From 1 January 2009, Slovak companies (and other legal entities) must keep written records of all cross-border transfers with related parties.
The contents of the records to be kept by the Slovak-based entity will be set out in regulations to be issued by the Finance Ministry. These include both ‘basic’ and ‘specific’ types of document for all controlled transactions with a value of €2 million or more, as well as simplified documents to demonstrate an arm’s length result.
The Slovak entity must submit detailed information to the tax administrator on all intra-group transfers of assets, goods or services in which it is involved:
- to obtain a tax base adjustment in favour of the foreign entity
- to approve the transfer pricing method issued by the tax administrator
- to introduce an advance pricing agreement with the tax administrator setting out a procedure for resolving transfer pricing issues in advance of a return being made, as required by OECD guidelines for international companies
The documents required are not expected to differ significantly from those required in previous studies involving controlled transactions. Holding companies which already have documents relating to intercompany transfers do not have to prepare a new set for those involving Slovak subsidiaries but will have some additional work to do to satisfy the Slovak tax administration.
Law: amendment no. 595/2003 Coll. on income tax as amended
