Frequently asked questions on tax on financial transactions
Q1: What payments are subject to the tax on financial transaction?
Generally, any withdrawal of funds from a business account will be subject to financial transaction tax.
Exceptions are, for example, payments in one bank between the accounts of the same entrepreneur or payments related to tax, social security and health insurance contributions. The transfer of wages to employee accounts is subject to financial transaction tax.
A set-off of receivables and payables is not considered a financial transaction.
Question 2: What if the parent company seated abroad pays invoices on behalf of its subsidiary established in the Slovak Republic?
A parent company that makes payments abroad on behalf of a subsidiary in Slovakia and subsequently recharges to the subsidiary the costs associated with the execution of the financial transaction and relating to the activity carried out domestically are subject to the financial transaction tax. Only in this situation the set-off of receivables shall also be regarded as payment.
The Slovak subsidiary will be required to calculate, pay and report the financial transaction tax.
Question 3: What if the entrepreneur pays invoices from a private account?
The same applies as in the answer to question no. 2. The entrepreneur for whom the costs have been reimbursed will be liable to calculate, pay and report the financial transaction tax.
Question 4: Is a payment by card (debit/credit) issued to a business account also subject to tax on financial transactions?
Payment by card is not subject to the financial transaction tax, except from cash withdrawals, for example from an ATM or a bank. Cash withdrawals are subject to a tax of 0.8% of the amount withdrawn; there is no maximum tax limit on the financial transaction in this case.
The use of a card will be subject to a financial transaction tax of EUR 2/year. The withdrawal of funds using the credit card for a business account will not be subject to financial transaction tax.
Question 5: Can an entrepreneur avoid paying financial transaction tax by opening a business account established abroad?
No. An entrepreneur who is recharged the costs of carrying out a financial transaction or who carries out financial transactions on his foreign business account is required to calculate and pay the tax himself for the respective tax period. In this case, the entrepreneur will face administration tasks by calculating, paying and reporting the tax on financial transaction. Should the business bank account be opened in Slovakia, the administration tasks related to calculating, paying and reporting tax on financial transactions are borne by the Slovak bank/financial institution.
Moving a company’s headquarters/business seat abroad without moving the business itself does not exempt the company from the financial transaction tax.
Question 6: A payment made from a business account by mistake. Is this transaction subject to tax?
Yes. Any withdrawal of funds from a business account (other than a withdrawal to another own business account with the same bank) is subject to financial transaction tax.
Question 7: Is a payment from a foreign account made on behalf of a permanent establishment in the Slovak Republic (an establishment for income tax purposes, not registered in the Slovak Business Register) also subject to the financial transaction tax?
No, such payments are not subject to financial transaction tax.
