The document summarizes changes to the Slovakian Income Tax Act that took effect on January 1, 2015. Key changes include: 1) New asset depreciation groups were introduced, changing depreciation periods for some assets. Buildings are now depreciated over 40 years instead of 20 years. 2) The use of accelerated depreciation was limited to assets in the 2nd and 3rd groups. 3) Losses from the sale of certain assets like cars are no longer tax deductible. 4) Conditions for interrupting depreciation of assets were expanded. That covers the high level summary of the key changes discussed in the document in 3 sentences.

1. © 2015 Grant Thornton Consulting, k.s. All rights reserved.
February 5, 2015
Dr. Wilfried Serles
IB Grant Thornton Consulting, k.s.
Changes in the Income Tax Act
valid from 1 January 2015
Bart Waterloos
VGD – AVOS AUDIT s.r.o.

2. 2
Changes in the Income Tax Act
 New classes and rules for tax depreciation
 Luxury limits for passenger cards
 Limits on writing off to certain receivables
 Tax deductible costs after payment
 Thin capitalization rules
 Transfer Pricing
 Private use of assets
 Research and Development super bonus
 Other changes

3. 3
Changes in depreciation groups
• The number of depreciation groups was increased from 4 to 6.
• Assets in the 3rd depreciation group with present period of depreciation of 12
years (production technologies) will be depreciated for 8 years. Assets in the
6th depreciation group with present period of depreciation of 20 years will be
depreciated for 40 years. This change concerns assets such as
administrative buildings, hotels and residential buildings.
• Applicable to assets that are put in use after 31-12-2014

4. 4
Depreciation groups and period of depreciation
from 01.01.2015
Depreciation groups and period of depreciation
until 31.12.2014
Group
Period of
depre-
ciation
Assets
(examples)
Group
Period of
depre-
ciation
Assets
(examples)
1 4 years
Computer equipment, office machines,
passenger vehicles, telecommunication
equipment etc.
1 4 years
Computer equipment, office machines,
passenger vehicles, telecommunication
equipment etc.
2 6 years
Compressors, pumps, fork-lift trucks,
furniture, other electric equipment and
devices etc.
2 6 years
Compressors, pumps, fork-lift trucks,
furniture, furniture, other electric
equipment and devices etc.
3 8 years
Generators, transformers, electricity supply
devices, furnaces and air-conditioning
equipment etc. 3 12 years
Generators, transformers, electricity
supply devices, furnaces and air-
conditioning equipment, containers,
boats, ships etc.4 12 years
Containers, boats, ships, sport and
recreational boats etc.
5 20 years
Buildings with exception of buildings
classified into the 6th depreciation group
and engineering works (e.g. roads,
bridges) with exception of engineering
works classified into the 4th and 6th
depreciation groups
4
20 years Buildings and engineering works
(e.g. roads, bridges)
6 40 years
Residential buildings, hotels,
administrative buildings, buildings for
cultural purposes (e.g. cinemas,
theatres), entertainment purposes etc.
Changes in depreciation groups

5. 5
Example
Change in the method of depreciation period of an administrative building from
20 to 40 years
In 2009 the company acquired an administrative building for a purchase price of
EUR 500.000. As the administrative building will be classifed to the 6th
depreciation group, the depreciation period will be changed from 20 to 40 years
with effect from 1 January 2015.
The procedure of depreciation will be as follows:
5
Year Calculation Tax depreciation
2009 – 2014 (1 – 6 year) 500 000 EUR / 20 25 000 EUR
2015 – 2042 (7 – 34 year) 500 000 EUR / 40 12 500 EUR

6. 6
Example
Determination of the depreciation group for buildings
If a building is used for several purposes, the main use will be decisive to
determine to which depreciation group it belongs.
Depreciation group 5: 1 000 m2 i.e.. 33,33 % and depreciation group 6: 2 000 m2
i.e. 66,67 %
6
Use Area used % from the area
used
Classification
code
Depreciation
group
Office space 1 500 m2 50 % 1 220 6
Shops 1 000 m2 33,33 % 1 230 5
Ambulancie 500 m2 16,67 % 1 264 6
Total 3 000 m2 100 % -

7. 7
Change in method of depreciation
• The use of the accelerated depreciation method will be limited to the assets
classified into the 2nd and 3rd depreciation group.
• Given this, such assets as electric equipment and devices, air-conditioning
equipment, furnaces and furniture can be further depreciated using
accelerated depreciation method.
• All other assets have to be depreciated using the straight-line depreciation
method, whereby the method of depreciation must be changed from 1
January 2015, i.e. in case the assets were depreciated using accelerated
depreciation method this has to be changed to straight-line depreciation
method as of 1 January 2015. Depreciation charges for the previous years
will not be adjusted.

