Imposte sul Reddito per le Persone Fisiche, Compresi i Lavoratori Autonomi e le Modifiche alle Assicurazioni Sociale e Sanitaria (Bart Waterloos, VGD/AVOS): Il Dott. Waterloos ha illustrato i cambiamenti principali nella legislazione fiscale del 2013: la tassazione degli individui fiscali è stata portata in alcuni casi al 25%, mentre la base fiscale rimane al 19%, e vi sono stati cambiamenti alla quantità di riduzioni fiscali ottenibili, alla tassazione sul reddito, sui benefit e sui dividendi. Le entrate della tassazione su questi ultimi andranno in favore dell’assicurazione sanitaria. D’ora in poi inoltre ci sarà una sola base di calcolo sia per l’assicurazione sanitaria che per la previdenza sociale, il che secondo il Dott. Waterloos significa che si pagheranno più tasse per avere lo stesso servizio che in precedenza.

1. Income Tax of physical
persons 2013
Including self-employed persons and
changes to social and health insurance
Bart Waterloos
1

2. Table of contents
Quick overview of the most important changes
Repeating of changes past 2 years
Taxation of individuals
Dividends
Changes to the health and social contributions
Simulations
Questions and Answers
About VGD-AVOS
2

3. Quick overview
Top tax changes for 2013
Introduction of progressive tax rate of 25%
Limitation of lump-sum costs
Limitation of tax-free amount
Limitation of tax bonus
Special rate for dividends from profits realised until 2003
No extension of deadline for filing the tax return
3

4. Look back to the past
Changes over the last 2 years
Taxation of employment income
Extension in the range of insured persons for social insurance
Intended periodicity of the remuneration is prevailing over the
type of the contract for social insurance
Claw-back for social contributions on irregular remunerations
All benefits subject to social and health contributions:
 Travel allowances
 Redundancy payments or severance
4

5. Taxation of individuals
Overview
Subject to personal income tax are the following types of
income:
 Employment income (§5)
 Entrepreneurial and rental income (§6)
 Investment income (§7)
 Other income (§8)
Tax statement is due by 31 March, deadline can only be
extended with foreign income
5

6. Taxation of individuals
Cancellation of the flat tax rate
19% will remain the base rate,
But a new tax rate of 25% being introduced:
 For monthly tax base above 2.866,81 € or 34.401,72 € on a
yearly basis
 In technical terms: for amounts exceeding 176,8-times the valid
life-minimum
 A special 5% tax on Selected State Officials
6

7. Taxation of individuals
Determining the Tax Base
The tax free amount :
 Is calculated as 19,2 times the life-minimum valid per 1st of January
of the year (19,2 x 194,58 € = 3.735,94€)
 Compared to 3.644,74 € for the year 2012
 Tax payer can claim the entire tax free amount only if the yearly
taxable base is less than 100 times the life-minimum (i.e. less than
19.458 €; compared to 18.983 € for the year 2012
 Usually managers and expats are above this limit and can thus not
enjoy the tax free amount at all (yearly taxable base is above
34.401,74 €, or 2.866,8 € monthly) (176,8 times the life-minimum)
7

8. Taxation of individuals
Determining the Tax Base
Tax free amount (allowance) limited to ‘active income’, i.e.:
 Employment income (§5)
 Entrepreneurial or other income from self-employment (§6, 1°- 2°)
 No longer applicable on “passive” income - e.g. rental income
Tax free amount (allowance) for spouse, only if:
 She is taking care of the kids till 3 years (6 if disabled), or
 She is registered as self-employed, or
 She is a disabled person herself
8

9. Taxation of individuals
Determining the Tax Base
Tax free amount (allowance) for pension savings
 Compensation for lowering of the second pillar
 Payments for pension savings up to 2% of tax base from active
income
 Calculated maximum from 60-times the average salary
Tax bonus for children:
 Discount of 19,32 € per child per month
 Condition: need income above 6-times the minimum salary
 Only for ‘active’ income
9

10. Taxation of individuals
Types of income: employment income
Consists of:
 Gross salary
 Bonuses
 Fringe benefits
No changes in 2013
10

11. Taxation of individuals
Types of income: entrepreneurial income
Taxable income:
 Income from small business
 Independent profit-making activities (self-employed)
 Rent of real estate
Tax-free amount of 500 € for rental income
11

