We have already brought you several articles about the government's efforts to mitigate the negative effects of the coronavirus on the state economy. We have also set up the Covid-19 Resource Hub for our clients, where you will find all the necessary and up-to-date information. In today's Tip of the week, we bring you brief information about the latest tax measures.

To mitigate the negative consequences of the pandemic of the new COVID-19 virus on taxpayers, the Government of the Slovak Republic in cooperation with the Ministry of Finance of the Slovak Republic, presented a package of tax measures. Part of this package of measures is also the possibility for taxpayers to claim a deduction of as yet unapplied tax losses reported for tax periods ended in the years 2015 to 2018 according to the so-called Lex Corona.

Following the ambiguities that arose during the interpretation of Lex Coron, the Financial Directorate of the Slovak Republic specified that it is possible to use only such a loss, to which the taxpayer is entitled under the Income Tax Act in the tax period of 2019. This means that the taxpayer are allowed to deduct only those parts of the tax loss for which the deduction right did not expire in previous tax periods due to the recognition of an insufficient amount of the tax base. The total amount of loss that can be amortized is EUR 1 million.

This preferential deduction of loss can be applied only once, in the income tax return, for which the deadline for filing expires in the period from 1 January 2020 to 31 December 2020.

The application of the deduction of tax losses reported for tax periods ended in 2015-2018 according to Lex Corona is not obligatory for the taxpayer, and the taxpayer may continue to proceed in accordance with the Income Tax Act (i.e. claim tax losses of ¼) if it is more advantageous.

The above information is current as of 22.5.2020 and is of a general nature only. The information does not contain all the details and specific situations in which you might find yourself.

If you need advice on this issue, we will be happy to help you. Write to us at support.covid19@vgd.eu. You can find other useful articles and information on our website, Facebook and Linked-In.