8. 8
Example
Change in the method of depreciation for assets classified to the 1st depreciation
group
In January 2014 the company acquired a passenger vehicle for purchase price of EUR
36,000. In 2014 the passenger vehicle was depreciated using the accelerated depreciation
method.
As the passenger vehicle will be classified into the 1st depreciation group, the depreciation
method must be changed from the accelerated to straight-line depreciation method with
effect from 1 January 2015.
The procedure of changing of the depreciation will be as follows:
Year Input price
Accelerated
depreciation
method
Change from
accelerated to
straight-line
depreciation method
Residual value
2014 36,000 9,000 - 27,000
2015 36,000 13,500 9,000 18,000
2016 36,000 9,000 9,000 9,000
2017 36,000 4,500 9,000 0

9. 9
Example
Change in the method of depreciation in case of reclassification of tangible asset
from the 3rd to the 4th depreciation group
In January 2010 the company acquired a container for purchase price of EUR
12,000. The container was classified into the 3rd depreciation group with period
of depreciation of 12 years and in the years 2010 – 2014 it was depreciated
using the accelerated depreciation method.
As of 1 January 2015, the container has to be reclassified to the 4th depreciation
group (also with depreciation period of 12 years). As the accelerated depreciation
cannot be used for the assets classified into the 4th depreciation group as of 1
January 2015, it is necessary to change the accelerated depreciation method to
the straight-line depreciation method with effect from 1 January 2015.

10. 10
Example
Change of depreciation method in case of reclassification of tangible asset from the
3rd to the 4th depreciation group (acquisition price EUR 12,000)
Year
Accelerated
depreciation
Residual value
using accelerated
depreciation
Change from
accelerated to straight-
line depreciation
Residual value in
case of change to
straight-line
depreciation
2010 1,000 11,000 - 11,000
2011 1,834 9,166 - 9,166
2012 1,667 7,499 - 7,499
2013 1,500 5,999 - 5,999
2014 1,334 4,665 - 4,665
2015 1,167 3,498 1,000 3,665
2016 1,000 2,498 1,000 2,665
2017 833 1,665 1,000 1,665
2018 666 999 1,000 665
2019 500 499 665 0
2020 333 166 - 0
2021 166 0 - 0

11. 11
Losses on sale
Losses on sale of passenger vehicles, motorbikes, ships, sport and recreational
boats, and losses on sale of property classified into the 6th depreciation group
will not be tax deductible any more.
Example
In January 2013 the company acquired a passenger vehicle for purchase price of
EUR 36,000. In March 2015 the company will sell this vehicle for EUR 17,000.
The following table shows the impact on the tax base in 2015:
Year Tax depreciation Tax residual value
Recorded
sales
revenues
Increase of the tax
base
2013 9,000 27,000 -
2014 9,000 18,000 -
2015 0 17,000 1,000

12. 12
Interruption of depreciation
From 1 January 2015 the conditions under which depreciation of tangible
assets must be interrupted will be extended:
• In tax periods, in which the asset is not used for business purposes;
• In case of change of the tax period to the fiscal year (if the tax period is
changed for the second time during a period of two consecutive calendar
years);
• If the validity of the preliminary permission for use of building is not extended.
• But it will be no longer possible during a tax control, respectively for tax
periods over which a tax control has been performed.

13. 13
Changes in financial lease
• Tangible fixed assets, that were acquired under the financial lease contract
have to fulfil the condition of the period of lease representing at least 60% of
the period of depreciation. The condition of the minimum duration of the
period of lease of 3 years was cancelled.
• The possibility of depreciation of the assets acquired under the financial lease
contract during the period of financial lease, which in the practice led to much
shorter period of depreciation, was cancelled. From 1 January 2015 they will
be depreciated according to the rules of the standard tax useful life.
• This new rule applies to subjects of financial lease that were leased under
contracts concluded after 1 January 2004.

