Starting 1 April 2025, Slovakia introduces into practice a new transaction tax (“transakčná daň“) or FTT that directly impacts business operations. The measure aims to increase public revenues and shift part of the tax burden to capital flows.

What is taxed? The transaction tax applies to certain financial transactions since 1 January 2025 taxed first time from April 2025, such as:

• Transfers of funds between Slovak bank accounts,
• Payments made by businesses to suppliers or contractors,
• Certain intra-group transactions (under defined conditions).

Private consumer payments are among others exempted.

Who pays the tax? Slovak vs. foreign entities The key determinant is whether the transaction is processed through a Slovak-based financial institution or public authority.

• Slovak-based entities(companies and sole traders registered in Slovakia) are generally subject to the tax on qualifying domestic transactions, with the tax automatically withheld by Slovak banks or service providers.
• Foreign based entities – a company that is not domiciled in the Slovak Republic becomes a taxpayer if it has a payment account in a bank domiciled in the Slovak Republic or carries out activities in the Slovak Republic. If a foreign company has a payment account in a bank domiciled in the Slovak Republic, the subject of FTT are financial transactions that are carried out on this account in the Slovak Republic, while the relevant bank is the taxpayer. Otherwise, no FTT applies.

Tax rate and thresholds The general rate is 0.4% of the transaction value with minimum sum of 1 cent. For cash withdrawal, the rate is 0.8%. Tax period is a calendar month.

Reporting and administration Since the tax is withheld at source, most businesses will not be required to file transaction tax returns. However, reporting will be in major part transferred to respective financial institutions who performs financial transactions itself.

Implications for entrepreneurs

1. Businesses—especially those working with or within Slovakia—are advised to consult their financial advisors to ensure correct classification and minimize exposure.
2. Entrepreneurs subject to FTT should review their payment flows and contracts to assess the impact of the new tax. Optimizing transaction structures or consolidating payments may help reduce the tax burden;
3. For those active in real estate, construction, or asset-heavy industries, the transaction tax may increase acquisition costs and should be factored into project budgets.

This article reflects the legal framework as of April 2025. Future amendments or exemptions may affect practical application.