• Service: Tax, Global Transfer Pricing Services, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 3/12/2014

Slovakia - Deductibility of costs relating to expired goods  

March 12: Over recent months, tax audits in Slovakia have focused on and challenged taxpayer treatment of the deductibility of costs relating to expired goods inventories.

The position of the Slovakian tax authorities has been that when the maximum durability is exceeded or use-before-date period has expired, this is an event of irreparable damage to the goods (because the goods are not allowed to be sold or to be repaired so as to be appropriate for human consumption). According to the tax authorities, such costs relating to these expired goods are to be considered to be “damage”—and thus not deductible for tax purposes under provisions of Slovakian tax law.

Tax professionals believe that the position of the tax authorities is based on an incorrect interpretation of the definition of “damage” (in part based on expired statutory provisions and in part on several decisions of the Supreme Court of the Slovak Republic—decisions that were based on prior, no-longer-effective law).

Read a February 2014 report [PDF 94 KB] prepared by the KPMG member firm in Slovakia: Tax & Legal News (February 2014)

Other topics covered in the report include:

  • New treatment of overdue liabilities from a corporate income tax perspective
  • OECD released an initial draft of revised guidance on transfer pricing documentation
  • European Commission approves new regional aid map 2014-2020 for Slovakia
  • Crime of obstruction of tax administration

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