14. 14
Example
Changes in depreciation of the subjects of financial lease
In February 2014 the company concluded the contract on financial lease of
passenger vehicle at the amount of EUR 24,000 for the period of February 2014
– January 2017.
Amount of depreciation (in
case of depreciation period of
36 months until 31.12.2014)
Amount of depreciation (in
case of depreciation period
48 months from 01.01.2015)
Residual value
2014 7,334 (February – December) - 16,666
2015 8,000 6,000 10,666
2016 8,000 6,000 4,666
2017 666 (January) 4,666 0

15. 15
Example
Changes in depreciation of the assets acquired under the financial lease contract
In January 2013 the Company acquired a building used for administrative
purposes with value of EUR 600,000 under the financial lease contract. The
period of lease was agreed for a period of 12 years (January 2013 – December
2024).
Annual amount of
depreciation
(depreciation period of 144
months until 31.12.2014)
Annual amount of depreciation
(depreciation period of 480
months from 01.01.2015)
Residual value
2013 50,000 - 550,000
2014 50,000 - 500,000
2015 – 2047 -
15,000
(cumulative amount of
depreciation EUR 495,000)
5,000
(residual value as at
31.12.2047)
2048 - 5,000 0

16. 16
Financial lease / Technical improvements
• Technical improvements of the subjects of financial lease will not be
depreciated separately as „Other assets“ anymore.
• For the purposes of calculation of tax-deductible depreciation the acquisition
costs of the assets acquired under the financial lease contract will be
increased by the amount of technical improvements.
• In this way the period of depreciation will be extended accordingly.

17. 17
Example
Depreciation in case of technical improvements of the assets acquired under
financial lease contract
In January 2015 the company concluded the contract on financial lease of
passenger vehicle in the amount of EUR 28,000 for the period of 40 months,
from January 2015 to April 2018. In January 2017 technical improvements in the
amount of EUR 2,000 will be performed.
Tax depreciation Residual value
2015 7,000 21,000
2016 7,000 14,000
2017 7,500 8,500
2018 7,500 1,000
2019 1,000 0

18. 18
Depreciation of passenger vehicle
• The amendment introduces the luxury limit in the amount of EUR 48,000 for
passenger vehicles, but it only concerns taxpayers who use passenger
vehicles for business purposes and whose tax profit is lower than EUR
12,000. This limit of tax base will be increased in case of the use of several
passenger vehicles, depending on the number of these vehicles. For
instance, if a taxpayer uses 2 passenger vehicles, the limit of profit will be
EUR 24,000.
• Taxpayers who do not exceed the respective limit of profit may depreciate the
passenger vehicle on the basis of acquisition costs limited to the amount of
EUR 48,000. Taxpayers with higher tax profits may depreciate the vehicle in
full amount.
• This rule does not apply to lessors of luxury passenger vehicles who may
apply depreciation in individual tax periods up to the amount of income from
lease of these vehicles.

19. 19
Example
Depreciation of passenger vehicle
In 2015 the company will purchase a passenger vehicle for purchase price of
EUR 70,000. The following table shows impact during the depreciation period in
years 2015-2018:
Year
Amount of
depreciation from
acquisition price of
EUR 70,000
Amount of
depreciation from
limited acquisition
price of EUR 48,000
Tax base
Increase of tax base
of EUR 5,500 (=17,500-
12,000) at the tax base
< EUR 12,000
2015 17,500 12,000 10,000 5,500
2016 17,500 12,000 12,000 -
2017 17,500 12,000 11,000 5,500
2018 17,500 12,000 22,000 -
For the purposes of calculation of tax residual value the tax depreciation charges
in the amount of EUR 17,500 will be used, i.e. the tax non-deductible
part of tax depreciation charges will not be considered as tax
deductible through the tax residual value of passenger vehicle.

