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Duties and Responsibilities of Legal Persons in Slovakia

After company’s registration you should take into account not only the requirements relating to the preparation of accounting statements, tax and other returns, but also other obligations or requirements. You should turn your attention primarily to the following:

 

Compulsory use of cash register in Slovakia

The cash register is a pain in the neck for Slovak entrepreneurs. This is due to the fact that many entrepreneurs had to buy a new cash register thrice in a short period of time. The first time was after the introduction of the euro in January 2009 with the need to show in the check the cost in two currencies: in the Slovak crowns (SKK) and Euros. By the way, this obligation is cancelled already, although many companies continue to show the cost in SKK of their own free will. The second purchase of cash register was made, as since 2012 cash register with “fiscal memory” only was allowed to be used, which was absent in old cash register. And the third time was in 2013, when since January 2014 amendments to Act came into force, prohibiting the use of cash registers without a certificate. However, this is a story of recent past, now all cash registers meet legal requirements, and no further changes are expected to be made.

The conditions of use of electronic cash registers are governed by Act 289/2008 on the use of electronic cash registers as amended. According to the Act, a cash register is always required when receiving cash or paying with card for any goods or specific services, among which following must be singled out:

  • repair, washing or leasing of motor vehicles,
  • parking services,
  • restaurants,
  • photographic activities,
  • beauty and hairdressing,
  • dry cleaning,
  • as well as several similar services.

It is important to bear in mind that a cash register receipt (cash voucher) should be always issued when receiving cash (or paying with card) for goods in Slovakia. It does not matter whether an entrepreneur receives money as an advance payment, partial payment or settlement of an invoice.

By the way, the Act applies only to payments in Slovakia. Consequently, it is allowed to sell the goods in Bratislava and get cash for these goods in 5 km from the center of Bratislava in  Raika (Hungarian village) or Kittsee (Austria).

There is one more rule regarding a cash register, which is an obligation to keep a communication cable to the cash register in order to connect a cash register to a computer at any time and for the purpose of control of financial statements by tax office. This is due to the fact that there were incidents when tax office could not connect to a cash register :-)

Also every sales outlet must have a visual example of cash receipt in a visible place, so it could be compared with a receipt that was issued to the buyer. The cash receipt shall include data required for the registration at the National Receipt Lottery:

  • the tax code of a cash register,
  • date, time, amount,
  • trademark MF.

Cash register tape must ensure safety and legibility of the data for a period of 5 years from the end of a calendar year in which they had been printed.

However, it should be noted that it is not allowed to accept any amount of money in the cash desk, as from the next restriction follows that the maximum amount of cash payment is 5,000 EUR.

 

Restrictions of cash payments in Slovakia

On 29 November 2012 the National Council of the Slovak Republic adopted a completely new law “Act No. 394/2012 Coll. on Restriction of Cash Payments”, which received a serial number 394/2012 and after it had been signed by the President, it came into force on 1 January 2013. This Act is very short and consists of 13 articles only, which can be listed on one sheet of paper.

Under the Act, cash payments exceeding 15,000 EUR between individuals who are not enterpreneurs and 5,000 EUR in all other cases (between companies) are banned. Consequently, the maximum amount of cash payment for goods or services is 5,000 EUR; it is, for example, for a new build apartment, a car in auto shows, furniture in the store, goods etc. Payment between two individuals with a maximum amount of 15,000 EUR – is, for example, for a used car or apartment of a person, who are not engaged in the sale of cars or apartments.

The cash register is used to avoid tax evasion by reducing incomings, when a confirmation of receipt of payment is not issued. Restriction of cash payments was also imposed as a part of the fight against tax evasion, when companies artificially overestimate the expenses at the end of the term for filing tax return. An explanatory note to the Act says that this innovation – is an attempt, based on the positive experience of other countries, to limit the use of fictitious cash orders (vouchers) as a confirmation of cash payment without a real flow of money, processed primarily at the end of an accounting period depending on the estimated tax base. 

Dividing the payments into several parts will not help, as the amount of cash payment, divided into several independent payments, represents the sum of partial payments if these payments relate to the same legal relations.

On the other hand, there may be several different services or goods or even one service, but several contracts between two parties. If, for example, a lease contract is concluded for one year with a monthly payment of 1000 EUR, the amount of the contract exceeds 5,000 EUR (12 x 1,000 EUR) and cash payment is not allowed, even if it is divided into several payments. However, if the contract is concluded separately for each quarter, we obtain four contracts, each with 3,000 EUR, therefore, cash payment is allowed.

This restriction applies to payments in any currency. It also applies to cash payment, that have been made abroad with the subject of the transaction in the territory of the Slovak Republic, if at least one party has a registered office, permanent establishment, branch, permanent or temporary residence in the territory of the Slovak Republic. Consequently, in case of a cash register it is important where the payment is made – in Slovakia or abroad, and compulsory use of cash register applies only to payments that have been made in the territory of Slovakia, the place of actual payment doesn’t matter while limiting cash payments.

