What is the purpose of a double tax treaty?
Double tax treaties
are special agreements signed between countries
with the role of avoiding the double taxation of profits
in both the country of residence and in the country where the business takes place. Due to the double tax treaties’ provisions
, the profits can be exempt from paying the corporate tax of 19% or if taxed in Slovakia
it can be credit in the country of origin. Our attorneys in Slovakia
can give you more information about these types of treaties
What are the tax exemptions provided by the double tax agreements signed by Slovakia?
Besides the profits, the interests and royalties paid by a foreign citizen from a treaty country, they benefit also from a smaller tax rate than usual. The taxes may vary from 0% (if certain conditions are met, such as owning a majority of the Slovak capital) to 15%. The usual tax on interests and royalties is 19%. For more information about the taxes that must be payed in this country, please consult this comprehensive article provided by our law firm in Slovakia.
Most of these treaties
are elaborated under the OECD model which has a special clause related to the tax information exchange between the countries
. According to it, the Slovak tax authorities
are entitle to ask for specific financial information related to one tax payer from a country which has signed the DDT
and reverse. In certain case thel Tax Agreement Information Exchange can be exchanged between the entities
What are the countries that concluded double taxation treaties with Slovakia?
The first treaty signed by Slovakia was the one with France in1973. In the following years, the country signed double tax treaties with Netherlands, Mongolia, Japan, Austria, Sri Lanka, Sweden, Norway, Cyprus, Spain, Germany, Italy, Macedonia, Bosnia and Herzegovina, Denmark, India, Brazil, Greece, China, Nigeria, Tunisia, United Kingdom, Luxembourg, Czech Republic, United States of America, Romania, Russian Federation, Hungary, Poland, Ukraine, Croatia, Turkmenistan, Belgium, Switzerland, Turkey, South Africa, Finland, Latvia, Ireland, Belarus, Australia, Malta, Israel and Bulgaria.
After 2000 Slovakia has signed double tax treaties with: Indonesia, Serbia, Montenegro, Lithuania, Canada, Portugal, Korea, Czech Republic, Iceland, Uzbekistan, Slovenia, Estonia, Singapore, Moldova, Mexico, Kazakhstan, Vietnam, Syria, Libya, Switzerland, Taiwan, Georgia. The treaties with Macedonia and Egypt were amended in 2011 and in 2004.
A proof that the incomes are already taxed in the country of origin
(a certificate of taxation received from the foreign competent tax authority) and a proof that the requester doesn’t have Slovak residence
(a certificate of residency from the foreign country) are required in order to beneficiate from the exemption or reduction of taxes
. For more information about how you can profit from a double taxation treaty's provisions
, you may contact our Slovak lawyers
who can also provide you with other tax minimization strategies