Transfer Pricing compliance overview of Slovakia

Executive Summary

General Requirements

• Transfer pricing in Slovakia is governed by the Income Tax Act (Act No. 595/2003 Coll.) and applies the arm’s length principle as defined in Section 18.
• Compliance obligations extend to both domestic and cross-border transactions between associated persons.
• Associated persons are defined by economic, personal, or other ties, typically involving a direct or indirect interest of at least 25% in capital, voting rights, or profit.
• Material controlled transactions are those where the value exceeds €10,000 for general dealings or €50,000 for loan principals.

Documentation Requirements

• Slovakia utilizes a three-tiered documentation framework consisting of full-scope, basic, or simplified documentation depending on taxpayer category and transaction value.
• Documentation must be finalized by the statutory deadline for filing the annual corporate income tax return.
• While documentation is not submitted automatically, it must be provided to the tax authorities within 15 days of a formal request.
• Large taxpayers following IFRS or engaging in transactions exceeding €10 million are specifically mandated to maintain full-scope documentation.

Results of Non-Compliance

• Failure to submit documentation or providing incomplete information can result in administrative fines of up to €3,000 per offense, which may be assessed repeatedly.
• Intentional reduction of the tax base through non-arm’s length pricing triggers a doubled penalty based on either 10% of the adjustment per year or three times the European Central Bank interest rate.
• Tax shortage penalties may reach up to 100% of the additionally assessed tax in cases involving intentional tax evasion or breach of general anti-abuse rules.
• Taxpayers may reduce penalties to 7% per year by filing a supplementary tax return within 15 days of the commencement of a tax audit.

Country Specific Information

• The statute of limitations for cross-border transactions is extended to 10 years from the end of the year in which the tax return was filed.
• If a taxpayer’s results fall outside the interquartile range, the tax authority is legally mandated to adjust the result to the median value unless specific justification for another point is proven.
• Thin capitalization rules limit the tax deductibility of interest and foreign exchange losses on related-party loans to 25% of the taxpayer’s EBITDA.
• Benchmarking studies are mandatory for full-scope documentation and are recommended every three years, with a requirement to update financial data for the comparable set annually.

Compliance Table

Document	Deadline	Language	Thresholds, Scope & Penalties
Local File	Within 15 days of request (must be available by CIT return date).	English, German, or French accepted; Slovak translation may be requested.	Full: Transactions >€10m or IFRS users. Basic: Transactions >€1m or revenue >€8m. Applies to cross-border and domestic. Penalty: Up to €3,000.
Master File	Within 15 days of request (must be available by CIT return date).	English, German, or French accepted; Slovak translation may be requested.	Mandatory for entities required to prepare Full or Basic documentation. Covers global group operations. Penalty: Up to €3,000.
CbC Notification	3 months after FY-end (same as CIT return deadline).	Slovak.	Mandatory for all Slovak resident constituent entities of MNE groups with revenue $\ge$ €750m. Penalty: Up to €3,000 (repeatedly).
CbC Report	12 months after the end of the group’s reporting fiscal year.	Slovak or English.	Mandatory for UPEs or designated surrogates in groups with consolidated revenue $\ge$ €750m. Penalty: Up to €10,000 (repeatedly).
Other (Simplified/Shortened)	Within 15 days of request.	Slovak.	Mandatory for micro-taxpayers, entities with tax relief, or small transactions (<€1m) if not meeting other triggers. Penalty: Up to €3,000.

Disclaimer: This information is obtained from secondary sources and is included for informative purposes. It should be confirmed by a local advisor.