The Act specifies certain exceptions, which relate, for example, to payments made to the state authorities (taxes, duties, dues and fees, penalties), postal services, money exchange, transport of bank notes and coins; and in special cases such as war or emergency.

Thus the innovation is applied, for example, in the following cases:

  • Iranian citizen with a temporary residence in the territory of the Slovak Republic sold an apartment, that is located in Bratislava to a citizen of Syria, who is on vacation in Thailand,
  • Purchase / sale of an apartment,
  • Purchase of furniture in the furniture store,
  • Purchase / sale of gold and precious stones,
  • Payment for the sale of goods to Russian company, if the transaction is made in Slovakia.

In the event of violation of this Act an individual who is not an entrepreneur will face a fine of up to 10,000 EUR and an individual-entrepreneur or legal entity – a fine of up to 150,000 EUR.

 

Anti-money laundering and countering financing of terrorism

If a cash register and restrictions of cash payments relate to taxes, the following restriction is based on the security of country or, it’s more accurate to say, the entire world community. However, terrorism threat and crime incomings are not appeared on the agenda of Slovakia.

However, anti-money laundering and combating the financing of terrorism is one of the topical issues and many politicians, lawyers, law enforcement, tax office and economists focus increasing attention on it. At EU level, the main legal acts are Directive 2005/60/ES of the European Parliament and of the Council on the prevention of the use of the financial system for the purpose of money-laundering and terrorist financing, as well as Commission Directive 2006/70/ES. In Slovakia, Act No. 297/2008 Coll. on the prevention of money laundering and terrorist financing came into force in 2008.

The Act clearly determines what is legalization, terrorist financing, unusual commercial transaction, as well as who is an obliged entity and what are his/her obligations.

An obliged entities according to this Act shall be understood to mean in addition to financial institutions also, for example:

  • accountants,
  • tax advisors,
  • individuals or legal entities authorized to mediate sale, rent or purchase of real estate (i.e. engaged in real estate activities)
  • individuals or legal entities authorized to provide the services of organizational and economic advisors.

It is important to note that activity of accountant, as well as the activity of organizational and economic advisors is private and it does not matter whether individual or legal entity is engaged in this activity, but important point is whether it has a license for this activity.

One of the main obligations of an obliged entity is a preparation of Own activity Programme aimed at the prevention of legalization and terrorist financing. The Programme shall be prepared in writing in the Slovak language, it shall be updated regularly and clearly conform to legal requirements. Our company can prepare Own activity Programme for you according to your requirements and business activity aimed at the prevention of legalization and terrorist financing. It will cost 399 EUR.

For reference, in case of absence of such programme, a fine may be imposed on an obliged entity, and the average amount of imposed fines is 2,000 EUR and the maximum amount is 165,969 EUR.

In addition to the programme, an obliged entity shall, for example, in a certain way identify the customer, find out who is the final beneficiary or final buyer, identify an unusual commercial transaction, and depending on the risk of money laundering or terrorist financing it is obliged to pay a standard, simplified or increased attention. These rules are, for example, the reason why a lot of banks require to fill in a questionnaire with detailed questions when opening an account.

From above mentioned follows that all legal entities licensed to engage in, for example, accountant’ activities, real estate activities or activities of organizational and economic advisors are required, additionally, to prepare its own activity programme aimed at the prevention of legalization and terrorist financing.

 

Protection of personal data in Slovakia

By analogy with anti-money laundering and terrorist financing, the Act governing the protection of personal data, are based on EU Directive. The main obligation, besides, of course, the protection and non-disclosure of personal data, is the registration of filing (information) systems, with the use of which personal data operations are carried out, if in the company work less than 20 employees.  According to the law a filing system is not only a computer program, but any personal database, file, list including a hard copy.

Filing system should be registered at the Office for Personal Data Protection of the Slovak Republic (Úrad na ochranu osobných údajov SR) and it is necessary to prepare personal data protection plan. An obligation of registration is required only for databases stored on computers connected to the Internet. If you have a database hardcopy and / or stored on a computer that is not connected to the network, the registration is not required.

You must register filing systems, where you accept and collect, i.e. keep database for the purpose of marketing, invoicing, but only in the case when these data relate to individuals, for example, customers, partners, and so on.

It is required to register:

  • filing system for invoices (when you issue invoices to individuals and collect their data)
  • e-shop filing system,
  • discount filing system (in the case of club (loyalty) card when you maintain database of customers who own a card)
  • marketing filing system (for advertising and offers mailout).

Therefore, the obligation of registration of filing system concerns, for example, every company which issues an invoice to individuals (of EU or non-EU member states – it does not matter).

There is no need to register the following filing systems:

  • employee file system,
  • accounting filing system,
  • filing system of security cameras (if they are used for property protection, and employees are aware that the cameras are used).

You should register every system individually and pay state duty in the amount of 20 EUR.

We have a great experience in the preparation of different documents, including personal data protection documents. The fee for registration of filing system in our company is 35 EUR and for preparation of personal data protection plan – 299 EUR.

 



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