A new package of measures introduced by the Ministry of Finance of the Slovak Republic in order to mitigate the upcoming difficult economic period caused by COVID-19 disease is effective since 4^th April 2020.

The so-called Lex Corona is divided into the following areas:

• taxes,
• accounting,
• financial markets and
• fiscal rules.

Selected tax measures

A) Postponement of deadlines for income tax

An income tax return can be filled by the end of the calendar month following the month in which the pandemic period ended. It means, if the Government of the Slovak Republic will declare the end of a pandemic in July, the deadline for filing income tax return will be 31^st August 2020.

Taxpayer, whose the last day of the deadline for the filing of the income tax return will expire during the pandemic period, can the tax authority upon the notification extent the deadline by maximum 3 calendar months or 6 calendar months in case if its income includes taxable income from sources abroad; such extension will not apply for the taxpayer which is in liquidation or bankruptcy. This measure can be used by companies, which tax period will end by 31^st March 2020 and the deadline for income tax return ends on 30^th June 2020, therefore such period can be extended by 3 calendar months, until 30^th September 2020.  

All the above-mentioned deadlines are valid under the conditions, that in that deadline the tax will be paid as well.

B) Missing the deadlines – Missing the deadline specified by law, which has expired during the pandemic situation, will be forgiven if the taxpayer performs a missed action by the end of the calendar month following the end of the pandemic, at the latest. However, this will not apply to file a tax return and to pay tax.

C) Postponement of tax executions during the pandemic situation;

D) Measures for the third sector – during the pandemic period, beneficiaries of the proportion of the paid tax may also use the funds obtained from the tax assignment to help to mitigate the negative consequences of the pandemic;

E) Suspension of tax inspections and tax proceedings, except for the tax proceedings for return of the financial funds (inspection of excessive deductions, a debit procedure for tax overpayment);

F) The list of tax debtors and VAT payers, who breached their obligations will not be updated during the pandemic situation;

Accounting measures

During a pandemic period, if some entities will not be able to meet their obligations, the law allows entities to meet these missed obligations by the end of the third month following the end of pandemic situation or to the expiry of the deadline for submission of tax return under law under point 1 A) above, whichever is the earlier. This measure includes deadlines postponement for financial statements, annual reports, and auditors' reports and their submission with the register of financial statements and the fulfilment of accounting obligations, etc.

Some measures for the financial market

In order to mitigate the negative consequences of the pandemic and to support the operations of small or medium-sized enterprises (hereinafter referred to as “Small Employer”), the Ministry of Finance of the Slovak Republic may provide financial aid to these enterprises. Small and medium-sized enterprises are made up of enterprises which employ fewer than 250 persons and which have an annual turnover not exceeding EUR 50 million, and/or an annual balance sheet total not exceeding EUR 43 million. Financial aid will be provided via Export-Import Bank of Slovak Republic and Slovak Guarantee and Development Bank.

Form of the aid:

- Guarantee for loan provided by bank,

- Payment of interest from loan provided.

A) Conditions for a provision of guarantee for loans

1. it is not a Small Employer who has a license for agency recruitment issued under a separate regulation or a temporary agency for recruitment;

2. there are no:

- debts on social insurance or debts on pension savings contributions to Social Insurance Agency overdue for more than 180 days or

- debts for compulsory public health insurance to the health insurance company overdue for more than 180 days,

3. no bankruptcy or restructuring has been initiated against the Small Employer; and

4. the Small Employer meets the other conditions specified by the Bank.

B) Conditions for interest bonification

Must be a Small Employer, which:

1. during the period stated in the loan agreement concluded between the bank and the Small Employer keeps the employment rate defined in the loan agreement and

2. at the end of the period under letter a) will not have debts on social insurance, pension savings contributions and compulsory health care insurance after the due date against the Social Insurance Agency and health insurance company over the amount as stated in the loan agreement.

The government announced that it will provide bank guarantees in the amount of EUR 500 million per month for banks to be able to refinance, respectively finance entrepreneurs. Details, such as the amount of loan guarantees, are still being negotiated with the banks.

Measures with regard to fiscal rules

This part of the measures mainly concerns public administration and regulates the conditions of financing of municipalities and self-governing regions. As an example, for the duration of a pandemic situation, municipalities operating in a recovery or special administration can be used to cover expenditures incurred by a pandemic beyond the expenses of a crisis budget. The measure enables municipalities and self-governing regions to carry out budget changes in 2020 that will increase the deficit beyond 31^st August 2020. To sum up, these measures give to municipalities more freedom to use financial funds beyond the approved budgets.

The above measures are only part of a large package called Lex Corona. The Government and subsequently the National Council of the Slovak Republic should gradually take further measures to mitigate the effects of the crisis in connection with coronavirus and the impact of subsequent quarantine measures on the Slovak economy, which we will regularly report.