12. Taxation of individuals
Types of income: entrepreneurial income
Lump-sum expenses:
 40% remains
 But yearly maximum of 5.040 €, or monthly 420 €
 To be applied on a monthly basis
Lump-sum for small agricultural income
Authors’ revenues:
 Different categories, with all effect on tax and health or social
contributions
 Income for contributions to magazines, newspapers, … can be
taxed via withholding tax, then no social and health contributions,
but also no lump-sum expenses, 19%
12

13. Taxation of individuals
Types of income: investment income
Taxable income:
 Interests
 Winnings
 Yields from additional pension and life insurance
Mostly there is a withholding tax, whereby this withholding tax is
now considered final in many occasions
13

14. Taxation of individuals
Types of income: other income
Taxable income:
 Income from occasional activity
 Income from the sale of real estate
 Transfer of securities, options, shares
 Monetary and non-monetary income provided to health care
provider or its employee/medical staff by explicitly selected
persons, no expenses can be applied
Lump-sum for small occasional agricultural income
14

15. Taxation of individuals
Technical issue: allocation of tax to NGO’s
For individuals:
 2% still available to donate
 Unlike legal entities, no conditions and no gifts
 Another 1% (3% in total) can be assigned by those volunteers
who worked for any NGO’s for free for 40 working hours a year –
applicable on tax period of 2012
 Should the conditions be not met, penalty of 1% applies
15

16. Dividends
Health insurance 2011-2012
Dividends are subject to health contributions
 10% contribution is due by the individual receiving the profit
shares
 on the amount exceeding the monthly minimum calculation base
 Applicable on profits generated for accounting periods starting
after 1 January 2011
 Includes also the liquidation balance
 No obligation for company paying out the dividends
 Combine with overall maximum annual calculation base
16

17. Dividends
Health insurance 2013 onwards
Dividends are subject to health contributions
 14% contribution is due by the individual receiving the profit
shares
 Completely separate calculation base
 Calculation base of 120 times the monthly average salary, or
thus cap of 94.320 EUR for 2013
 The company paying out the dividends has to ‘withhold’ the
contribution
 Valid on dividends paid out as from 2013 profits
 Only for individuals subject to the Slovak health system
17

18. Dividends
Profits from before 2004
Old dividends: if paid out until 2012
 19% income tax
 health insurance?
Old dividends: if paid out in 2013 only
 15% income tax
 NO health insurance contributions
 Done via withholding tax
 Decision GM to be taken in 2013
18

19. Dividends
General overview
dividends Profit till 2004-2010 2011-2012 2013-.....
2003
Health
insurance
rate
Till 31-10- 0% 0% 0% 0%
2010
2011-2012 0%? 0% 10% 0%
2013 0% 0% 10% 14%
2014 0%? 0% 10% 14%
.... 0%? 0% 10% 14%
19

20. Health and social insurance
Increased and unified calculation basis
There will be only one calculation basis for all insurances,
New amount will be:
 3.930 EUR
 Or five-times the monthly average salary from 2 years ago.
20

21. Health and social insurance
Overview premiums 2012
Insurance Maximum % employee % employer
calculation base
Health 2.307,50 € 4% 10%
Sickness 1.153,50 € 1,4% 1,4%
Pension 3.076,00 € 4% 14%
Invalidity 3.076,00 € 3% 3%
Unemployment 3.076,00 € 1% 1%
Accident no limit - 0,8%
Guarantee fund 1.153,50 € - 0,25%
Reserve fund 3.076,00 € - 4,75%
13,4% 35,20%
21

22. Health and social insurance
Overview premiums 2013
Insurance Maximum % employee % employer
calculation base
Health 3.930,00 € 4% 10%
Sickness 3.930,00 € 1,4% 1,4%
Pension 3.930,00 € 4% 14%
Invalidity 3.930,00 € 3% 3%
Unemployment 3.930,00 € 1% 1%
Accident no limit - 0,8%
Guarantee fund 3.930,00 € - 0,25%
Reserve fund 3.930,00 € - 4,75%
13,4% 35,20%
22

23. Effect of changes
Simulation 1
Take a senior manager in an international company; earning
currently 5.500 EUR gross a month,
 This person will have currently net income of 4.161,50 EUR
 Costs for the employer: 6.514,50 EUR
After the intended changes:
 Her net income will drop with 259,50 EUR to 3.902 EUR
 Costs for the company will increase with 381,4 EUR to 6.895,9
EUR
23

