The Government of the Slovak Republic has submitted a proposal for an abbreviated legislative procedure on the Government’s draft law on the solidarity contribution from activities in the oil, gas, coal and refinery sectors and on the amendment of certain laws, thereby responding to the adoption of Council Regulation (EU) 2022/1854 on emergency intervention (“the Regulation”). This law is intended to address high energy prices. Under the Regulation, companies generating at least 75% of their turnover from activities in the oil, gas, coal and refinery sectors, which have seen their profits increase as a result of the sudden and unforeseeable circumstances of the war in Ukraine, are to make a proportionate contribution to alleviating the energy crisis in the relevant EU internal market.
Following the above-mentioned Regulation, the Government of the Slovak Republic has submitted a draft Act introducing a new mandatory temporary solidarity contribution of legal entities and permanent establishments of foreign persons in the Slovak Republic that are active in the oil, gas, coal and refinery sectors.
The contribution will be calculated as the product of the rate and the contribution base, with a proposed contribution rate of 70%. The contribution base is the difference between the tax base of the comparative tax period (beginning in 2022 or 2023) and the average of the tax bases of the comparative tax periods (four consecutive tax periods, the first of which began after 1st January 2018), increased by 20%. The contribution base is calculated on the basis of the income tax base less the tax loss deduction, the deduction for research and development expenditures and the deduction for investment expenditures.
This new draft act also amends the Income Tax Act, i.e. the contribution paid is to be considered a tax expense.
The effectiveness of this new act is proposed from 31st December 2022.
However, considering the current political and economic situation, and the negative reactions of some energy companies and unions to 90% taxation of excess income from the sale of electricity in terms of the amendment to the Energy Act, the future survival of this proposal is highly uncertain.