Changes in taxes from 1 January 2020

Vladimir Bartoš

List of the most important tax changes effective from 2020.

Amendment to Act no. 222/2004 Coll. on the Value Added Tax in z. n. p. s. with effect from 1 January 2020.

On 15 October 2019 the National Council of the Slovak Republic approved an amendment to Act no. 222/2004 Coll. on the Value Added Tax in z.n.p. (hereinafter "ZoDPH') with effect from 1 January 2020, which main objective is to harmonize the provisions of ZoDPH with the EU legal framework, that is Council Directive (EU) 2018/1910 and Council Directive (EU) 2019/475.

Selected amendments ZoDzP with effect from 1 January 2020:

Limitation of compulsory registration for VAT on the supply of real estate for residential purposes, which are exempt from tax;
Extension of the supply of goods and services for which the foreign person is not required to register for VAT;
Unification of rules in applying the so-called "call-off stock" mode;
Advanced assignments in the mobile delivery so called chain stores within the EU;
Determination of the tax base for the free supply of goods, which is not depreciable tangible property under the provisions of the Law on Income Tax;
Clarification of the accommodation services following the statistical classification of products by activity (CPA) in the exemption;
Advanced substantive conditions for the supply of goods exempt from tax;
Exemption in international trade in crude oil, diesel, petrol under appropriate conditions;
The introduction of the conditions of the exemption in the bonded warehouse;
Define the conditions of the exemption in a special warehouse and conditions of its operation;
Define the conditions of the exemption in the tax warehouse;
The introduction of the obligation to correct the deduction of service performed on fixed assets;
Determine the rules of the tax system in the delivery of tangible fixed assets;
The introduction of the tax base for corrections of tax on travel agencies applying the special scheme for determining the tax base.

Registration of the ultimate beneficial owner

We would like to remind you that the deadline for the registration of the End User of Benefits (ultimate beneficiary owner) to the Business Register is 31.12.2019. Mandatory registration applies to all legal persons registered in the Commercial Register with the exception of entities public service, issuers of securities and entities already registered in the register of public sector partners.

Amendment to Act no. 595/2003 Coll. on Income Tax in ZNP with effect from 1 January 2020

National Council of the Slovak Republic on 11 September 2019 and 18 September 2019 approved the amendment (Act no. 301/2019 Coll., Act no. 315/2019 Coll., And Act no. 316/2019 Coll.)Law no. 595/2003 Coll. on the value added tax in z. n. p. (hereinafter "ZoDzP') with effect from 1 January 2020 with the following modifications.

Selected amendments ZoDzP with effect from 1 January 2020:

The introduction of the term "mikrodaňovník", with appropriate simplifications in the determination of the tax base;
Determination of grossing up non-monetary benefit provided to the employee by the employer;
Determine the possibility of exemption from non-monetary employee income in education, which is provided by the employer;
Exemption from payroll tax in case of a contribution from the social fund when the employee reimbursement of medical examination exceeds the obligations laid down by a special regulation;
The determination limit of exemption from payroll tax in the non-monetary benefit granted to the employee by the employer to ensure the transport of employees to the place of work.

Selected amendments ZoDzP with effect from 1 January 2020:

Limiting exemptions from the sale of shares, in the event of liquidation, bankruptcy or restructuring;
Adjustment of expenses, which are included in the tax base of the taxpayer after the payment, the abolition of other restrictions, except for payment;
The introduction of individual adjustments to hybrid mismatch;
The introduction of new depreciation group 0 to 2 years period of depreciation of the vehicle with a source of fuel / energy BEV and PHEV;
Limitation of submitting declarations in payroll tax, including the possibility of notices of changes by electronic means;
Increasing the amount of lower limit on advance payments from 2500 EUR to 5 000 EUR;
Changes in the registration and reporting obligations of taxpayers and notification of the possibility of a permanent establishment on the basis of contracts concluded with foreign entities;
Changes in the calculation of tax allowances;
Lowering the income tax rate for legal entities and individuals with business income (active income) to 15%, if the income (revenues) for the tax period doesn‘t exceed the amount of 100 000 EUR.