Lex Corona

On 2 April 2020, the Slovak Parliament passed the government’s proposal called Lex Corona, which covers three areas: taxes, financial market, and budgetary rules. The aim of this law is to help and protect taxpayers, entrepreneurs, and SMEs from the economic consequences of the pandemic.

The legislation at issue provides a special period – the pandemic period – during which the stipulated measures apply. This period is temporary and is set for the period from the date of the declaration of the state of emergency, i.e. 12 March 2020, until the end of the calendar month when the Government of the Slovak Republic recalls the state of emergency.

The following measures have been adopted in the tax field:

1. Extension of the statutory deadlines until the end of the calendar month following the month in which the pandemic period ended

This measure applies to the filing of income tax returns in the following cases:

• The deadline for the filing of income tax returns for the 2019 taxation period, the last day of which falls during the pandemic period.
• The taxpayer’s accounting period, i.e. the financial year, ends during the pandemic period.
• The taxpayer is in bankruptcy or liquidation.
• The taxpayer filed a request for extension of a deadline for filing a tax return until 30 June 2020 or 30 September 2020.
• The deadline for filing a deceased taxpayer’s tax return expires during the pandemic period.
• The deadline for the filing of a tax return of a taxpayer who is dissolving a permanent establishment in the territory of the Slovak Republic expires during the pandemic period.

The extension of the deadlines until the end of the calendar month following the month in which the pandemic period ends applies also in cases where the following deadlines fall on the pandemic period:

• Deadline for notifying about withholding and payment of income tax of healthcare providers.
• Deadline for the filing of a tax return of those taxpayers who became liable under the Motor Vehicle Tax Act to file a tax return for a period other than an annual accounting period. This applies to taxpayers who are wound up without liquidation, with liquidation, who have been declared insolvent, who closed or suspended business activities or to persons who are filing a tax return within three months following the month in which the taxpayer deceased.
• Deadline for annual settlement and calculation of employees’ income tax.

The deadline for the filing of a tax return of taxpayers or for notifying about withholding and payment of income tax of healthcare providers and the deadline for payment of taxes in such cases shall be considered complied with if such filing or notification is submitted by the end of the calendar month following the month in which the pandemic ends, i.e. no later than by the end of the calendar month following the month in which the Government of the Slovak Republic recalls the state of emergency.

2. Postponement of the statutory deadline for submitting a report on tax settlement until the end of the second calendar month following the end of the pandemic situation

Due to the declaration of a pandemic, the employers’ deadline for submitting a report on tax settlement shall also be extended until the end of the second calendar month following the end of the pandemic period. A statement of assignation of the proportion of paid income tax of taxpayers shall also be submitted in this specified period. The annual settlement and calculation of income tax shall be made by the employer by the end of the calendar month following the end of the pandemic period.

3. Extension of accounting deadlines

The deadlines to be met by the entities during the pandemic period shall be extended, as well as the obligations to keep the accounting documents in the register of accounts until the end of the third calendar month following the end of the pandemic situation or the expiry of the deadline for filing a tax return, whichever is earlier.

4. Measures concerning the use of funds obtained from a tax assignment during the pandemic period – third sector

During the pandemic, the beneficiaries of the proportion of the paid tax may also use the funds obtained from the tax assignment in order to help and mitigate the negative consequences of the pandemic.

5. Relief from customs duties and VAT on goods imported for the benefit of disaster victims.
6. Non-updating of lists (during the pandemic) of tax debtors and VAT payers who have breached their obligations – non-payment of tax, cancellation of VAT registration.
7. Interruption of tax audits and tax proceedings (even retroactively), except for those that result in the repayment of funds (audits on excessive deductions, tax assessment procedure on tax overpayment)
8. Deferral of tax execution.
9. Forgiveness for missing a deadline laid down by law without an application if the taxpayer performs a missed action no later than by the end of the calendar month following the end of the pandemic period.
10. Relief from payment of administrative fees for actions carried out as a result of the pandemic.
11. Coordination of the delivery method with new mail rules.

In the field of financial markets, financial assistance is being introduced to support operations in small and medium-sized enterprises. Under this measure, financial assistance is provided through institutions, such as the Export-Import Bank of the Slovak Republic and the Slovak Guarantee and Development Bank a.s., in the form of a guarantee for a loan provided by a bank and the payment of interest on a loan provided by a bank – “interest subsidy”.

Measures in the field of budgetary rules will also apply to municipalities, which will be able to use finances from reserve funds, capital revenues, and loans for their current expenditure, e.g. until the end of 2021.

The Act can be read in full in the following document:

Act on Certain emergency measures in the financial field in relation to the spread of the dangerous and contagious disease COVID-19