Financial Transactions Tax — New Rules Starting in 2025
Starting April 1, 2025, a new financial transactions tax (FTT) will come into effect, marking an important legislative innovation in Slovakia. This tax is part of government measures aimed at fiscal consolidation and is focused on taxing specific financial transactions. The goal is to increase revenue for the national budget, with an expected annual income of around 750 million euros.
Below is detailed information about the FTT, including the taxable object, rates, exemptions, and taxpayer obligations.
Key Terms:
- Financial Transaction: Includes transfers of funds between accounts, use of payment cards, or withdrawals of funds. The tax applies to transactions where funds are debited from an account.
- Taxpayer:
- Individual entrepreneur
- Legal entity
- Organizational structure of a foreign entity conducting financial transactions within Slovakia
- Taxpayer: Providers of payment services, foreign organizations offering services in Slovakia, or organizations that incur expenses related to financial transactions.
Reporting and Tax Payment
Tax Period:
- Calendar month for most transactions.
- Calendar year for fees related to the use of payment cards.
Reporting Method:
- Taxpayers are required to submit an electronic tax return by the end of the month following the completion of the tax period.
Tax Payment:
- The first payment for the period from April to June 2025 must be made no later than July 31, 2025.
Optimization Options
Companies can take steps to minimize their tax liabilities, such as:
- Payment Consolidation: Combining multiple transactions into one can reduce the number of taxable operations.
- Cash Withdrawal Limitation: A higher rate (0.8%) applies to cash withdrawals.
- Use of Internal Transfers: Transactions between own accounts within the same provider are exempt from the FTT.
Impact on Entrepreneurs and Citizens
The introduction of the FTT creates additional costs for both businesses and individuals, with those who frequently conduct large financial transactions being the most affected. On the other hand, its implementation aims to increase revenue for the national budget and enhance the transparency of financial flows.
Entrepreneurs should timely adjust their financial processes, ensure compliance with the new rules, and consult a tax advisor.