Slovakia & COVID-19 & Financial update

By Katarína Pfeffer, Zuzana Jurickova

05-2020

The COVID-19 pandemic is disrupting our daily lives, as well as entrepreneurs' operations in all business sectors. The state authorities must react fast and adopt legislation aiming at mitigating the COVID-19 negative impacts very quickly.

Below we present a summary of the key changes recently passed in the area of finance in Slovakia. Part 1 discusses debt instalment deferrals, amendments in tax proceedings, VAT changes and customs IP measures, while Part 2 explores the extension of economic aid to "big employers" – so-called "KURZARBEIT" adopted to the Slovak business conditions.

PART 1 - Debt Instalment Deferrals, Tax Proceedings and VAT Amendments, Customs IP Measures and Others
Deferral of repayment of debt instalments[1]:
  • Small enterprises or other entrepreneurs (natural persons) are allowed to apply to the bank for deferral of repayment of debt instalments for up to 9 months in order to mitigate negative consequences of the COVID-19 pandemic.
  • Permission to defer repayment of debt instalments shall be considered as an amendment of the credit loan agreement without the need to conclude any further amendments.
  • Deferral of repayment of debt instalment does not affect the debtor’s creditworthiness for the future.

Increase of the limit for contactless payments[2]:

  • The payment services provider applies a maximum allowed limit at payment operations conducted through payment cards and POS terminals, i.e. a single sum of contactless electronic payment transaction not exceeding EUR 50.

Discontinuance of tax inspections and tax proceedings[3]:

  • Tax inspection shall be discontinued until the end of the pandemic, and starting as of the following day after the application for discontinuance was filed.
  • Tax proceedings shall be discontinued until the end of the pandemic, and starting as of the following day after the application for discontinuance was filed.

Advance payments relating to income tax[4]:

  • Advance payments relating to income tax payable during the term of the pandemic shall not be paid for the period following immediately after the period for which the turnover was decreased at least in the amount of 40% as opposed to the same period of the previous calendar year.

Measures relating to cash registers[5]:

  • Notification of changes relating to cash registers may be fulfilled after the period of the pandemic even for changes which occurred during the pandemic period.

Customs measures when enforcing IP rights by the customs authorities[6]:

  • Deferral of enforcement of customs arrears: Enforcement of arrears in customs enforcement proceeding shall be deferred during the pandemic period.
  • No responsibility for customs delict committed so that the person did not comply with the conditions set for the goods in accordance with the Act on Customs No. 199/2004 Coll. as amended, if the person proves that the conditions were not fulfilled due to the negative impact of the pandemic.

Measures relating to VAT and consumption tax[7]:

  • If the tax payer repeatedly does not fulfil his/her duty to submit his/her VAT return or control report ("kontrolný výkaz"), or repeatedly does not pay the positive balance between overall payable VAT, such a taxpayer shall not be published in the list on the website of the financial directorship if those duties are fulfilled by the end of the month following the end of the pandemic.
  • Certain conditions relating to return of undue deductions: The condition on return of undue deduction relating to customs arrears, and arrears on obligatory insurance payments, shall be considered fulfilled if the VAT payer pays the sum due by the end of the calendar month following end of the pandemic.
  • Applying for a tax allowance (exemption) ("uplatnenie zvýhodnenej sadzby dane"): If the tax payer applies for a tax allowance (exemption) of consumption taxation from mineral oil and he/she cannot prove the conditions to obtain it during the pandemic period, then conditions may be proved for every tax period for the pandemic period until end of the calendar month following end of the pandemic.
  • Withdrawal of permission and disqualification of evidence: If the tax payer does not fulfil his/her duties stated in specific laws (e.g., pursuant to the Act No. 461/2003 on social insurance as amended, the Act No. 580/2004 on health insurance as amended) due to negative consequences of the COVID-19 pandemic, the customs authority may waive from their duty to withdraw the permission according to the Act No. 98/2004 on consumption tax from mineral oil, or according to the Act on consumption tax from tobacco products  No. 106/2004 Coll. as amended, or the customs authority may waive from their duty to disqualify of evidence pursuant to the abovementioned laws.

Measures relating to public sector property[8]:

  • If the debtor of the state (person towards which the state has entitlement to a monetary fulfilment) has concluded an agreement on instalments pursuant to the Act No. 374/2014 on receivables of the state, as amended, but the debtor does not pay the instalment due to negative consequences of the pandemic, the administrator of the state’s receivable is entitled to conclude a new agreement on instalments if the debtor agrees to pay instalments at latest by the end of the third calendar month following end of the pandemic.
PART 2 – The "Kurzarbeit" Model in Slovak Business Conditions

To mitigate the negative impact of COVID-19 on employers, the Ministry of Labour, Social Affairs and Family of the Slovak Republic has adopted some further measures.

