Slovak RepublicSlovak Republic

Legal ReferenceIncome Tax Act, Article 17, para 5 and Article 18, para 1

Legal ReferenceIncome Tax Act, Article 18, para 1

The methodology included in the OECD Transfer Pricing Guidelines is referred to in the Income Tax Act as a source of interpretation.

Legal ReferenceIncome Tax Act, Article 2

Article 2 of the Income Tax Act defines related parties as follows: n) ‘associated person’ shall mean: 1. a close person, 2. a person or entity with economic, personal or other ties, 3. a person or entity which is part of a consolidated whole for purposes of consolidation. o) ‘economic ties or personal ties’ shall mean a person’s or entity’s participation in the assets, control or management of other person or entity or mutual relation between persons or entities being under control or management of the same person, a person close to such person or entity, or in which such person, a person close to such person or entity has a direct ownership interest or indirect ownership interest; participation in: 1. the assets or control shall mean a direct interest, indirect interest or indirect derived interest amounting to at least 25 % of the registered capital, a direct interest, indirect interest or indirect derived interest amounting to at least 25 % of voting rights or an interest amounting to at least 25 % of profit...

Legal ReferenceIncome Tax Act, Article 18

Article 18 of the Income Tax Act provides for the use of the five methods recognized by the OECD Transfer Pricing Guidelines, or a combination thereof, or a use of another method provided it is in compliance with the arm’s length principle. Article 18 para 2 and 3 provide for a brief description how the methods should be used.

• CUP (provided)
• Resale Price (provided)
• Cost Plus (provided)
• TNMM (provided)
• Profit Split (provided)
• Other (provided)

The use of methods is in line with the OECD Transfer Pricing Guidelines.

• Hierarchy of methods (not selected)
• Most appropriate method (selected)
• Other (not selected)

The OECD Transfer Pricing Guidelines should be followed.

There is a preference to use domestic comparables as long as the other comparability factors are satisfied. However, there is no specific methodology provided by legislation or administrative guidance.

Legal ReferenceIncome Tax Act, Article 18 para 1

There is no specification regarding statistical measures, with one exception: if the price/result of the taxpayer is found within a tax audit to be outside the arm’s length range (the range itself is not specified statistically), then the tax base of the taxpayer shall be adjusted to the median value, unless the taxpayer demonstrates that another value is appropriate.

Legal ReferenceIncome Tax Act, Article 18 para 1

The OECD Transfer Pricing Guidelines should be followed. Comparability adjustments are covered in the domestic legislation – Income tax Act, Article 18, para 1: “The difference referred to in Section 17 subsection 5 above shall be determined using any of the methods pursuant to subsection 2 or 3 or their mutual combination or, as appropriate, other methods, which are not described in subsections 2 or 3 below. Only such methods may be used, the use of which complies with the arm’s length principle...”

The OECD Transfer Pricing Guidelines should be followed.

The OECD Transfer Pricing Guidelines should be followed, including the approach to HTVI.

Legal ReferenceIncome Tax Act, Article 17, section 5, letter b)

The Slovak Republic applies general TP rules and follows the OECD Transfer Pricing Guidelines except for the approach mentioned in the TPG, Section D.2.: Simplified determination of arm’s length charges for low value adding intra-group services, which has not been adopted. Article 17, section 5, letter b) of the Income Tax Act provides specific conditions for including expenditures in the tax base of an associated person.

The OECD Transfer Pricing Guidelines should be followed.

Legal ReferenceIncome tax Act, Article 21a; Income tax Act, Article 17k

The deduction of related party interest is limited to 25% of EBITDA. As of 1 January 2024, the interest expense limitation according to the EU ATAD has taken effect.

There is no specific guidance. The OECD Transfer Pricing Guidelines should be followed.

