SCOPE OF AUTHORISATION OF THE CUSTOMS AUTHORITIES REGARDING CUSTOMS DEBTS
Through this provision, conditions are defined for returning of customs debt, of taxes and of other payments by the Customs Directorate and by Customs Authorities, which were originally collected on the import of goods.
INCOME TAX DEDUCTIBILITY OF IRRECOVERABLE VAT
The Ministry has established procedures for including VAT as a tax deduction for income tax purposes. Such issues arise where the VAT payer is either partially or totally exempt from VAT so that VAT incurred represents an absolute cost to that VAT payer.
VAT AND FOREIGN EXCHANGE
This provision states that, for the purposes of calculation of VAT on transactions denominated in foreign currency, amounts should be converted into the Slovak currency according to the exchange rates published in the table of exchange rates of the National Bank of Slovakia.
VAT ON TRAVEL REIMBURSEMENTS
The Ministry issued a statement pointing out that a VAT payer is not entitled to a deduction of VAT when reimbursing business trips of employees according to the Act on Travel Reimbursements (expensing of accommodation, fuel, travel etc.) if the VAT documentation does not show the employing VAT payer as the recipient of the taxable supply.
BAD DEBTS INCOME TAX RELIEF
This instruction states conditions for and the required documenting of bad debts for the purposes of their classification and their inclusion as deductible for tax purposes. For example, bad debts may be tax deductible due to bankruptcy being refused by court as a result of the debtor being declared as having insufficient assets to pay its debts.
ACCOUNTING FOR OPTIONS
Methods are set out for defining and for documenting of an option payment to determine correct accounting and tax effects. In particular, the Ministry view is that options are only tax deductible when the option is exercised, and hence that lapsed options are never tax deductible. Nevertheless, this view could in future be challenged by taxpayers on the grounds that the expense is incurred for generating, maintaining and assuring income.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
For further information contact Ruth Clamp, Arthur Andersen Bratislava on tel:+42 7 5340 545, fax: +427 5340 542 or e-mail directly to ruth.a.clamp@ArthurAndersen.com, or enter a text search 'Arthur Andersen' and 'Business Monitor'.
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21 October 1996