The reduced corporate income tax rate is effective for tax periods beginning after 31 December 2013. When a tax year other than the calendar year is used, the new rate applies for the fiscal year starting in 2014.
Advance payments of corporate income tax
The change in the corporate income tax rate affects both the calculation of tax advance payments as well as the cash flow of companies. Regarding the calculation of the corporate income tax liability for 2013, the tax rate of 23% is to be applied. However, from the first month or quarter of 2014, companies must remit tax advances based on the latest known tax liability recalculated with the new tax rate of 22%.
Practically, this change enables the recalculation of the tax base for 2012—i.e., used for the calculation of the advance payments paid in 2013, but using the current tax rate of 22%, for taxpayers whose tax period is based on the calendar year. The advance payment amounts due in 2014 would be calculated using this method up to the deadline for filing the tax return for 2013 (i.e., up to 31 March 2014) unless the filing period has been extended.
After filing the 2013 corporate income tax return, the amount of advance payments due in 2014 would be calculated from the last known tax liability—i.e., the tax liability for 2013, using the same tax rate of 22%.
At the same time, the threshold for quarterly advance payments has been increased from €1,659.70 to €2,500 as of 1 January 2014.
For more information, contact a KPMG tax professional in Slovakia
+421 259 984 412