Ing. Milan Šaran
Tax Advisor
Are you required to submit a notification for the financial transaction tax (a tax return for the transaction tax)?
In certain specific cases, business entities are not only taxpayers but also payers of the financial transaction tax. If a legal entity or sole trader (self-employed person) carries out a transaction during a given month that makes them a payer of the financial transaction tax, they are required to submit a so-called Notification of the Financial Transaction Tax (hereinafter referred to as the “Notification”) for the relevant calendar month.
The following text summarizes the most common situations in which a business entity may become not only a taxpayer of the financial transaction tax (hereinafter also referred to as “FTT”), but also a party obligated to declare, calculate, and pay this tax.
Bank account established with a financial institution or payment service provider based outside the Slovak Republic
If you use a “foreign” bank account in the course of your business activities, and the FTT is not withheld and paid by your bank or a Slovak-licensed payment service provider (i.e., the FTT is not automatically deducted and remitted by your financial institution), you are required to calculate the tax yourself for each transaction subject to FTT, declare the amount in the Notification, and pay the FTT.
The same rules apply when using payment service providers such as Revolut, Wise, and similar operators, just as with bank accounts held with financial institutions.
If you transfer funds between different sub-accounts within your Revolut (Wise) account, such transactions are not subject to FTT.
If you use a payment card issued for your Revolut (Wise) account, only an annual flat fee of EUR 2 applies, and individual transactions made using the payment card are not subject to taxation.
However, if you transfer funds to a bank account held with another payment service provider, or if you use your Revolut (Wise) account to settle liabilities or expenses, the FTT obligation arises, and the account holder becomes both the taxpayer and the tax remitter.
In such cases, you are also required to calculate the FTT amount yourself, declare it in the Notification, and pay the tax.
Payments of your liabilities by a third party and their subsequent reimbursement
“Group-wide” purchases and allocation of related costs to individual group companies
Have you entered into an agreement with another entity under which that entity pays your liabilities to third parties, and you subsequently reimburse those payments in some form and at certain intervals?
Does the parent company carry out a purchase on behalf of the entire group and then proportionally allocate the incurred costs to each of the group companies? (For example, the parent company purchases software licenses for the group, and later recharges the portion corresponding to your organization’s license count.)
These are also situations in which you become a payer of the Financial Transaction Tax (FTT) and are required to prepare and submit the Notification.
The FTT obligation arises in the month in which such so-called reallocated costs are paid.
Note: In the case of re-invoicing (recharging) of costs, this does not qualify as a cost reallocation, and is not subject to FTT on its own.
Receiving payments through a payment gateway
Do you receive funds via a payment gateway (for example, when customers of your e-shop pay for goods or services by card), and the funds are credited to your payment gateway account?
If the funds “collected” in your payment gateway account are used directly to settle your financial obligations (e.g., paying supplier invoices), such transactions are subject to the FTT, and you are required to submit the Notification and pay the FTT.
If, however, you transfer the funds from the payment gateway account to a Slovak bank account, such a transfer should not be subject to FTT. Please note: As the relevant authorities have not yet issued clear guidance on this matter, we recommend monitoring this point closely if it applies to your situation.
Company expenses paid by shareholders, executives and employees
If a shareholder, executive, or employee pays company expenses (liabilities) for any reason, which are subsequently reimbursed by the company, the following rules apply.
If the shareholder, executive, or employee uses a private payment card to make the payment, the transaction itself is not subject to FTT.
However, the reimbursement of the expense by the company from its bank account is subject to FTT.
If the shareholder, executive, or employee settles a company expense by transferring funds from their private bank account, such a transaction is subject to FTT as a so-called reallocated cost.
The above summary of situations in which you may become a payer of the FTT is not exhaustive. We also note that the interpretation of the legislation is constantly evolving (it is difficult to say whether it is becoming more precise), and therefore some conclusions presented in this text may change.
We therefore recommend that you individually consult specific cases in case of any uncertainties or doubts.
If you become a payer of the FTT, i.e., an entity required to declare, calculate, report in the Notification, and pay the tax, no special registration for this purpose is necessary. The usual deadline for submitting the Notification and paying the FTT tax liability is by the end of the month following the month in which the FTT tax liability arose.
The above information on this website is intended to give you a basic overview of tax, accounting and legal regulations. It is in no way intended as a guide to their application in practice, which may differ significantly from the legislation in force at any given time. The information on this website does not guarantee legal, accounting, tax or other professional advice or services. As such, the information should not be taken as a substitute for professional consultation with accounting, tax, legal or other advisors. EMINEO PARTNERS shall not be responsible or liable for any discrepancies, omissions or results obtained from the use of this information. All information and examples are provided without any warranty as to their applicability in practice. EMINEO PARTNERS is not obliged to reflect the applicable legislation on the information and examples provided on this website.
