Amendment to the Act: changes in income tax 2021

Changes in income tax from 1.1.2021

The broad amendment to the Income Tax Act brings a number of significant changes since the New Year. We bring you an overview of the most important ones.

Exemption of corona contributions from taxation

An exemption from taxation is introduced for transactions provided under an active labour market policy. I.e. contributions granted by the State to maintain employment or due to a fall in revenues during the coronavirus pandemic period are not subject to taxation. The exemption already applies to income tax returns for 2020.

However, taxpayers must be careful thatexpenditure at the expense of contributions must also be exempted from taxation and will not reduce the tax base . If the taxpayer has received a contribution to the employee's salary, hewill not tax the contribution received from the State, but at the same time the corresponding wage cost will not reduce his tax base.

Limitation of the preferential 15 % tax rate

Unlike in 2020, when a tax rate of 15% was applied to income (income) up to €100,000, in 2021 only the taxpayer who earns income (income) of less than €49,790 (the so-called micro-taxpayer) applies the tax rate. To taxpayers above this threshold, all income (income) is taxed at a tax rate of 21%.

Write-off of the receivable from the micro-taxable amount

In the case of a claim for which there is a risk that the debtor will not pay it (the so-called irrelicable claim), the micro-taxable person will not have to wait 3 years to apply 100 % tax expense to that claim in the form of a repair item or depreciation, but will apply 100 % tax costs already in the tax year in which he will charge 100 % depreciation of the unenviable receivable (even before 3 years lys From 2021, a taxpayer with a turnover of less than €49,790 will be considered a micro taxpayer.

Abolition of the exemption of the 13th and 14th salaries from taxation

Unlike in 2020, it will no longer be possible to apply the 13th and 14th tax exemptions in 2021 if the employer provides such 13th and 14th salary to his employee.

Abolition of the spa care benefit

From January 2021, the non-taxable part of the spa care tax base is abolished. At the same time, the preferential depreciation of buildings used for spa care is abolished.

Amorning tax losses

Unlike in 2020, when a taxpayer could amorte tax losses for exactly 4 consecutive tax years of 25% per annum, from 2021 on the basis of 2021, it will already be able to amorise tax losses for up to 5 consecutive tax periods (i.e. even before 5 years have elapsed), up to 50 % of the tax base (i.e. the profit or loss adjusted for at-chargeable and deductible items) or up to 100 % of the tax base if it is a micro-taxable person.

As mentioned above, a taxpayer with a turnover of less than EUR 49 790 will be considered as a micro-taxpayer from 2021.

Change in depreciation of assets at the micro-taxable amount

From 2021, the micro-taxpayer may tax the depreciation of tangible assets included in depreciation groups 0 to 4 (excluding luxury cars) before the statutory depreciation period expires. This means that if a taxpayer procures, for example, a motor vehicle, it may not apply depreciation on that vehicle for up to 4 years, but it may reduce its tax base by depreciation earlier.

Changes in the provision of the tax bonus

From 2021 , the tax bonus for dependent children between the age of 6 and 15will be increased by increasing to 1.7 times from 1 July 2021 and to 1.85 times from 1 January 2022 . Dependent children under the age of 6 pay a 2-fold tax bonus and the basic amount of the tax bonus applies to dependent children over 15 years of age. Thus, in 2021, the tax bonus will be determined as follows:

Monthly child tax bonus amount valid from 1.1.2021 to 30.6.2021

per child under 6 years of age (2 times height) 46,44 €
per child over 6 years of age (basic height) 23,22 €

Monthly child tax bonus amount valid from 1.7.2021 to 31.12.2021

per child under 6 years of age (2 times height) 46,44 €
child over 6 years of age up to 15 years of age (1.7 times the height) 39,47 €
per child over 15 years of age (basic height) 23,22 €

Changes in the case of advances on tax

From 2021, the obligation to make advances to legal persons is abolished where, on the basis of the last tax return submitted, a legal person should pay higher advances than it paid in that year on the basis of the previous tax return.

From 2022, the amount and maturity of tax advances will already be notified to taxpayers by the tax administrator.

Preparation of the annual tax account

Under the new rules, an employee will already be able to request the annual accounts of any employer, and therefore not only of the employer with whom he last claimed the non-taxable part of the taxable amount.

The employee will be able to request that any employer's annual accounts be carried out as early as the 2020 annual accounts have been carried out.

Abolition of the registration requirement for income tax

From 2022, the registration requirement for income tax is abolished. This obligation shall be fulfilled automatically on the part of the taxable person by the tax administrator. In 2021, the taxpayer will still have to comply with the income tax registration obligation.

Finally, we would like to point out that we have mentioned the above changes in a simplified interpretation. When applying a specific provision of the law, we recommend that you always consult a tax advisor in advance.

Mgr. Ing. Ľuboš Čandik
Author of the article
He studied corporate management at the University of Economics and the Faculty of Law in Bratislava. Since 2005, he has worked for several major tax consultancy companies of international focus. It focuses on income tax, VAT, international taxation, tax optimisation, social and health regulations, labour and business law. He has been tax adviser since January 2013. He speaks fluent German and English.

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