BRATISLAVA, August 8, (WEBNOVINY) — The special levy that companies operating in regulated sectors will have to start paying based on newly approved legislation only applies to entities for which the duty exists to file income tax returns in the Slovak Republic. The Finance Ministry issued its opinion in response to media speculations about groups of enterprises in regulated sectors that will be burdened by the newly introduced specific levy, approved to help consolidate public finances. „With regard to subsidiaries of foreign entities, these are obliged to pay tax on income they earn in the Slovak Republic,“ said the ministry. In case of doubts regarding interpretation of the law, the Finance Ministry advised the parties concerned to ask for clarification the relevant tax office, which is the administrator of the special levy.
Several Slovak media discussed the interpretation of the law on the special levy in regulated sectors in recent days. The daily SME came up with the information that based on the formulation in the law, Irish low cost airline Ryanair might have to pay to the state treasury nearly 25 million euros. The special levy is to apply to entrepreneurs who have a license from the regulatory authority of another EU country and are doing business in Slovakia. According to the originally proposed text, the special levy should have applied only to regulated domestic firms and foreign enterprises which have an organizational unit registered in the Commercial Register, but the Parliamentary Finance Committee pushed through a change in the text according to which the special levy is to be paid by all companies doing business in regulated industries in Slovakia.
The law on the special levy will take effect from the beginning of September of this year. The Finance Ministry suggested as the levy period each calendar month of the accounting period during which the regulated entity is authorized to perform activities in regulated areas. The law stipulates that the last levy period is December 2013. The basic income amount from which the duty to pay the levy arises is set at 3 million euros; the rate of levy for a regulated entity is 0.00363. The levy is calculated as the product of the base for the levy and the levy rate. Companies can account for the paid levy as deductible tax expenditure.
The Finance Ministry proposed the special levy for companies that are authorized to perform business activities in energy, insurance and reinsurance, public health insurance, electronic communications, handling of pharmaceutical products, postal services, transport by rail, public water supply, sewerage and civil aviation. Based on changes approved by parliamentary committees, health care providers have been added to this group.
According to the Ministry of Finance, the introduction of the special levy should not affect prices of products and services of the regulated entities. „The introduction of the levy is not expected to increase prices of services and goods supplied to the final consumers. This levy will not be considered a legitimate expense that can be counted into regulated prices and the law therefore prohibits direct increase of regulated prices,“ says the explanatory report to the bill about expected impacts of the bill.
SITA
