Amendment to the Slovak income tax act – taxation of corporate bonds

UniCredit Bank Czech Republic and Slovakia, a.s., pobočka zahraničnej banky
Tue, 11/04/2023

On 29 March 2023 the Slovak Parliament approved the amendment to Act No. 595/2003 on Income tax. The amendment cancels the 19% withholding tax (WHT) rate on the interest for domestic corporate bonds being paid by foreign investors, which was implemented on 1 January 2023. The amendment is expected to come into effect on the date when published.  The exact date will be subject to further confirmation. 

The amendment will need to be signed by the Slovak President and published in the collections of laws.

The WHT on corporate bonds for foreign residents was implemented at the beginning of  2023 without preliminary discussion in the local market and, after strong lobbying from the market participants, this duty is to be deleted by this amendment. 

Impact on investors: By this amendment the obligation of foreign investors to pay WHT on interest from domestic corporate bonds is cancelled. However, it is expected that the issuers will request the beneficial owner’s disclosure or confirmation that the corporate bonds are not held by Slovak private individuals, who continue to be subject to the 19% WHT.