limits set by law expenses for business trips above the allowable limit expenses for the generation of tax-free income shortages and damages exceeding the compensation received (shortages and damages qualify in certain cases as a tax deductible expense) representation expenses (with the exception of promotional items with a purchase price not exceeding EUR 16.60 per item) losses derived from the sale of receivables.
Unrealized foreign exchange losses and gains from receivables and liabilities can be excluded from the tax base provided the appropriate decision has been made and notification filed with the respective tax authority within the time limits specified by law.
©2010 KPMG Slovensko spol. s r.o. , a Slovak limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.