What is the Slovak tax license?

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The tax license represents a minimum tax that commercial companies are obliged to pay, regardless of whether they generate income or not. If a company did not conduct any economic activity or record any income for the entire year 2024, it is still required to pay the tax in the form of a license. This obligation is essentially a tax for owning a company and can be considered a form of property tax.

The tax license is not derived from profit generation, but rather from the mere existence of the company. For example, an entrepreneur who owns a company without any income will pay a minimum tax of 340 euros per year.

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Who does the Slovak tax license apply to?

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The tax license primarily applies to legal entities, i.e., commercial companies such as s.r.o. (limited liability companies) or a.s. (joint-stock companies). However, there are certain exceptions:

• Companies employing disabled individuals are exempt from this tax.
• It does not apply to civic associations or non-profit legal entities.
• The tax license also does not apply to sole traders.
• Newly established companies founded during 2024 are exempt from this obligation for their first year of existence.

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What are the Slovak tax license rates and when is it due?

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The amount of the tax license depends on the company's turnover and is divided into four categories based on the company's turnover:

• Turnover up to €50,000: The tax license amount is €340.
• Turnover from €50,001 to €250,000: The tax license amount is €960.
• Turnover from €250,001 to €500,000: The tax license fee is €1,920.
• Turnover over €500,000: The tax license fee is €3,840.

The tax license fee is due by March 31, 2025, however, this obligation can be postponed until the end of June 2025 if the company defers its tax return submission.

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How can you avoid the Slovak tax license fee?

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The most effective way to avoid paying the tax license fee is to cease business operations through company liquidation. For this, the company must:

1. Decide to enter liquidation.
2. Register this step in the Commercial Register by December 31, 2024 at the latest.

It is important to emphasize that merely deciding on liquidation is not enough. It is crucial that the entry of the liquidation in the Commercial Register is completed by the specified deadline.

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Why not postpone liquidation?

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When it comes to the liquidation process, the sooner it begins, the better. The Commercial Register may experience a high volume of submissions towards the end of the year, which could extend the time required for the liquidation entry. If a company submits a proposal for liquidation entry in November or December, there is a high risk that this process will not be completed by the end of 2024, and the company will have to pay the tax license fee for 2025.

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Conclusion

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If you own a debt-free company that no longer plans to actively operate, liquidation is the best solution to avoid the tax license. However, it is necessary to act promptly and ensure that the entry into liquidation is registered in the Commercial Register by the end of 2024.

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