Amendment to Act no. 92/2022 Coll. effective from March 30, 2022, regulates, among other things, the provision of accommodation allowances for temporary refugees from Ukraine. The amounts of contributions, the conditions for obtaining them, their obligation to depend on whether the applicant for the contribution is an entrepreneur or a non-entrepreneur.

The accommodation allowance, if the applicant is a non-entrepreneur, is further regulated by the Asylum Act, and amounts to EUR 7 per night of the accommodation per person (or EUR 3.5 in the case of accommodation for persons under 15 years of age). However, the total amount of contributions provided for a calendar month (or part of it) for all tenants is limited depending on the number of living rooms of the real estate in which the tenants' accommodation is provided. In the case of one living room in the property, a contribution of up to EUR 500 per calendar month or part thereof may be granted. With each additional living room in the property, the maximum amount of the contribution is then EUR 250, up to EUR 1,250 for four or more living rooms.

If, on the other hand, the applicant is a business entity, the amount of the contribution is slightly higher - EUR 7.70 per night for the person's accommodation (or EUR 3.85 if the accommodated person is under 15 years of age). More details of the provision of this contribution to entrepreneurs are regulated by the Act on the Promotion of Tourism.

The Financial Directorate of the Slovak Republic issued a methodological guideline on 12 April 2022 in order to ensure a uniform procedure for taxing these accommodation allowances in accordance with the Income Tax Act.

Taxation of the accommodation allowance provided to a legal entity

Subsidies and contributions that are provided from the state budget or from the European Union and other sources are generally subject to income tax and are taxable income.

If the municipality provides a contribution for the accommodation of a resident under the Asylum Act to an authorized person who is a legal entity and who does not have exempt rental income, the income from the provided contribution will be included in the tax base in accordance with accounting in that tax period, in which the conditions for accounting for entitlement to the contribution are met.

Expenditures of a legal entity, e.g. operating expenses for services and energy provided for housing e.g. expenditure on the operation of a non-residential building used for short-term accommodation is a tax expense if the income from the provided contribution is taxable income (without assuming future costs).

The contribution under the Tourism Act, which is provided to a legal entity providing accommodation in accordance with accommodation in a given facility in connection with the performance of a business activity, also applies to the base for tax during this period in which the conditions for charging the subsidy are met.

Likewise, the expenses of such an authorized legal entity incurred in connection with accommodation facilities are tax expenses.

Non - established taxpayer

However, if the income from the taxpayer's accommodation allowance is not established or not established for business, while the rental income (contribution) is exempt from tax, the income from the posted contribution is not included in the tax base and expenses that can be directly attributed to the contribution, e.g. expenditure (costs) on energy consumption in the provided real estate of a non-residential building, serving or as a tax expense.

Taxation of the accommodation allowance provided to a natural person

Income exempt from tax under the Income Tax Act includes, among others, subsidies and contributions provided from the state budget, municipal budgets, higher territorial units and state funds. The allowance for accommodation of a temporary refugee according to the Asylum Act as well as the allowance for accommodation according to the Tourism Act is provided from the state budget.

The exemption of a contribution under the Act on the Level of a Natural Person depends on whether it is provided in connection with the performance of an activity from which income derives under Section 6 of the Income Tax Act or, conversely, in connection with such activity.

If the contribution under the Asylum Act is not provided to a natural person in connection with the performance of business, other self-employed activity, etc., it is considered as income exempt from personal income tax, which is not included in the tax base.

Conversely, if a contribution under the Asylum Act is provided to a natural person in connection with a business, then it is not exempt from personal income tax and is included in the tax base. Similarly, an accommodation allowance under the Tourism Promotion Act is not an exempt income if it is provided by a natural person who provides accommodation on the basis of a trade.

Expenditures incurred by the taxpayer in connection with the provision of accommodation for which the contribution was provided included in the tax base (eg operating expenses for services and energy of real estate provided for housing) are tax expenses.

In a situation where a natural person accounts in the system of simple accounting or keeps tax records, he will include the received contribution for accommodation among the taxable income at the time of its receipt, as it is not a contribution provided for the purpose of covering expenses.

A taxpayer who is a natural person and who applies the so-called the flat-rate expenditure (i.e. as a percentage of income) will include the contribution received as taxable income at the time of receipt.

A natural person accounting in the double-entry bookkeeping system will include the contribution, which is taxable income, in the tax base in accordance with double-entry bookkeeping in the same way as a taxpayer who is a legal person entrepreneur.