Do you conduct transactions with related parties? Transfer pricing may apply to your company as well. Find out which transactions are considered significant, what documentation requirements apply to you, and what has changed with respect to simplified transfer pricing documentation.
In Slovakia, transfer pricing is governed by Act No. 595/2003 Coll. on Income Tax and currently by the Ministry of Finance of the Slovak Republic Guideline No. MF/012879/2025-724 on the determination of the content of transfer pricing documentation. This Guideline applies for the first time to documentation prepared for a tax period for which the deadline for filing the tax return expires on or after 31 December 2025.
When does transfer pricing apply to your company?
The first step is to determine whether the company enters into transactions with related parties.
Under the Slovak Income Tax Act, related parties include, in particular:
- close persons,
- economically, personally or otherwise related persons or entities,
- persons or entities that form part of a consolidated group for consolidation purposes.
In practice, transfer pricing is not limited to transactions between a Slovak company and its foreign parent or subsidiary. Transfer pricing may also be relevant to transactions between related parties located in Slovakia.
A typical example is a situation where an individual holds an ownership interest in a company while also operating as a sole trader, with business transactions taking place between the sole trader and the company. Similarly, transfer pricing may be relevant where the same individual holds ownership interests in several companies that enter into transactions with each other.
Controlled Transaction ≠ Automatically a Significant Controlled Transaction
The mere existence of a transaction between related parties does not necessarily mean that it qualifies as a significant controlled transaction.
A significant controlled transaction is a legal or similar relationship under which one or more related parties derive taxable income or incur a tax-deductible expense exceeding EUR 10,000 in the relevant tax period.
For a loan or borrowing, a transaction is also considered a significant controlled transaction if the principal amount exceeds EUR 50,000.
Practical Example
A company sells a car with a market value of EUR 11,000 to a related party for EUR 500.
If the price set in this way results in a reduction of the tax base compared with the price that would have been agreed between independent parties under comparable circumstances, an adjustment to the tax base may be required. Since the value of the transaction exceeds the threshold for a significant controlled transaction, it must be assessed under the transfer pricing rules.
By contrast, if the car has a market value of EUR 3,000 and is sold to the related party for EUR 2,500, the transaction value itself does not exceed the threshold for a significant controlled transaction.
The EUR 10,000 threshold is primarily intended to reduce the administrative burden associated with lower-value transactions.
What Has Changed in Transfer Pricing Documentation?
The new Ministry of Finance of the Slovak Republic Guideline No. MF/012879/2025-724 retains three levels of transfer pricing documentation:
- full documentation,
- basic documentation,
- simplified documentation.
The most significant practical change concerns the simplified documentation.
Subject to the applicable conditions, under the new regime, the requirement to maintain simplified documentation is considered fulfilled by properly and completely completing Table I of the corporate income tax return.
This represents a declared administrative simplification. However, it is worth noting that under the previous Ministry of Finance Guideline, the scope of simplified documentation already effectively involved completing a transaction table based on the template included in the relevant annex to that Guideline.
What Information Is Included in Table I?
Table I contains information on significant controlled transactions, including in particular:
- transaction number,
- type or nature of the transaction,
- impact of the transaction on the tax base,
- name of the related party,
- country of tax residence of the related party.
For revenue transactions, a positive amount is reported, while expense transactions are reported as negative amounts.
As a result, the table provides the tax authorities with a significantly more detailed overview of a taxpayer’s transactions with related parties already at the tax return stage.
Does Completing Table I Mean That I No Longer Need to Maintain Transfer Pricing Documentation?
Not necessarily.
Subject to the applicable conditions, completing Table I may replace simplified transfer pricing documentation, but it does not replace basic or full documentation.
If a particular significant controlled transaction is subject to basic or full documentation under the Guideline, the relevant documentation must still be prepared and maintained, even if the transaction is reported in Table I.
Therefore, if a taxpayer meets the conditions for the simplified regime and completes Table I properly and in full, separate simplified transfer pricing documentation is not required to the extent covered by Table I.
What If I Have a Large Number of Transactions?
If the number of rows available in Table I is not sufficient to report all significant controlled transactions (the maximum number of rows is 99), the transactions with the lowest values are omitted from the table, and the relevant information is included in the simplified documentation.
In practice, it is therefore important not only to correctly identify individual transactions, but also to continuously monitor their number, value and nature.
Practical Example: Lease and Loan
Let us consider a company that entered into two significant controlled transactions with a related party in 2026:
- Lease
The company incurred EUR 15,000 in rental expenses.
- Loan
The company provided a loan to the related party with a principal amount of EUR 80,000. Interest income for the year amounted to EUR 7,000.
Both transactions meet the criteria for a significant controlled transaction – the lease based on the value of the transaction and the loan based on the principal amount.
Both transactions must therefore be reported in Table I of the corporate income tax return.
The expense transaction is reported as a negative amount, while the income transaction is reported as a positive amount.
Summary
The new rules introduce a simplification of simplified transfer pricing documentation, while at the same time shifting part of the administrative burden directly to the corporate income tax return.
Transfer pricing is not merely a matter of documentation. The key is to properly classify transactions, assess their significance, and demonstrate that the prices applied are consistent with the arm’s length principle.