On 27 January 2021, the Slovak government approved a draft amendment of Act No. 67/2020 on certain emergency measures in the financial area in relation to the spread of COVID-19 (also dubbed “Lex Corona”). The aim of the present amendment is to help taxpayers affected by the economic measures adopted during the pandemic by including expenditure incurred for COVID‑19 testing in tax expenses and alleviating the eligibility criteria for tax bonus during the pandemic.
Alleviation of the Eligibility Criteria for Tax Bonus during the Pandemic
The proposed amendment is aimed at employees and taxpayers with income from business or other self-employment activities who were unable to carry out their professional activities due to the anti-pandemic measures and whose income has not reached the statutory limit for eligibility for the tax bonus. These taxpayers were paid contributions by the state as part of the anti-pandemic measures in the form of pandemic sickness insurance, nursing benefits, contributions provided through active labour market measures, and subsidies for workers employed in the cultural sector. This income was exempt from income tax, as a result of which the taxpayers became ineligible to receive the dependent child tax allowance.
In connection with these exemptions, Section 24aa(1) of the draft Act shall regulate the eligibility criteria for tax bonus in order to include the following income in the taxable income:
a) benefits provided through active labour market policy,
b) subsidies provided by the Ministry of Culture of the Slovak Republic for workers in the cultural sector,
c) sickness benefits received on the grounds that the employee has been declared temporarily unable to work due to an imposed quarantine measure or isolation under a special provision,
d) nursing benefits received under a special provision.
The procedure for including such income in taxable income may only be applied by taxpayers who, for the purposes of applying the tax bonus, do not meet the eligibility criteria for taxable income amounting to at least six times the minimum wage.
The procedure for including the following specifically defined exempt income in taxable income shall apply to the taxpayers with income:
- earned from business or other self-employment activities
- referred to in paragraph 1(a)(b), i.e. contributions received through active labour market policy and subsidies provided by the Ministry of Culture of the Slovak Republic that were demonstrably received and entered in the accounts of taxpayers, registered in the tax records of taxpayers or registered in the records of taxpayers from 1 January 2020 to 31 December 2020,
- referred to in paragraph 1(c)(d), i.e. nursing benefits and sickness benefits declared and demonstrably received from 1 January 2020 to 31 December 2020,
- earned from income from employment demonstrably received for the 2020 tax year running until 31 January 2021 at the latest.
If the employees do not meet the eligibility criteria for taxable income for the purposes of applying the tax bonus and their income has not reached the amount referred to in paragraph 1, they shall be obliged to inform the employer by 15 February 2021 of the amount of income received for the purpose of its inclusion in order to receive the tax bonus. The aforementioned shall only apply if the employees have requested an annual clearance.
