In September, the Ministry of Finance of the Slovak Republic introduced a draft bill amending the Act on income tax. Inter alia, the proposed amendments aimed to affect the taxation of the public beneficiary organizations (PBOs) and the system of the income tax assignation for public beneficiary purposes.
Primaily, the proposed amendments would have restricted the possibility for legal entities to allocate up to 2 % of their tax income and the minimum amount of the assigned proportion would have been 250,- Sk (approximately € 7,-) for both private and legal entities. The original minimum amount of the assigned proportion had been 20,- Sk (approximately € 0.6,-) for individuals and 250,- Sk for legal entities. Also, the proposed amendment foresaw the abolishment of the income tax exemption of 300 000,- Sk (approximately € 8 500,-) coming from the business activities of PBOs.
After the draft bill had been introduced to the public, comments were submitted to the Ministry of the Finance requesting the exclusion of the provisions concerned from the draft bill. Even though the comments of the public have not been accepted by the Ministry, the National Parliament adopted the proposed modifications with changes. The minimum amount of the assigned proportion of the paid income tax, from the year 2007, was increased from 20,- to 100,- Sk (approximately € 3,-) for private entities (individuals). The minimum limit has not changed for legal entities. The extent of tax assignation in percents has not changed and is 2 % for natural persons as well as legal entities.
As of 2008, the area of activities for which the assignation may be used will be narrowed to the following:
- protection and enhancement of health; prevention, treatment, re-socialization of the drug abusers in the sector of public health care and social services,
- advancement of sports activities of children, young people and people with disabilities,
- providing the social help,
- preservation of the cultural values.
Also, PBOs' income from business activities up to the 300 000,- Sk is not tax exempted any more as it had been according to the original legal regulation. The 1. Slovak Non-for profit Center will initiate the legal changes in this issue in order to re-establish the original legal regulation of the 2 % paid tax assignation for the special purposes.