Amendment of the Act No. 530/2023 Coll., which amends certain acts in connection with the improvement of the state of public finances, it should not be forgotten that there is a new obligation for legal entities for the tax period 2024 in the form of – minimum tax of a legal entity.
As the minimum tax applies to both profit and loss making corporations, we bring You with a detailed overview of the minimum tax conditions for the year 2024.
▢ Determination of the minimum tax
The minimum tax is defined as a tax after the deduction of allowances (investment aid and tax incentives), credit tax paid abroad which the taxpayer pays for each tax period in which the tax liability calculated is less than the amount of minimum tax.
The amount of the minimum tax depends on the taxable income (revenue) booked by the taxpayer for the tax period as shown in the table below:
| Taxable income threshold for determining the minimum tax | |
| Income up to 50 000 EUR | 340 EUR |
| Income over 50 000 EUR to 250 000 EUR | 960 EUR |
| Income over 250 000 EUR to 500 000 EUR | 1 920 EUR |
| Income over 500 000 EUR | 3 840 EUR |
The minimum tax is also payable by the taxpayer who has reported a tax loss – the minimum tax is payable within the limit applicable for the income threshold (up to EUR 50,000) in the amount of EUR 340.
If the taxpayer registers on average at least 20% of employees consisting of disabled individuals his minimum tax amount is reduced to half as follows:
| Taxable income threshold for determining the minimum tax | |
| Income up to 50 000 EUR | 170 EUR |
| Income over 50 000 EUR to 250 000 EUR | 480 EUR |
| Income over 250 000 EUR to 500 000 EUR | 960 EUR |
| Income over 500 000 EUR | 1 920 EUR |
The minimum tax is payable by the due date for filing the corporate tax return – for the tax period 2024 as follows:
- by the regular tax return deadline of 31 March 2025
- in the extended period of 3 calendar months by 30 June 2025
- for taxpayers with foreign incomes by 30 September 2025
- Minimum tax credit
The minimum tax may be set off against tax liability in subsequent tax periods under the following conditions:
| Tax liability in the tax return | Entitlement to credit | Extinction of entitlement to credit |
| Positive difference between minimum tax and tax liability for 2024 | in max. 3 consecutive tax periods following the period of positive difference | If the tax liability does not exceed the amount of the minimum tax |
| Paid tax prepayments excess the current tax liability | If the positive difference between the paid tax prepayments and the tax liability is refunded or set off against future tax prepayments | |
| Dissolution of the taxpayer without liquidation or entry into bankruptcy | – | Entitlement to credit ceases |
These rules may change depending on the resulting tax liability and the settlement of the overpayment of tax payments for the respective tax period.
▢ Exceptions where no minimum tax is payable
- a newly established legal entity filing a tax return for the first time for the tax period of its establishment (does not apply to successors in title of a taxpayer dissolved without liquidation)
- civic associations, foundations, non-profit organisations and interest associations, political parties, special purpose-oriented organisation and legal persons of public interest
- organisations operating a sheltered workshop or sheltered workplace
- land trusts, where their income from a taxable activity does not exceed EUR 10 000
- a taxpayer who has received notice of the opening of winding-up proceedings (in the tax year in which the company is being wound up)
▢ Impact of minimum tax on foreign legal entities
The new institution of the minimum tax of legal entities also has special impacts on foreign legal entities since they operate in Slovakia through their organisational units (branches) or permanent establishments.
In this respect when assessing the minimum tax, it is necessary to consider whether the foreign legal entity is from a treaty-cooperating or a treaty non-cooperating tax jurisdiction. Therefore we distinguish:
- foreign entities from treaty states (application of the Double Tax Treaty) which tax only income earned from a source in Slovakia and such income is subject to the minimum tax. However the following applies to:
- income which is subject to taxation in Slovakia by means of a tax return
- a Double Tax Treaty does not exempt income from taxation
In relation to the income earned in Slovakia, the following types of foreign legal entities are classified:
| Type of foreign legal entities | Income assessment | Minimum Tax |
| Organisational unit (branch) which is a permanent establishment | Income is taxable in Slovakia | If the tax liability is less than the minimum tax – minimum tax liability |
| Organisational unit (branch) which is not a permanent establishment | Income is taxable in Slovakia | No minimum tax is payable (even if a tax return is filed) |
| Permanent establishment without the existence of an organisational unit (branch) | No revenue is generated | If the tax liability is less than the minimum tax – minimum tax liability |
| Foreign person without permanent establishment and organisational unit (branch) | Income is taxable in Slovakia | Minimum tax liability |
- foreign persons from non-contracting states (Double Tax Treaty do not apply) who file a tax return in Slovakia although they do not earn taxable income – they are obliged to pay the minimum tax when filing the tax return (regardless of the establishment of a permanent establishment).
