Slovakia

Slovakia offers a 100% deduction of eligible costs from the income base, providing a net benefit
of 21% on the cost of R&D. There is an additional deduction that can be applied to any incremental
increase between current and previous two years of QE, equating to an additional 21% benefit.

There is a certain lack of clarity regarding how the legislation should be interpreted, but the Finance
Administration has been taking steps to help in this regard.

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	Slovakia all Companies
	100% for all QE in current year plus an additional bonus based on calculation between current and previous two years. The net benefit equals 21% from the result.
Benefit Overview	Slovakia offers a 100% deduction of eligible costs from the income base, providing a net benefit of 21% on the cost of R&D. There is an additional deduction that can be applied to any incremental increase between current and previous two years of QE, equating to an additional 21% benefit.
Eligible Claim Period	The company can look back retrospectively for one financial year and the claim must be made within three months of year-end, as an input into the tax computations (immediate relief). The company can request a ‘delay’ to submit a tax declaration for 6 months of the previous financial year (i.e. Dec Y/E – submit half at the end of March and remainder at the end of June, both directly into tax comps).
Historical Background	The regime, based on the Czech one, has been valid since January 2015, but with only a 25% benefit on QE.
	As of January 2018 it was possible to claim 100% of R&D costs. For FY 2019 it was 150% and 200% since FY2020, plus an additional 100% for any incremental QE over and above the average of the two previous years.
	In FY 2022 it is possible to claim again 100% of R&D costs in the year.
Ease of Application	There are 2 main conditions: The company must have an internal simple entry document created for every R&D project for which it claims the applicable costs for tax deduction. The document must contain the date, project start and end dates, the goals that they want to achieve with the project and the estimated costs for the project for each year. The document must be approved by a person who can act on behalf of the company. Company is obliged to separate the R&D costs for each project into individual analytical accounts. The company applies the tax deduction in the tax declaration by filling out an annex to the tax return which contains data from the entry document and the applicable deduction. The Finance Administration publishes a list of all the companies which have applied for the R&D Tax deduction including a short description of each R&D project. The aim is to increase transparency.
Eligible Costs	The following are the eligible costs for the regime: Salary Materials Amortisation of equipment & buildings Software licences (for R&D purposes) Running costs (electricity, water, heat, gas) Non-material development results bought from R&D companies certified under the Ministry of Education (only about 860 companies, universities and academic institutions) Certification of the R&D results (e.g. homologation) If R&D project has full or partial funding from public resources received for any of the costs, this deems them ineligible.
Issues to Consider	An R&D tax deduction is easy to apply and claim for. However the company claiming needs to make sure that the documentation is professionally prepared and within the law. The Financial Administration can retrospectively review claims submitted up to 5 years back, during tax audits. In that case, it is the responsibility of a taxpayer to provide evidence or supporting detail that all legal requirements have been met. The company is obliged to separate the R&D eligible costs for each project into individual analytical accounts. R&D tax cannot be combined with other types of incentives.

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Country Profiles

Slovakia