Legal ReferenceGuidance of the Ministry of finance of the Slovak republic MF/020061/2022-724 on determining the content of documentation according to Income Tax Act Article 17 section 7 and Income Tax Act Article 18 section 1

• Master file consistent with Annex I to Chapter V of the TPG (selected)
• Local file consistent with Annex II to Chapter V of the TPG (selected)
• Country-by-country report consistent with Annex III to Chapter V of the TPG (selected)
• Specific transfer pricing returns (separate or annexed to the tax return) (selected)
• Other (specify): (not selected)

Legal ReferenceIncome Tax Act Article, 18 para 11; Act No. 442/2012 Coll. on International Assistance and Cooperation in the Field of Taxation, Articles 22a to 22g; Guidance of the Ministry of finance of the Slovak republic MF/020061/2022-724 on determining the content of documentation according to Income Tax Act Article 17 section 7 and Income Tax Act Article 18 section 1

The taxpayer shall submit transfer pricing documentation within 15 days from delivery of the tax administration’s request. CbCR must be filed by Ultimate Parent Entities resident in the Slovak Republic whose consolidated group revenue exceeds EUR 750 million. Full documentation must be kept by the largest taxpayers, basic documentation by middle-sized, and simplified for the smallest. Certain low-volume / low-risk transactions are exempt.

Legal ReferenceTax Administration Act, Article 154 para 1 letter j)

There are no penalties specific to transfer pricing. Generally, a penalty from EUR 30 up to EUR 3,000 for the administrative offence for failure to comply with any of the obligations of non-financial nature applies.

Legal ReferenceGuidance of the Ministry of finance of the Slovak republic MF/020061/2022-724 on determining the content of documentation according to Income Tax Act Article 17 section 7 and Income Tax Act Article 18 section 1

Certain low-volume / low-risk transactions are exempt from documentation.

Legal ReferenceIncome Tax Act, Article 18, para 4-10; Act on Dispute Resolution in respect of Taxation; Slovak Republic OECD MAP Profile

APAs are specifically recognised under the Income Tax Act. Roll-back is allowed in case of bilateral/multilateral APAs. MAP regulations are in place. Other mechanism includes European Trust and Cooperation Approach (“ETACA”) programme.

• Rulings (selected)
• Enhanced engagement or cooperative compliance programmes (not selected)
• Advance Pricing Agreements (APA) (selected)
• International Compliance Assurance Programme (ICAP) (not selected)
• Mutual Agreement Procedures (selected)
• Other (please specify): European Trust and Cooperation Approach (“ETACA”) programme (selected)

The implementation of SSA is under discussion and currently being evaluated.

Legal ReferenceIncome Tax Act, Article 17, para 1, letter a)

Transactions with an effective value below 10 thousand EUR are outside the scope of transfer pricing rules. In the case of loans, the threshold is 50 thousand EUR and applies to the principal amount. General tax-related anti-avoidance rules are applicable.

Legal ReferenceIncome Tax Act, Article 17 para 6

If there is a primary adjustment performed by the tax administration of another jurisdiction with which the Slovak Republic has a Double Taxation Agreement in place, then the corresponding adjustment may be allowed by the Slovak tax administration (opening of a Mutual Agreement Procedure is not necessary). For domestic transactions between local related parties, unilateral downward adjustment is possible, subject to a notification obligation.

Yes. Year-end adjustments are allowed.

All treaties signed by the Slovak Republic contain Article 7 as it read before 2010.

• Article 7 as it read before 2010. (selected)
• Article 7 as it reads after 2010. (not selected)
• Other (not selected)

The Slovak Republic has a Reservation to the 2010 version of Article 7 and applies the pre-2010 Article 7 in its treaties. Generally, the arm’s length principle and the separate entity approach apply for PEs. Slovakia adheres to an interpretation whereby no profit mark-up, or interest charges or royalties may be recognized in intra-entity dealings.

Legal ReferenceIncome Tax Act, Article 17 para 7

The separate entity approach and the arm’s length principle apply in the case of PEs. The method to determine the tax base of the PE should generally follow the methods recognized in the OECD transfer pricing guidelines. APA is available for the determination of the tax base of a PE.