Will the new approach to reporting material transactions really help to reduce the administrative burden on taxpayers?
The Ministry of Finance of the Slovak Republic published in the Financial Bulletin updated Guideline No. MF/012879/2025-724 on the determination of the content of transfer documentation between related parties pursuant to Sec. 17(7) and Sec. 18(1) of Act No. 595/2003 Coll. on Income Tax, which introduces the following changes.
Simplification of the Documentary Obligation
- For controlled transactions for which the full or basic documentation does not need to be prepared, the documentation obligation will be fulfilled by filing a properly completed income tax return form for the relevant tax period.
- Material controlled transactions that will not be included in the tax return (e.g. due to an insufficient number of lines) will be reported by the taxpayer in the simplified documentation.
Extension of Table I of the Tax Return Form
- Table I of the corporate income tax return form will be significantly expanded.
- It will now include all material controlled transactions with related parties , regardless of the type of documentation maintained.
- The new information that will be reported separately for each material transaction includes:
- type of transaction (e.g. sale/purchase of materials, products, goods, services, royalties, interest on loans, bonds, cash pooling, insurance premiums, warranties, contract manufacturer’s compensation payments, year-end compensation adjustments, etc.),
- value that affects profit/loss (tax base),
- the name of related party (first and last name in the case of a natural person), and
- state code.
What is a Material Controlled Transaction?
As a reminder, a material controlled transaction is defined as follows:
- a legal or other relationship on the basis of which, in the relevant taxable period, the related party achieves taxable income (revenue) or tax deductible cost (expense) in excess of EUR 10,000, but also
- a loan or credit with a principal amount of more than EUR 50,000.
The new approach will apply for the first time to documentation for tax years for which the filing deadline is after 31 December 2025 – therefore including the tax returns for 2025.
If you have any questions or need help with the preparation of the transfer documentation, please do not hesitate to contact us.
We will be happy to help you.
