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Dividend Tax in Slovakia

Dividend Tax in Slovakia

The dividend tax in Slovakia refers to the levy due to the Slovak government which is gained by company shareholders. A dividend basically represents a payment made by a company to its shareholders, generally as a profit distribution.

Last year, the Slovak government adopted a new tax legislation which brought certain changes to the tax regime in the country. According to these new laws, starting with the 1st of January 2017, the dividend tax in Slovakia is 7% on paid dividends.

More details on the dividend tax in Slovakia

Last year, namely in 2016, the dividends were not taxed in this country. Private individuals, though, who resided in Slovakia and received dividends, had to acquit a certain percentage to the health insurance company.

Dividends resulted from profits earned before the 1st of January 2004 were taxed with a standard rate of 22%, with the exceptions where the rules related to the EU Parent-Subsidiary Directive were implemented. 

In the present, the payment to the health insurance is annulled and the dividend tax in Slovakia applies to all entities, either private individuals or businesses, no matter if they are local or foreign.

The 7% dividend tax in Slovakia is applied when distributing profits for the tax period beginning on the 1st of January 2017. It therefore does not apply to retroactive dividends. Our law firm in Slovakia can offer more details on this matter.

This newly introduced dividend taxation in Slovakia is applied to residents from countries which have not signed a double tax treaty or an agreement on the exchange of information for taxation with Slovakia.

We can assist companies to register for Slovakia VAT.

How the new dividend tax affects the business climate in Slovakia

In the past, it was quite obvious that the contribution for the health insurance deriving from dividends was only an introductory measure leading to a more substantial dividend taxation. The good news for the foreign investors is that the implementation of the dividend tax in Slovakia was compensated by a minimization of the corporate income tax, from 22% to 21%. Our solicitors in Slovakia can provide further information on the corporate taxation in this country.

If you need to know more about the dividend tax in Slovakia, as well as legal advice regarding taxation, company formation and other services here, we kindly invite you to get in touch with Slovak lawyers.