POTENTIAL OFFSHORE COMPANY TAX INCREASE - UPDATE (DECEMBER 12, 2013)

Last month we told you about the proposal to amend the Slovak Income Tax Act (see http://www.bargerprekop.com/resources/potential-offshore-company-tax-increase-november-12-2013/). The amendment was approved by the Parliament and awaits the signature of the President.

The Parliament’s Financial Committee made several suggestions to the amendment which were approved by the Parliament. Following are the highlights:

• States that are not subject to the offshore company tax will be listed on the website of the Ministry of Finance of the Slovak Republic. If a country is not listed, it is an “offshore country” and the offshore company tax shall apply.

• All EU and the European Economic Area states as well as the counterparties of Slovakia to treaties on double taxation and tax information exchange will be on the list.

• The 35% offshore company tax rate will be applied to both monetary revenues and in-kind revenues, such as bartering or other non-monetary payments.

The amendment is scheduled to become effective on March 1, 2014.