20. 20
Example
Depreciation of passenger vehicle
Top cars sold in 2014 in Slovakia:
Source: http://bestsellingcarsblog.com/2015/01/slovakia-november-2014-skoda-yeti-vw-golf-sportsvan-shine/#more-49701
os Model 11.14 % Oct 2014 % Pos
3 Skoda Octavia 318 5.3% 2 3 757,00 5.3% 1
2 Skoda Fabia 324 5.4% 3 3 725,00 5.2% 2
1 Skoda Rapid 331 5.5% 4 3 571,00 5.0% 3
4 VW Golf 187 3.1% 5 2 524,00 3.5% 4
8 Kia Cee’d 111 1.9% 6 2 376,00 3.3% 5
7 Hyundai i30 117 2.0% 9 1 948,00 2.7% 6
227 Suzuki SX4 0 0.0% 1 1 655,00 2.3% 7
14 Opel Astra 94 1.6% 12 1 281,00 1.8% 8
6 Kia Sportage 152 2.5% 7 1 252,00 1.8% 9
31 VW Polo 49 0.8% 11 1 063,00 1.5% 10

21. 21
In September 2015 the company acquires a passenger vehicle for an amount
of 60 000 eur. Based on the new rules, if the tax base of the company:
1. > = 12 000 (yearly depreciation limit from 48 000 eur) – no correction is
required
2. < 12 000 (yearly depreciation limit from 48 000 eur) – the correction to the
tax base is required.
Example
Depreciation of passenger vehicle
Year
Amount of decpreation
from acquisition price
(60 000/4)
Amount of depreciation
from limited acquisition
prices (48 000/4)
Tax base
Increase of tax Base
if tax base is <
12.000 EUR
2015
5 000 (15 000/12x4, sept. -
dec.)
4 000 (12 000/12x4 sept. -
dec.)
10 000 1 000
2016 15 000 12 000 13 000 -
2017 15 000 12 000 7 000 3 000
2018 15 000 12 000 12 500 -
2019
10 000 (15 000/12 000x 8,
jan. – aug.)
8 000 (12 000/12x8 jan. –
aug.)
8 000 2 000
Total correction tax base: 6 000

22. 22
Example
Depreciation of passenger vehicle
In January 2015 the company will purchase 2 passenger vehicles, each for
purchase price of EUR 70,000. The following table shows impact during the
period of depreciation in years 2015-2018:
Year
Amount of
depreciation from
acquisition prices of
EUR 140,000 (70x2)
Amount of depreciation
from limited acquisition
prices of EUR 96,000
(48x2)
Tax base
Increase of the tax
base of EUR 11,000
(=35,000-24,000) at
tax base < EUR
24,000
2015 35,000 24,000 18,000 11,000
2016 35,000 24,000 25,000 -
2017 35,000 24,000 11,000 11,000
2018 35,000 24,000 28,000 -

23. 23
Lease of passenger vehicle
• On the side of lessee the annual tax costs of lease are limited to EUR 14,400
if his tax profit is lower than EUR 14,400.
• In case of the tax base higher or equal to EUR 14,400 the costs of lease will
be tax deductible in full amount.
• This limit of profit will be increased in case of use of several passenger
vehicles, depending on the number of these vehicles. For example, if the
taxpayer uses 2 passenger vehicles the limit of profit will be EUR 28,800.

24. 24
Example
Lease of passenger vehicle
In January 2015 the company will lease a passenger vehicle with value of EUR
70,000 for the period of January 2015 – December 2018, whereby the annual
cost of lease will be EUR 20,000. The following table shows impact on the tax
base during the period of lease.
Year
Recorded cost of
lease
Limited cost of
lease
Tax base
Increase of the tax base
of EUR 5,600 (=20,000-
14,400) at tax base < EUR
14,400
2015 20,000 14,400 10,000 5,600
2016 20,000 14,400 12,000 5,600
2017 20,000 14,400 15,000 -
2018 20,000 14,400 22,000 -

25. 25
Example
Lease of passenger vehicle
In April 2015 the company will lease a passenger vehicle with value of EUR
60,000 for the period of April 2015 – March 2019, whereby the annual cost of
lease will be EUR 18.000. The following table shows impact on the tax base
during the period of lease.
Year Recorded cost of lease Limited cost of lease Tax base
Increase of the tax base
at tax base < EUR 14,400
2015 13,500 (April – December) 10.800 (April – December) 10,000 2.700
2016 18,000 14,400 20,000 -
2017 18,000 14,400 11,000 3.600
2018 18,000 14,400 16,000 -
2019 4.500 (January-March) 3,600 9.000 900

