Substantial Amendment To VAT Act

The new amendment to Slovakia's VAT Act inter alia complicates the transfers of shares in limited liability companies.

Due to protracted problems with its budget deficit, the new Slovak government decided to pass an amendment to the VAT Act ("VAT Amendment") which should take effect on 1 October 2012 and is aimed at eliminating fraudulent actions damaging VAT collection. This new piece of legislation is quite far-reaching and touches not only the field of tax law, but also corporate law and criminal law.

Corporate Law Aspects

Setting up a limited liability company

The VAT Amendment changes the provisions of the Slovak Commercial Code in such a way that it shall be required for the founder of a limited liability company – the Slovak analogy to GmbH - to be a person having no tax arrears. Prior to filing an application for the registration of a limited liability company ("LTD"), the founder - including a foreign one - must ask the Slovak tax administration