The Slovak government is introducing a transaction tax, or financial transaction tax, in Slovakia from 1 April 2025, which will affect all business entities. This step was adopted by the government at the 19th parliamentary session as part of consolidation measures to improve public finances. Since it will also affect payments made for the purchase, sale or rental of real estate, we bring you a brief summary of what the transaction tax means in practice.
Basic information about the transaction tax
- Tax rates:
- 0.4% on non-cash transactions, maximum €40 per transaction
- 0.8% on cash withdrawals, no upper limit
- €2 per year for each payment card used (debit or credit)
- Tax validity:
- The legislation came into effect on 1 January 2025
- The first tax period starts in April 2025
- Aim:
- The government expects to generate €700 million in revenue per year, which it will use to reduce the national debt
Who is paying the transaction tax?
- Transaction tax will be paid by legal entities and podnikatelia, vrátane živnostníkov (SZČO)
- Employees and individuals are not burdened by this tax, but entrepreneurs can pass these costs on to final consumers and thus indirectly increase the prices of goods and services
- New legislation obliges entrepreneurs to have a business account, which they must set up by 31.3.2025
How the financial transaction tax works
- For non-cash payments by business entities, 0.4% of the amount not exceeding €40 per transaction will be deducted
- Eg. for an amount of €1,000, a tax of €4 will be paid
- For cash withdrawals, the rate is 0.8% without a boundary
- Eg. for a withdrawal of €1,000, the entrepreneur will pay a tax of €8
- The tax period will be each calendar month. This does not apply to the tax for the use of a payment card, where the tax period is the calendar year. Taxpayers must calculate the tax, collect it from the taxpayer and remit it to the tax administrator by the end of the following month.
Tax exemptions for transaction tax
Transactions that are not subject to tax include:
- Payments to the state: taxes, levies, contributions to the Social Insurance Agency and health insurance
- Transfers between own accounts in the same bank
- Transfers to the second and third pillars of pension provision
- Purchases of securities through a merchant
- Payments through the Slovak Post Office
- Housing-related payments (e.g. maintenance and repair fund)
Impact on the real estate market
Real estate entrepreneurs will also feel the importance of the transaction tax, especially when:
- Invoice payments: for the purchase of materials, services or energy
- Loan repayments: mortgage or other real estate loan repayments are subject to this new tax
- Real estate rentals : owners can also pass on the new fees to rental prices
How can you mitigate the impact of this tax on your expenses?
- Optimize transactions: Merge payments to minimize the number of transactions
- Use payment cards: Card payments are exempt from this tax, so use them wherever possible
- Understand exceptions: Identify payments that are exempt from tax and take advantage of these options
- Communicate with customers: Be transparent about how these costs can affect the final price of services
Bonus
I would be happy to help you with your specific situation if you are planning to buy, sell, or rent a property. Contact me today a spoločne nájdeme to správne riešenie.