26. 26
Example
Lease of passenger vehicle
In January 2015 the company will lease 2 passenger vehicles, each with value of
EUR 70,000, for the period of January 2015 – December 2018, whereby annual
cost of lease will be EUR 20,000/vehicle. The following table shows impact on
the tax base during the period of lease.
Year
Recorded cost of
lease for 2 passenger
vehicles
Limited cost of lease
for 2 passenger
vehicles
Tax base
Increase of the tax base
of EUR 11,200 (=40,000 –
28,800) at tax base <
EUR 28,800
2015 40,000 28,800 10,000 11,200
2016 40,000 28,800 12,000 11,200
2017 40,000 28,800 30,000 -
2018 40,000 28,800 29,000 -

27. 27
Write off of receivables
Tax deductible write off of irrecoverable receivables (e.g. in case of termination of
bankruptcy proceeding, restructuring or execution proceedings , issue of the
court´s ruling or death of the debtor) will be possible only for receivables that
were initially included in taxable income.

28. 28
Example
Write off of receivable in case of termination of the bankruptcy proceeding due to
the lack of assets of the debtor
The company reports in the accounting a receivable from loan in the amount of EUR
13,000. The amount of the outstanding principal is EUR 10,000 and outstanding
interest on the loan represent the amount of EUR 3,000. Due to the lack of assets of
the debtor the bankruptcy proceeding was terminated. The receivable from the loan in
the amount of EUR 13,000 will be written off in the year of termination of the
bankruptcy proceeding.
Impact on the tax base:
Bankruptcy proceeding terminated
in 2014
Bankruptcy proceeding terminated
in 2015
Receivable
Amount
in EUR
Accounting
write off 2014
Tax write off
2014
Amount in
EUR
Accounting
write off 2015
Tax write off
2015
Principal 10,000 10,000 10,000 10,000 10,000 0
Interest 3,000 3,000 3,000 3,000 3,000 3,000

29. 29
Tax deductible costs after payment
The amendment extends the group of costs that will be tax-deductible no sooner
than settled:
• Costs of marketing studies and other studies, costs of market survey
• Costs of consulting and legal services;
• Payments to taxpayers resident in states with which the Slovak Republic has not
concluded international double taxation treaty, will be considered as tax-deductible
after the withholding tax will be remitted to the tax authority and the respective
notification will be delivered to the tax authority or after the security of tax is performed
on these payments.
• Agency commissions, including those paid under mandate and similar contracts (e.g.
commercial on commercial representation), will be tax-deductible after their payment
up to 20% of the value of mediated transaction. This provision does not apply to certain
financial institutions (e.g. banks, insurance companies and their branches, etc.),
• Costs of obtaining of standards and certificates will be included in the tax base evenly
during their validity, but not longer than during a period 36 months starting from the
month of their payment;
• The change in tax deductibility of costs after their payment will have to be reflected in
the calculation of deferred tax.

30. 30
Tax non-deductible reserves
Reserves for:
• unbilled supplies and services,
• preparation, audit and publication of annual financial statements, including
their annex,
• preparation of tax return
will not be tax-deductible any more.

31. 31
Example
Tax deductible costs after payment and reserves
During the year 2015 the company recorded the following transactions:
• Invoice for consulting services in the amount of EUR 2,000 and invoice for
market survey in the amount of EUR 3,600; none of the invoices was settled
by 31.12.2015;
• Reserve for unbilled supplies in the amount of EUR 4,500;
• Reserve for the preparation of annual financial statements and tax return for
FY2015 in the amount of EUR 4,000;
• Unpaid contract fine toward the contract partner in the amount of EUR 500.

32. 32
Example
Tax deductible costs upon payment and reserves
In 2016 the company will pay:
• Invoice for consulting services from the year 2015 in the total amount of EUR
2,000,
• Invoice for market survey from the year 2015 in the amount of EUR 3,600,
• Invoice for unbilled supplies in the amount of EUR 4,500 and invoice for
annual financial statements and tax return in 2015 in the amount of EUR
4,000; for this purpose the company used provisions recorded in 2015.
• The company will record provision for preparation of annual financial
statements and tax return in the amount of EUR 3,500;
• The company will further record contract fines and late payment interest in
the amount of EUR 300, which were not paid as at 31.12.2016.

