Financial institutions (banks, branches of foreign banks, building societies and other entities covered by the Act on automatic exchange of financial account information for the purpose of tax administration and on amendments to certain laws) have been required since 1 January 2016 to determine and report the tax residence of their customers to the Slovak Republic Financial Administration.
This regulation was adopted by the OECD to tackle tax evasion on a global level. This is the solution endorsed in FATCA, US legislation which mandates the sharing of information for tax purposes between OECD member countries on income in the financial accounts of member country residents. Slovak financial institutions covered by the law will be providing information about holders of financial accounts, such as account number, balance in a financial account or the value of the financial account and, where appropriate, also total gross revenues attributable to the account.
FATCA deadlines:
· 30 June 2016 – tax authorities are supposed to receive information from banks and financial institutions for 2014 and 2015;
· 30 September 2016 – tax authorities are supposed to provide information to the US Internal Revenue Service
The Slovak Republic is among the countries that have signed up for automatic exchange of information. In practice, this means financial institutions in the EU (and also in many other countries) have been required since 1 January 2016 to determine the tax residence of their customers in compliance with prescribed procedures and, starting in 2017, they will be each year reporting the data they obtain (from the previous year) to competent government authorities. An exemption has been granted to Austria, which received a year’s postponement in comparison to other member countries.