24. Effect of changes
Simulation 2
Take a young professional working at a senior position; earning
currently 2.600 EUR gross a month,
 This person will have currently net income of 1.875,50 EUR
 Costs for the employer: 3.467,50 EUR
After the intended changes:
 His net income will drop with 22,50 EUR to 1.853 EUR
 Costs for the company will increase with 47,65 EUR to 3.515,20
EUR
24

25. Effect of changes
Simulation 3
SME company, IT sector, some employees, owner is physical
person, also working as manager
 Currently company is making profit of 200.000 EUR
 Corporate income tax: 38.000 EUR
 Net income owner: 154.000 EUR
After the intended changes:
 Gross profit will drop to 190.000 EUR
 Corporate income tax: 43.700 EUR
 Net income company: 146.300 EUR
 Net income owner: 133.095 EUR
25

26. Health and social insurance
Extension to ‘dohodari’
Dohodari will be considered entirely as ‘employees’,
 Therefor not only accident and guarantee insurance, but all types
of insurance
 Contributions due by the employer and employee
 Will be enjoying then also the benefits
Some exceptions,
 students
 Recipients of a pension
 These categories still escape the sickness, unemployment and
health care insurance.
26

27. Health and social insurance
Self-employed persons
Contributions will increase for them as well,
 From currently 44,2% average salary of two years ago to 50%
 Calculated from the tax base before deductions of social and
health insurance contributions
 Further increases for those earning more than 1.200 € monthly
Negative impact also from the reduction in the lump-sum
expenses
27

28. Health and social insurance
Technical issues
Annual reconciliation
 Changed the date till end of September
 Done now by the health insurance
Changes to the first and second pension pillars
 Transfer from the second pillar contributions to the first pillar
(from 9% to 4%)
 Voluntary extra contributions are possible and are a tax benefit
(max. 2% from tax base, overall maximum of 943,20 EUR for
2013-
 Calculation bases and percentages for the first pension pillar to
be changed yearly
28

29. Health and social insurance
Technical issues
Meal allowances
 Increased per 1st of September 2012
 Minimum amount is now 4,00 EUR for 5-12 hours trip
 Thus mealticket should be min. 3,00 EUR
29

30. Questions &
Answers
30

31. The VGD group
A professional organization of auditors, accountants, payroll, tax
consultants, legal and deal advisors;
30 Partners, 625+ Staff, 30 offices
Present in 10 Mid-European countries
Started in 1981, constantly growing;
Offering high quality services and integrated solutions in the Mid-
European region.
Member of Nexia International
31

32. VGD AVOS Slovakia
More than 10 years of experience in SK
Rapidly expanding and growing
Offices in Bratislava and Piestany
Focus on international clients and larger local SME’s
More than 60 staff members in accounting, tax, audit and payroll
administration
Foreign languages spoken: English, Dutch, German and French
32

33. VGD AVOS office locations
THE SLOVAK REPUBLIC
Bratislava Piešťany
Moskovská 13 Námestie SNP 1476/4,
811 08 Bratislava 921 01 Piešťany
tel: +421 2 5541 0624 tel: +421 033 7767 321
fax: +421 2 5541 0631 Tel: +421 033 7743 895
vgd.bratislava@vgd.eu vgd.piestany@vgd.eu
www.vgd.eu www.vgd.eu
OTHER COUTRIES
Czech Republic Praha, Liberec, Olomouc
Belgium Brussels, Beringen, Brugge, Gent, Willebroek-Blaasveld, Antwerpen, Antwerpen
L.O., Kuume, Machelen, Dendermonde, Zele
Bulgaria Sofia
Germany Düsseldorf, Leipzig, Essen
Luxembourg Luxembourg
The Netherlands Tilburg, Oisterwijk
Hungary Budapest
Poland Warszawa
Russia Nizhny Novgorod
33

34. Thank you for
your attention
The material contained in this publication is provided for general information only. The application of the
information included in this publication will depend on specific circumstances. We recommend that readers
seek professional advice when dealing with any business or legal issues. The material does not represent, nor
replaces legal and tax advisory services. No liability is accepted for acts or omissions taken in reliance upon
the contents of this publication
34