Virtual currency and the income tax

As of 1 October 2018, the income tax act introduces a definition of virtual currency for the first time. Income/ revenue is also understood to mean an exchange of virtual currency for assets, another virtual currency, service or transfer of this currency against remuneration. In the case of exchange of virtual currency, reception is valuated at fair value at the time of exchange. Entrepreneurs will be to use the acquisition price as an expense in the case that virtual currency has been acquired by means of purchase, or the fair value in case it has been acquired by means of exchange. It is necessary to proceed according to this stipulation when submitting the tax declaration for the year 2018 already.

Introduction of a tax on insurance

In the area of non-life insurance, a tax on insurance is being introduced, providing that the insurance risk is located in Slovakia. The person obliged to pay the tax will be the insurer. The policy holder, who has paid insurance to a foreign insurance company, which does not have a branch in Slovakia. Also a legal entity, to which the costs from insurance are re-invoiced, if they relate to insurance risk located in Slovakia. The tax rate is 8% and the taxable period is a calendar quarter of the year.

Contribution to recreation

From January, employees of companies, which employ a minimum of 50 persons, can request a contribution to recreation in Slovakia. The condition is that the employee has been working at the company for a minimum of 2 years. The employer will pay 55% of expenses on recreation, reaching a maximum of EUR 275 per year. Such contributions will not be subject to tax, or obligatory insurance, and for the employer this will be a tax-eligible cost. For smaller companies, these contributions will not be obligatory, but they can provide them to employees under similar conditions.

Electronic cash registers

From July 2019, entrepreneurs, who use a classic cash register, will be obliged to use a so-called online cash register, or virtual cash register (electronic cash register), which will be connected to the financial administration.

Other changes

• From January, and obligatory levy of 2.5% is being introduced for chain stores.
• The minimum wage increases from EUR 480 to EUR 520.
• The minimum levies for tradesmen for social insurance will reach EUR 158.11 from 1 January 2019 and for health insurance it will be EUR 66.78.
• As of 1 January 2019, the child tax credit increases from EUR 21.56 to EUR 22.17, in case of a child up to 6 years the tax credit increases to a double from April 2019, that is EUR 44.34 per month.
• The untaxable part per taxpayer is increased from EUR 3,803.33 per year to EUR 3,937.35 per year.

In case of any questions regarding the changes being implemented in Slovakia, please, do not hesitate to contact us.

Ingrid Cicáková