Financial Transaction Tax – Update

Dear clients and partners,

As of April 1^st, 2025, a new Financial Transaction Tax Act has come into effect in the Slovak Republic. This tax will impact all entrepreneurs conducting business in Slovakia! To provide you with an overview of its implications for your company and the obligations arising from it, we have prepared a concise summary.

We are happy to analyse your obligations, prepare a tax calculation, assess the possibilities of optimisation at company level or handle your obligations towards the tax office. If you have any questions, please do not hesitate to contact us!

We are here for you,Anna Fábryová & Miroslava Čevanová

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Financial Transaction Tax (FTT)

Starting April 1^st, 2025, a Financial Transaction Tax (FTT) was introduced, which will affect all legal entities and individual entrepreneurs conducting business in Slovakia or holding accounts in Slovak banks.

What is a subject to the FTT?

• Bank transactions/transfers (transaction where funds are debited from the account) – 0.4 % of each transaction, up to a maximum of EUR 40.00;
• Cash withdrawals (at ATMs and at bank branches)- 0.8 %, no limitations;
• Amount of overcharged expenses – in the amount of 0.4 %, no limitations, if the taxpayer does not identify individual transactions;
• Amount of a certain (overcharged) transaction – in the amount of 0.4 %, up to a maximum of EUR 40.00, if the taxpayer identifies individual transactions;
• Use of a payment card – one-off fixed annual fee of EUR 2.00 in case of use of a payment card.

Certain selected transactions are not subject to tax, such as the payment of taxes and levies to the Treasury, intra-bank transfers between accounts within the same bank, credit card transactions (excluding cash withdrawals), automated cash pooling with a single provider where the companies are part of a consolidated entity.

Who is the FTT taxpayer?

The taxpayers of this tax are individual entrepreneurs, legal entities, and registered branch offices of foreign companies which meet at least one of the following conditions:

• They have their registered office or place of business in Slovakia or
• They have established a payment account in Slovakia or
• They conduct business activities in Slovakia.

Who is not affected by the FTT?

Generally, entities of the non-profit sector that carry out public benefit activities, the Slovak Academy of Sciences (SAV), Matica Slovenská, Social Insurance Institution, as well as various budgetary and contributory organizations, VÚC, municipalities, schools, etc. will not be subject to the financial transaction tax.

Who is the payer of the FTT?

In addition to payment institutions, companies that have accounts in foreign banks, use cash pooling, or are recharged for the costs by another entity that made payments on their behalf related to their activities in the Slovak Republic are also included as payers of the DTT. In this case, the company itself will be the taxpayer, which is obliged to calculate and remit the tax to the tax office itself. Additionally, companies must maintain detailed records and submit notifications regarding the FTT to the tax authorities electronically.

Companies with their registered office abroad may also be affected by the FTT. It is sufficient that they conduct activities within Slovak territory. The absence of a permanent establishment for corporate income tax or VAT purposes in Slovakia does not exempt them from FTT obligations.

What is the tax period and what obligations will FTT payers have?

The tax period will be the calendar month, and the relevant notification must always be submitted by the end of the following month. An exception has been made for the first three tax periods from the entry into force of the law, i.e. for the periods April, May and June 2025, which may be settled by a single notification until 31 July 2025. The payment card fee will be payable annually.

At the same time, the taxpayer is required to submit FTT notifications electronically and also maintain detailed records. The notification serves as tax return. In case of corrections, it will be possible to file amended or supplementary notifications.

For the purposes of the financial transaction tax, no special registration with the tax office is required.

Reporting obligations towards payment institutions

If a taxpayer conducts transactions that are not subject to the tax, he is required to notify the payment institution of a specific account from which such financial operations are carried out.

Entities that are not taxpayers (e.g., non-profit organizations, civic associations) and wish to be exempt from paying this tax are also subject to a notification obligation. These entities are required to notify their bank in a timely manner that they are not FTT taxpayers.

In both cases, the payment institution will not withhold the tax from the day following the notification.

Penalties

Violations of obligations arising from the FTT Act are subject to penalties under the Tax Code (for example, the tax administrator may impose a fine ranging from EUR 30.00 to EUR 16,000.00 for failing to submit a timely notification. Additionally, for non-payment of FTT within the deadline, a late payment interest rate of at least 15% per annum will be applied.