33. 33
Example
Tax deductible costs after payment and reserves
Illustration of impact on the tax base of the company in 2015 and 2016:
Year 2015 2016
Retained earnings 16,000 20,000
Costs of consulting services + 2,000 - 2,000
Costs of market survey + 3,600 - 3,600
Provision for unbilled supplies + 4,500 - 4,500
Provision for preparation of annualfinancial statements and tax return + 4,000
- 4,000
+ 3,500
Contract fines and late payment interest + 500 + 300
Tax base 30,600 9,700
Tax 22% 6,732 2,134

34. 34
Non-deductible costs
• Tax deductible advertising items, the value of which must not exceed EUR 17
per unit, do not include tobacco products and alcoholic beverages; these
advertising items will be tax-deductible only at producers of tobacco products
and alcoholic beverages.
• Wine is an exception. Wine bottles as advertising gift will be tax deductible in
the total amount up to 5% of the tax base of the taxpayer. These limiting rules
do not apply to producers of alcoholic beverages.
• Contract fines and contracted late payment interest or default charges, that
were tax-deductible after payment, will not be tax-deductible any more.

35. 35
Tax deductibility of interest costs
• So-called „thin capitalisation rule“ for financing between related parties is
introduced.
• Costs of credits and loans provided by related party will be tax-deductible up
to 25% of EBIDTA (earnings before interest, taxes, depreciation and
amortization).
• Activated interest in fixed assets remains unaffected by this prohibition of
deduction.
• Leasing companies, banks and insurance companies are exempt from this
rule.

36. 36
Profit & Loss Statement Line Value
Revenues from production line 05+06+07 04 1,200,000
Revenues from production and services (601,602,606) 05 1,200,000
Production line 09+10 08 1,250,000
Consumption of material, energy( 501, 502 , 505A) 09 100,000
Services (accounting class 51) 10 1,150,000
Gross profit from production and services line 03+04-08 11 (50,000)
Total personnel costs 12 1,750,000
Depreciation of non-current tangible assets and amortization of non-current intangible assets (551) 18 1,250,000
Other operating revenues(644,645,646,648,655,657) 22 1,350,000
Other operating expenses (543,544,545,546,548,549,555,557) 23 2,200,000
Operating income, line 11-12-18+22-23 26 (3,900,000)
Interest revenues (662) 38 7,600,000
Interest expenses (562) 39 2,800,000
Profit/loss from financial activities line +38-39 46 4,800,000
Profit/loss from commercial activities before taxation line 26 + 46 47 900,000
Income tax from ordinary profit/loss line 49+50 48 450,000
- Payable (591,595) 49 50,000
- Deferred (+/-592) 50 400,000
Profit/loss from commercial activities after taxation line 47 - 48 51 450,000
Example
Tax deductibility of interest costs
A Slovak production company received from its parent company a loan for building of its
production plant. Total interest expenses of the company amount to EUR 2,800,000, of which
interest paid to the parent company represent the amount of EUR 2,500,000.

37. 37
Example
Tax deductibility of interest costs
After consideration of the rate of the corporate income tax the additional tax
burden in this specific case represents the amount of EUR 277,750.
Indicator (line 47 + line 39 + line 18) 4,950,000
25% of the value of the indicator 1,237,500
Interest on loan from parent company 2,500,000
Increase of the tax base 1,262,500
Additional tax burden 22% 277,750

38. 38
Transfer pricing
From 1 January 2015 it is necessary to include transactions between domestic
related parties in the transfer pricing documentation.

