A number of changes regarding the payment of advance corporate income tax payments took effect 1 January 2020 and are summarised below:
- The lower threshold for paying quarterly advance tax payments rose from €2,500 to €5,000.
- All calculations are rounded to two mathematical decimal places effective 1 January 2020.
- A change was made to the procedure for calculating advance tax payments following the changes made in §42 (6) and (7) of the Income Tax Act:
“Tax for the previous tax year is understood as the tax calculated from the tax base less the deductible tax loss specified in the tax return for the tax year immediately preceding the tax year for which advance tax payments are made, while applying the tax rate pursuant to §15 of the Income Tax Act as specified in the tax return filed for the tax period immediately preceding the tax year for which advance tax payments are made reduced by any tax relief specified hereunder” (§42 (6) of the Income Tax Act).
Effective 1 January 2020, the calculation of advance tax payments until the filing of the tax return uses the tax rate valid in the tax year immediately preceding the tax year for which advance tax payments are made (until 31 December 2019, the tax rate valid in the tax year in which the advance payments were actually paid was used). As of 1 January 2020, tax is only reduced by the tax relief provided under the Income Tax Act, while until 31 December 2019, the tax was reduced by other items: a set-off for taxes paid abroad and withholding tax (§43 of the Income Tax Act”) were considered advance payments.
| Advance tax payment calculation until 31 December 2019 | Tax calculation for the previous tax year effective 1 January 2020 |
| tax base less the deductible tax loss (row 500) × tax rate valid in the tax year for which advance payments are made (21%)
reduced by: – tax relief under the Income Tax Act (row 610) – set-off for tax paid abroad (row 710) – withholding tax set-off as an advance payment (row 1030) = tax for the preceding tax year (row 1110) | tax base less the deductible tax loss (row 500) × tax rate valid in the tax year: for advance payments paid until the 2019 tax return filing deadline – tax rate valid in 2018 – 21% for advance payments paid after the 2019 tax return filing deadline – tax rate valid in 2019 – 21%
reduced by: – tax relief under the Income Tax Act (row 610) – (rows 710 and 1030 no longer included) = tax for the preceding tax year (row 1110) |
the payment of advance tax payments is laid down in §42 of the Income Tax Act:
- by the tax return filing deadline, in which the tax for the previous tax year will be specified based on the last known tax obligation and
- after the tax return filing deadline based on the tax for the previous tax year.
The payment of advance tax payments until the tax return filing deadline (from 1 January 2020 to 31 March 2020) or an extension to the 2019 tax year is based on the last known tax obligation as specified in the tax return for the 2018 tax year, which effective 1 January 2020 is calculated as follows:
row 1110 = (row 500 × 21%) – row 610 of the tax return for the 2018 tax year
Attention! Taxpayers may not use the tax paid in row 1110 of the 2018 tax return to define the amount of advance tax payments until the filing of the tax return as this amount was calculated under §42 of the Income Tax Act valid until 31 December 2019 as follows: (row 500 x 21%) – (row 610 + row 710 + row 1030). Advance tax payments were also rounded down to the nearest cent.
Advance tax payments in the 2020 tax year due after the 2019 tax return filing deadline, meaning after 31 March 2020, are calculated using the tax from the preceding tax year as follows:
row 1110 = (row 500 × 21%) – row 610 of the tax return for the 2019 tax year
- Effective 1 January 2020, the amount of advance payments for newly established taxpayers shall be settled by the end of the calendar month following the tax return filing deadline (until 31 March 2019, all such entities were obliged to settle their advance payments by the tax return filing deadline.
- Under the transitional provisions of §52 zza (21) of the Income Tax Act, these changes are applicable to the payment of advance tax payments effective 1 January 2020.
The methodology instruction for payment of advance corporate income tax payments (in Slovak only) is available at:
Advance personal income tax payments – entrepreneurs
The advance tax payment limit for trade license holders increased to €5,000 while the calculation of the advance tax payments under the regulations in force until 31 December 2019 is applicable until the beginning of the advance tax period in 2020 (i.e. until 31 March 2020). This means that the changes regarding the calculation of advance tax payments effective 1 January 2020 are enforced after the tax return filing deadline.
Under the new regulations, the last known tax obligation for calculating the advance tax payments is understood as the tax calculated from the partial tax base determined from income pursuant to §6 (1) and (2) less the deductible tax loss reported on the most recent tax return. The tax rate of 19% is always used to calculate advance tax payments.
Last known tax obligation = (Tax base §6 (1) and (2) – Deductible tax loss) × 19%
Effective 1 January 2020 (given the changes implemented in Act No. 301/2019 Coll.), the amount of the last known tax obligation does not influence the structure of the taxpayer’s tax base.
Income from gainful activities under §5 of the Income Tax Act, rental income under §6 (3) of the Income Tax Act and income from the use of works and artistic performances under §6 (4) of the Income Tax Act are eliminated from the calculation effective 1 January 2020. The amount of the last known tax obligation will no longer include the amount of the deduction recognised under §11 (2) of the Income Tax Act or the tax bonus for a dependent child or children under §33 of the Income Tax Act. In calculating the last known tax obligation, the progressive rate valid in the tax year in which the advance tax payments are made is not applied.
Last known tax obligation (until 31 March 2020) = [Tax base §5 + (Tax base§6 (1) and (2) – deductible tax loss) + Tax base §6 (3) and (4)] × Tax rate
The methodology instruction for payment of advance personal income tax payments from the beginning of the advance payment period in 2020 (in Slovak only) is available at:
