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Non-monetary benefits that are not subject to tax in Slovakia include:

the employer's share of payments on behalf of the employee to the compulsory social security system reimbursement of business travel expenses up to the statutory limit.

Salary Earned from Abroad

In general, non-residents are not subject to Slovak income tax on compensation attributable to work performed outside Slovakia. Slovak tax residents are subject to tax on non-Slovak source income unless exempt under the provision of a double tax treaty. Unilateral exemption applies to income earned by a resident from dependent activities from foreign sources, from a country with which Slovakia has not entered into a double taxation treaty, as long as such income is documented as taxed in the country of origin, as well as from countries, with which the double taxation treaty exists, if this is more beneficial (i.e. replacing the foreign tax credit method laid down by the treaty – this is applicable as of the tax year 2009). The unilateral exemption also applies to income for work performed for the EU as long as it is taxed by the EU.

Deductions from Income

The following may be deducted from taxable income by both residents and nonresidents:

mandatory social security contributions paid by the employee in Slovakia or abroad a general non-taxable personal allowance. The maximum personal allowance is EUR 4,025.70 for the year 2010 and the maximum amount is adjusted each year. However, the personal allowance of a given year is gradually decreased, depending on the amount of the taxpayer’s tax base as noted below:

  • -

    The maximum amount of the general non-taxable allowance will be available only up to the yearly tax base of EUR 15,387.12 and it will gradually decrease up to the yearly tax base amount of EUR 31,489.92. No general non-taxable allowance can be claimed if the tax base exceeds EUR 31,489.92.

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    The maximum amount of non-taxable allowance for the spouse (the individual must be a Slovak tax resident or a non-resident deriving at least 90% of income from Slovak sources) will be available only up to the yearly tax base of EUR 31,489.92 and it will gradually decrease up to the yearly tax base amount of EUR 47,592.72. A non-taxable allowance for the spouse cannot be claimed if the tax base exceeds EUR 47,592.72. The income of the spouse is also considered in the calculation of the allowance as its decreasing element.

Individuals, who are Slovak tax residents or non-residents deriving at least 90% of income from Slovak sources, can deduct from the annual tax base voluntary pension and life insurance contributions of up to EUR 398.33 a year, provided they meet certain specific criteria:

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©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.

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