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Slovakia: Law of Offshore

Law on Free Zones

The Act on Investment Aid specifies the four categories that may be supported by State aid:

  • Industry;
  • Technological centres;
  • Shared services centres; and
  • Tourism.

Projects are submitted to the Ministry of Economy and evaluated. The amount of investment, creation of new jobs and type or sector of industry or business all affect the granting of investment aid. All relevant documentation must accompany any application before it will be considered by the Ministry.

The following are extracts from the Investment Incentives Act 565/2001 (as amended by Act 203/2004 Coll.). The extracts are key legislative texts relating to investment incentives, aid and tax relief for business entities wishing to set up business in Slovakia.

Article I. Criteria for Dispensing Investment Incentives

Section 2 (1). The term “investment incentives” means public aid, aimed to finance initial investments and encourage creation of new jobs in connection with such investments. The aid is granted to purchase tangible fixed assets and intangible fixed assets necessary to launch the production or the provision of services, to expand the production or the provision of services, or to purchase an enterprise, in the following forms:

a) corporate income tax relief granted pursuant to special legislation
b) contributions for the creation of new jobs granted pursuant to special legislation
c) contributions for retraining of staff hired to newly created jobs granted pursuant to special legislation

Section 2 (2). Criteria for the Dispensing of Investment Incentives:

(a) opening of a new or expansion or upgrade of an existing establishment for the purpose of launching of new production or new services, or expansion or upgrade of existing production or existing services, or changes to the range of produced goods, or fundamental changes to the production process …
(b) incurring not less than [EUR12.6m] in the procurement of tangible fixed assets or intangible fixed assets, of which at least [EUR6.3m] must be financed from the own capital of the legal entity that has applied for investment incentives.

Section 2 (4). If the application specifies that the business is to be conducted in a region in which the rate of unemployment achieves not less than 10% according to the statistics of the Central Office for Work, Social Issues and Family, as of the last day of the calendar half-year preceding the half-year of filing of the application, the amounts specified in subsection 2 b) shall be reduced to one half.

Article II. Tax Relief to Beneficiaries of Investment Incentives

Section 35b, (1). Tax contributors … who were issued a decision to grant investment incentives containing a tax relief pursuant to special legislation, who were established after December 1, 2001 … may claim a reduction of the tax reported in the tax return, subject to the satisfaction of the criteria set forth in special legislation and the criterion set forth in subsection 5.

(2). The tax credit referred to in subsection 1 above may be claimed up to the amount of tax reported in the tax return during not more than 10 consecutive tax periods starting from the one in which the tax base and the tax due (with the tax base not reduced by the tax loss) are reported for the first time …

(5). Only those tax contributors referred to in subsection 1 above shall be allowed to claim tax credits, who are not wound-up in the tax period with respect to which they may claim tax allowances (except for the reorganisation of the tax contributor into another corporate form) and against whom no bankruptcy order is made, or no petition in bankruptcy is rejected due to insufficient property thereof.

Article III.

Section 84a. Contribution for Retraining of Staff payable to Beneficiaries of Investment Incentives

(1). Those employers, which are beneficiaries of investment incentives containing a contribution for retraining, shall be paid by District Labour Offices contributions for the retraining of their staff hired to the newly created jobs referred to in Section 93a.

(2). District Labour Offices shall pay contributions for the retraining of staff to the maximum extent of [EUR312] per employee, on condition that upon completion of the retraining programme the employers under subsection 1 above keep employing such staff members for a period of not less than 12 months.

Contributions by Slovakian Government – Newly Created Jobs Official Unemployment Rate Aggregate Contribution per Newly Created Job
in the Region
more than 30% 
25% – 30% 
20% – 25% 
15% – 20% 
10% – 15% 
10% and less
EUR5,000
EUR4,060
EUR3,125
EUR2,190
EUR1,250
EUR940

 

 

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