39. 39
Example
Transfer pricing
In 2014 and 2015 the company Alfa SK is engaged in the following transactions
with the parent company Alfa AT established in Austria and affiliated related
company Beta SK established in Slovakia.
The obligation to report the transactions in the transfer pricing documentation in
the company Alfa SK in 2014 a 2015:
Description of transaction
Obligation to include the transaction in the transfer
pricing documentation
2014 2015
Purchase of vehicles from Alfa AT yes yes
Reception of loan from Alfa AT yes yes
Sale of vehicles to Beta SK no yes
Purchase of spare parts from Beta SK no yes
Provision of business advisory services to Beta SK no yes
Reception of maintenance services from Beta SK no yes

40. 40
Private use of assets
• Costs of acquisition, operation and maintenance of assets that are used for
both business and private purposes must be reduced in the proportion to their
actual use for private purposes.
• It will be further possible to deduct 80% of costs without provision of special
evidence.
• So either proof of actual percentage of use; or the lump-sum of 80%
• The same percentage will then apply to the depreciation

41. 41
Example
Use of assets for private purposes
In January 2015 the company will acquire for its employees 10 notebooks at cost of
EUR 2,000/unit. The employees can partially use NTB for private purposes. In 2015
the company will incur costs of repair of NTB in the amount of EUR 500. The
company will decide to apply the lump-sum amount of 80% on the depreciation
charges of NTB and the repair costs.
Impact on the tax base:
For the purposes of calculation of the tax residual value of NTB the tax depreciation
charges in 100% amount have to be used, i.e. the 20% of the tax depreciation
charges considered as tax non-deductible will not be reflected in the tax residual
value and will represent final tax non-deductible cost.
Costs recorded in connection
with depreciation and repair of
NTB in 2015
Amount of costs
recorded in 2015
Amount of costs
deducted from tax
base in 2015 (80%)
Adjustment of the tax
base in 2015 (in the
amount of 20%)
Depreciation of NTB for FY2015 5,000 4,000 + 1,000
Costs of repair 500 400 + 100
Total 15,500 12,400 + 3,100

42. 42
Example
Depreciation of passenger vehicle, used for 80%
In 2015 the company will purchase a passenger vehicle for purchase price of
EUR 80,000. The following table shows impact during the depreciation period in
years 2015-2018:
Year
Really applicable
depreciation
Amount of
depreciation from
limited acquisition
price of EUR 48,000
Tax base
Increase of tax base
of EUR 4.000 (=16.000-
12,000) at the tax base
< EUR 12,000
2015 20.000 / 16.000 12,000 7,000 4.000
2016 20.000 / 16.000 12,000 14,000 -
2017 20.000 / 16.000 12,000 11,000 4.000
2018 20.000 / 16.000 12,000 16,000 -

43. 43
Research & Development
• Research and development will be tax-supported in the following period.
• The support will have the form of a 125% „super-deduction“ of R&D costs.
• The super-deduction applies to:
- All research and development costs
- Personnel costs of graduates working in the area of research and
development
- Increase of R&D costs
• Its application is made conditional upon a written research and development
project, which must be submitted in case of tax audit.

44. 44
Example
Tax deduction of R&D costs
In 2015 and 2016 the company will develop a new product. The project will be
implemented with participation of employees of company, for whom the legal
conditions for recognition of deduction in 2016 are fulfilled (graduates).
Calculation of tax deduction in 2016:
Recorded R&D costs
R&D costs in
2016
In it personnel
costs of
graduates
R&D costs in
2015
Increase of R&D
costs (year 2016 –
year 2015)
Consumption of materials 20,000 10,000 10,000
Consumption of energy 15,000 12,000 3,000
Personnel costs 36,000 7,000 30,000 6,000
Total 71,000 7,000 52,000 19,000
Tax deduction in 2016
(25 %)
17,750 1,750 - 4,750
Total deduction in 2016: 24,250 (= 17,750+1,750+4,750)

45. 45
Taxation of monetary and non-monetary benefits
provided by pharmaceutical companies
Subject of taxation:
monetary benefits and non-monetary benefits provided to the health care provider, its
employee or health professional by the marketing authorization holder, wholesale
distribution authorization holder, production authorization holder and from 01.01.2015 by
the pharmaceutical company.
Tax rate: 19%
Payment of withholding tax/notification obligation:
monetary benefits – the tax will be withheld by the provider upon payment of benefits by
the 15th day of each month for the previous calendar month. The notification obligation
arises to the provider in the same period.
non-monetary benefits – obligations resulting for the recipient and the provider of benefits
Recipient of non-monetary benefits – will pay the tax before the end of the calendar
month following the calendar quarter, in which the non-monetary benefits were received.
The notification obligation arises to the recipient in the same period.
Provider of non-monetary benefits – The provider of non-monetary benefits must fulfill
the notification obligation by the 15th day after the end of the calendar quarter, in which the
benefits were provided.

