At last the final version of the consolidation package?

On 3 October 2024 the Slovak Parliament passed the set of measures to consolidate the public budget. The package consists of two legislative proposals and contains several changes to tax law: 

Higher income tax for large companies: From 1 January 2025 the income tax for firms with revenue over 5 million euro will rise to 24%. The current tax rate remains for smaller companies with revenue under 1 million euro. 

Changes in VAT rates: Three VAT rates will be introduced from the new year: 

• The standard rate of 23%. 

• The reduced rate of 19% on selected food items, mineral water, salt and electricity. 

• The reduced rate of 5% on some food items (meat, milk), medicines, books and periodicals, sports events, fitness centres and accommodation and food services.

Changes for the self-employed and small enterprises: The limit for using the reduced tax rate of 15% will rise from €60,000 to €100,000. The rate will be lowered to 10% for companies with turnover up to €100,000. 

Dividend tax: From 1 January 2025 the withholding tax from dividends will be cut from 10% to 7% on shares in profits for tax periods beginning at the earliest on 1 January 2025. 

Financial transaction tax: From 1 April 2025 a new transaction tax of 0.4% will be introduced (maximum 40 euros) for bank transactions of business entities. Cash withdrawals will be subject to a 0.8% fee on the sum of withdrawal. The annual fee for a payment card will be 2 euros. 

The changes have triggered a variety of responses from MPs and entrepreneurs. Some of the originally contemplated measures such as statutory facilitation of cashless transactions were dropped from the proposal after drawing criticism.