mailingLeitner Slovakia | Donate 2 % of tax paid

Dear clients and partners,

In the latest edition of the LeitnerLeitner newsletter, we provide an overview of significant VAT changes, including changes to VAT rates, that have been approved by Parliament as part of the financial consolidation efforts.

In the next edition, we will focus on further changes introduced by the consolidation package. Keep an eye out to learn how these developments will impact your business.

Please also mark November 27, 2024, on your calendar – we’re preparing our traditional WinterMeetUp with LeitnerLeitner, focusing on tax news. We look forward to your participation.

We would be happy to assist if you need more information.

We for you,

Anna Fábryová & Martin Michalides

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Donate 2 % of tax paid

Each year, companies in Slovakia have the unique opportunity to directly support a non-profit organisation with finances that would otherwise be distributed to the state budget. This constitutes neither an additional payment nor an increase of your tax liability, but simply a percentage of the taxes already paid by the company.

The choice is yours! The list of registered organisations, i.e. tax beneficiaries, is publicly available on the website of the Notary Chamber of the Slovak Republic https://www.notar.sk/prijimatelia/.

Strengthen your corporate culture

Let your employees decide about the desired receiving organisations, e.g. through a questionnaire or a vote.

According to the Slovak Income Tax Act, companies can donate 1 % of the taxes paid by them. The allocation of 2 % of the tax paid is possible only if the company has made financial donations to non-profit organisations in the amount of at least 0.5 % of their taxes within the deadline for filing the tax return. The allocation of 2 % of taxes paid can be made to different organisations than the organisation(s) that received the initial financial donation.

Allocation of a company’s tax paid

It is very easy for companies to allocate the taxes paid. They simply indicate in their tax return form which organisation(s) they wish to support and in what amount.

Companies can also decide whether to disclose their data directly to the recipient in the tax return form. As a company, you can donate 1 % (2 %) to more recipients, at least EUR 8 to each of them.

Motivate your employees

If your employees volunteer at least 40 hours during the tax period, they will be entitled to donate 3 % of their taxes paid instead of the standard 2 %, subject to written confirmation. As an employer, you can therefore organise volunteering activities as team-building measures.

Allocation of an individual’s taxes paid

There are two ways in which an individual can assign 2 % or 3 % of his taxes paid. When submitting a tax return, the data on the receiving organisation must be entered in the tax return form in a similar way to companies. If an employer prepares an annual tax return, the tax is allocated by submitting a declaration of assignment for the tax paid together with a confirmation of the tax paid by the end of April. Unlike companies, individuals may donate 2 % or 3 % of the tax to only one recipient and the amount of tax must be at least EUR 3.

Allocation of an individual’s taxes paid to parents

From 2025, individuals will be able to allocate 2 % of their taxes paid to each parent. One parent must be the recipient of a retirement, invalidity or disability pension and must reach a retirement age. An individual can continue to donate 2 % of the tax paid to a non-profit organisation.

Transparent tax donation

The allocation of taxes paid represents a trustworthy and transparent form of funding for non-profit organisations.

A recipient that receives more than EUR 3,320 in a tax period is obliged to disclose the amount and purpose of the use of these funds in the Commercial Bulletin. In addition, if a non-profit organisation receives more than EUR 35,000, its annual financial statements must be verified by an auditor within one year of the end of the year in which it received the funds.

Each year, the Financial Administration publishes an annual overview of the recipients of the tax paid at the following link:  https://www.financnasprava.sk/sk/elektronicke-sluzby/verejne-sluzby/zoznamy/zoznam-prijimatelov-dane

Decide for yourself, who needs your taxes.