Capital Gains Taxation in Slovakia
In Slovakia, capital gains are subject to taxation under the Income Tax Act (Zákon o dani z príjmov). The Act defines capital gains as profits arising from the sale or disposal of certain assets, including:
- Real estate
- Stocks and bonds
- Business assets
The distinction between short-term and long-term capital gains is not relevant for tax purposes in Slovakia.
Calculating Taxable Capital Gains
Taxable capital gains are calculated as the difference between the selling price of the asset and its acquisition cost. The acquisition cost includes the original purchase price, as well as any expenses incurred in acquiring the asset, such as brokerage fees or legal fees.
Adjustments or deductions may be allowed in the calculation of the gain, including expenses related to the sale (e.g., brokerage fees, legal fees) and any improvements made to the asset during ownership.
Tax Rates
Capital gains in Slovakia are taxed at a flat rate of 19%. This rate applies to both individuals and corporations.
Legal Framework
The taxation of capital gains in Slovakia is governed by the following articles of the Income Tax Act:
- Article 8(1)(a) defines capital gains as profits arising from the sale or disposal of certain assets.
- Article 10(1) sets the tax rate for capital gains at 19%.
Policy Objectives
The Slovakian government's policy objectives behind the taxation of capital gains are to:
- Ensure that individuals and businesses contribute their fair share of tax on profits realized from investments and asset disposals.
- Maintain a neutral tax treatment across different sources of income.
- Promote investment and economic growth.
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