46. 46
Example
Taxation of non-monetary benefits provided by pharmaceutical companies
In May 2015 a pharmaceutical company provides to the practitioner the free
participation in specialized event involving the presentation of new medical
products in the seat of the parent company abroad. In addition to the fee for
participation, the pharmaceutical company will reimburse to the practitioner the
transport and accommodation costs. The pharmaceutical company determined
non-monetary benefits for the practitioner on the basis of actually incurred costs
in the amount of EUR 1,500.
Obligations of the practitioner: tax payment in the amount of EUR 285 by
31.07.2015. Delivery of the notice of payment of the withholding tax to the tax
authority (using the form issued by FR SR)
Obligations of the pharmaceutical company: submission of the notice of
provision of non-monetary benefits (using the form issued by FR SR) by
15.07.2015. In addition to the basic data, the notice will indicate the amount
of non-monetary benefits and the date of their provision.

47. 47
Year Tax base Clearance of tax losses Forfaited tax losses
2014 EUR -200,000 - -
2015 EUR -100,000 - EUR 50,000
(¼ of tax loss 2014)
2016 EUR 80,000 -EUR 75,000
(max. ¼ of tax losses 2014 and 2015)
-
2017 EUR 80,000 -EUR 75,000
(max. ¼ of tax losses 2014 and 2015)
-
2018 EUR 80,000 -EUR 75,000
(max. ¼ of tax losses 2014 and 2015)
-
2019 EUR 80,000 -EUR 25,000
(max. ¼ of tax loss 2015)
TAX losses
The amendment explicitly provides that tax losses must be evenly utilized over a
period of 4 years.

48. 48
Foreign services
• The withholding tax is applicable to services provided by service providers
not tax resident in Slovakia (commercial, technical and other consulting
services, services of agents, construction and assembly works, etc.) only in
case such services would be provided in the territory of Slovakia.
• It will lead to the decrease of the number of cases affected by the 35%
withholding tax rate.

49. 49
Example
Consulting services provided by a Liechtenstein company
Service Invoiced amount
Place of provision of
service
Withholding tax
Business consulting 100,000 Slovakia 35,000
Business consulting 100,000 Liechtenstein 0
A Liechtenstein company will provide to a Slovak Ltd consulting services and
charge EUR 100,000 for them.
Option 1: The services will be provided in Liechtenstein
Option 2: The services will be provided in Slovakia

50. 50
Other changes
• Member contributions arising from the voluntary membership of a legal
person established in order to protect the interests of the taxpayer in total up
to 5% of the tax base, with a ceiling of 30,000 per year.
• Obsolete stocks
The inclusion in the tax base is limited for the cost of inventories at their
disposal because of the expiration date. However, conditions are introduced,
after fulfilment of which can the cost of liquidated stocks still be considered
tax deductible, if the tax payer:
- Until the expiry of that period demonstrably takes steps to promote their
sale by gradually reducing prices, or
- Delivers such food supplies free of charge to the Food Bank of Slovakia.
Equally the discarding of inventories due to their classification as dangerous
goods under the Consumer Protection Act will not be considered a tax
deductible expense.

51. 51
Other changes
• sunk costs
sunk costs relate to the amount reported as the acquisition of intangible and
tangible fixed assets recorded as assets under construction, upon the
cancellation of the work or the permanent stopping of the work, if not relating
to damage
This amount is included in the tax base evenly over 36 months from the
month in which the taxpayer decided upon the cancellation of work and
permanent suspension of work.
In the event that there is a work stoppage due to damage, then the costs of
failed investments are deemed non-taxable.

52. 52
Questions
& Feedback

53. Dr. Wilfried Serles
T +421 2 59 300 400
E wilfried.serles@sk.gt.com
IB Grant Thornton Consulting, k.s.
Križkova 9
SK-811 04 Bratislava
www.grantthornton.sk
Bart Waterloos
T +421 2 59 300 400
E bart.waterloos@vgd.eu
VGD – AVOS AUDIT s.r.o.
Moskovska 13
SK-811 08 Bratislava
www.vgd.eu
Contacts

54. Thank you for
your attention
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