Firstly, economic aid is now also available for big businesses whose operations have been closed due to the pandemic since the maximum limit for contributions in the amount of EUR 800,000 per employer has been cancelled. Employers (including self-employed with employees) may apply for a contribution for salary compensation of an employee in the amount of his/her average salary, in the maximum amount per employee of EUR 1,100, if the employer’s business operations have been closed due to a decision of the Public Health Authority of the Slovak Republic.

  • In case the employer pays salary compensation to employees in the amount of more than 80% of their average salaries, the employer is entitled to a contribution from the state in the sum of EUR 1,100 per employee at maximum.
  • In case the employer pays salary compensation to employees in the amount of less than 80% of their average salaries, the employer is entitled to a contribution from the state in the sum of EUR 880 per employee at maximum.

Secondly, self-employed persons whose operations have been closed, or whose turnover has been decreased as opposed to the same period in 2019, may apply for the contribution relating to the extent of the decrease in their turnovers.

  • The contribution amount varies depending on the decrease in turnover:

Turnover decrease

March 2020

Turnover decrease

April 2020 Turnover decrease

less than 10%

EUR 0

less than 20%

EUR 0

from 10% to 19.99%

EUR 90

from 20% to 39.99%

EUR 180

from 20% to 29.99%

EUR 150

from 40% to 59.99%

EUR 300

from 30% to 39.99%

EUR 210

from 60% to 79.99%

EUR 420

more than 40%

EUR 270

from 80%

EUR 540

Thirdly, employers (including self-employed who are employers) may apply for a contribution to the salary of an employee, if the employee’s position is retained during the pandemic. When applying, the employer may choose between the following options:

a. "Kurzarbeit"

  • A contribution to a salary of an employee to which the employer may not assign working tasks due to restraint on the employer’s side (as a result of the COVID-19 pandemic), in the maximum amount of 80% of his/her average salary, the maximum amount is set at EUR 880.
    • For an employer paying the salary compensation to employees in the amount of less than 80% of their average salaries, the salary compensation actually repaid shall be taken into account at reimbursement for the respective period, and the maximum amount is set at EUR 880.
    • For employers paying the salary compensation to employees in the amount of more than 80% of their average salaries, the salary compensation actually repaid shall be taken into account at reimbursement for the respective period, and the maximum amount is set at EUR 880.

b. Fixed contribution to an employees’ salary

  • This contribution shall be paid per every employee according to the extent of the decrease in the employer’s turnover (upon the condition that the employee did not conduct work due to restraints on the employer’s side of more than 50% of his/her working time or the employee did not take his/her holiday):

Turnover decrease

March 2020

Turnover decrease

April 2020

less than 10%

EUR 0

less than 20%

EUR 0

from 10% to 19.99%

EUR 90

from 20% to 39.99%

EUR 180

from 20% to 29.99%

EUR 150

from 40% to 59.99%

EUR 300

from 30% to 39.99%

EUR 210

from 60% to 79.99%

EUR 420

more than 40%

EUR 270

more than 80%

EUR 540

Finally, one-person limited companies, self-employed persons who did not pay their contributions into the Social Insurance Agency, and persons conducting work on the basis of agreements other than employment contracts, may apply for economic aid consisting in the contribution in the amount of EUR 105 for March, and EUR 210 for April and May, under the condition their working relationships are not terminated.


[1] Act No. 75/2020 Coll. Full text available here - https://www.slov-lex.sk/pravne-predpisy/SK/ZZ/2020/75/20200409

[2] Act No. 75/2020 Coll. Full text available here - https://www.slov-lex.sk/pravne-predpisy/SK/ZZ/2020/75/20200409

[3] Act No. 96/2020 Coll. Full text available here - https://www.slov-lex.sk/pravne-predpisy/SK/ZZ/2020/96/20200425

[4] Act No. 96/2020 Coll. Full text available here - https://www.slov-lex.sk/pravne-predpisy/SK/ZZ/2020/96/20200425

[5] Act No. 96/2020 Coll. Full text available here - https://www.slov-lex.sk/pravne-predpisy/SK/ZZ/2020/96/20200425

[6] Act No. 96/2020 Coll. Full text available here - https://www.slov-lex.sk/pravne-predpisy/SK/ZZ/2020/96/20200425

[7] Act No. 96/2020 Coll. Full text available here - https://www.slov-lex.sk/pravne-predpisy/SK/ZZ/2020/96/20200425

[8] Act No. 96/2020 Coll. Full text available here - https://www.slov-lex.sk/pravne-predpisy/SK/ZZ/2020/96/20200425