Slovak Rep.: Insurers will pay the special levy on business at a double rate, but lower corporate taxes

The Slovak Government and Parliament made several changes to the tax system with effect from 1 January 2017, some of them affecting also the local insurance companies, as well as their foreign shareholders. The recently adopted amendments concern - among others - corporate and personal income tax, value added tax, special levy in regulated industries, as well as social security and health insurance contributions, reads a Kinstellar report published by the Lexology portal.

Among the changes mentioned by the report, there are:

Special levy on businesses in regulated industries, including the insurance business

The rate of the special levy on businesses in regulated industries (energy, telecoms, public health insurance, etc.) doubles as of 1 January, to 0.726%. This rate should be lowered to 0.545% in 2019 and to 0.363% in 2021.

As a result regulated entities with a trading income exceeding EUR 3,000,000 will pay a levy calculated as a percent of their trading income, further multiplied by the levy rate. The levy is not paid unless it exceeds EUR 1,000 in the relevant month. The new calculation mode is applicable since January 1st, 2017.

"Under the previous law, a regulated entity had to pay the levy only if its turnover from regulated activities was at least 50% of its total turnover. In addition, the levy was paid on trading income above EUR 3,000,000 and was calculated by reference to all trading income rather than a coefficient," underlines the Kinstellar report.

Corporate tax

The corporate tax rate will decrease by 1 pp, from 22% to 21%, starting with the fiscal year 2017. The previously announced abolishment of so-called 'tax licences' (i.e. the minimum tax payable even if a company declares zero profit or loss) was postponed to 1 January 2018.


Taxation of dividends also changes significantly as of 1 January 2017, but not for profits generated before that date. Thus, dividends paid out of profits generated in prior fiscal years will continue to be subject to the old regime, even if paid to shareholders after 1 January.

The new regime abolishes the 14% health insurance contribution on dividends received by individuals. Instead, the following tax rates will apply:
  • No tax: dividends paid/received by legal entities resident in Slovakia or in a treaty state;
  • 35% tax: dividends paid to legal entities or individuals resident in a non-treaty state or dividends received by Slovak residents from a legal entity in a non-treaty state;
  • 7%: dividends paid to individuals resident in Slovakia or in a treaty state or dividends received by individuals resident in Slovakia from a treaty state.
'Treaty states' are listed on the Ministry of Finance website, namely states that have signed a double taxation treaty or similar with the Slovak Republic.

Minimum wage

As of 1 January the monthly minimum wage is increased from EUR 405 to EUR 435, i.e. EUR 2.5 per hour.

For more details and the full version of the report, access

Related articles

SLOVAK Rep.: Increasing insurance taxation is raising hauliers' discontent

The Slovak government's decision to extend the 8% tax, previously applied only to the MTPL insurance premiums, to all the facultative non-life insurance lines has raised not only insurers' discontent, but also a negative reaction of CESMAD - the Association of Road Transport Operators of the Slovak Republic. In short, Slovak hauliers blame the recent change in taxation for the sharp increase in the mandatory motor insurance prices.




FIAR 2018 - Motor Insurance Conference (I & II): with the right use of technoloogy, clients' expectations and MTPL insurer's profitability may go hand in hand

The first and second parts of the Motor Insurance Conference taking place at FIAR 2018 focused on the new MTPL Law in Romania and the way it changed the market after almost 1 year of implementation, as well as the consequences of the new legislative framework and the operational challenges this brings, but also the most suitable solutions for balancing regulation, insurers' appetites and customer expectations on the MTPL market.


FIAR 2018: Brokers' Conference (II): digitization and technology are needed for efficient operations, but will not replace the human touch in consultancy

The second part of the Brokers' Conference taking place at FIAR 2018 analyzed the impact of European Union's legislative overhaul - IDD & GDPR -, also bringing into debate study cases and real-life scenarios of what the brokers face on the market, and, last but not least, trying to see whether digitization and InsurTech could truly lead to disintermediation.


Brokers' Conference (I): Until 1 July, when we will see the final version of the IDD, we cannot say for certain if we are ready and how ready we actually are

The second day of debates at FIAR 2018 started with The Brokers' Conference, the event dedicated to the mediation market in Romania and in the CEE region. The first part of the conference focused on a market overview and also analyzed the challenges of the IDD implementation, as well as the potential impact of IPID for MTPL and PAD.


INSURANCE IN A DIGITAL WORLD Conference: capacity, consistency and culture are the three key success factors in the digital transformation of insurers

The INSURANCE IN A DIGITAL WORLD Conference, taking place at FIAR 2018, brought into debate the impact of digitization on the insurance industry. The first part of the conference focused on risks & opportunities of digitalization for both industry and consumers, as well as case studies and best practices: BigData & IoT, BlockChain, Peer-to-Peer, and AI.


Insurance Market Trends Conference (II): GDPR and IDD, European regulations affecting all business lines, as well as the compliance with the Solvency II framework, are the main challenges ahead for the Romanian market

During the second part of the Insurance Market Trends Conference, taking place at FIAR 2018, the debates focused on the current situation in Romania and the sustainable development for a growing and stable insurance market, as well as the challenges and opportunities for the local insurers.


See all