8.02.2024 Taxes

[Slovakia] Annual Tax Reconciliation vs. Tax Return

Annual Tax Reconciliation is often mistaken by many for Tax Return. And although the objective is essentially the same for both (to calculate the last year’s taxes), we must, however, distinguish between the two concepts.

This is mainly because the annual tax reconciliation cannot always be processed by the employer and in certain circumstances, the employee needs to file a tax return on his own.

Fundamental difference

The employee can (but does not have to) ask his employer to process the annual tax reconciliation. Based on this request and the submitted documents, the employer will  process the annual tax reconciliation and include the result of the calculation in the employee’s March salary at the latest. The result can be overpayment, underpayment or “zero”.

An employee who had other income than income from dependent activity (e.g. income from business activities, leasing the apartment, personal assistance, competition, etc.) cannot apply for an annual tax reconciliation. Such an employee must file a tax return.

The tax return is filed by the employee himself; the employer does not take any steps here, does not process the tax return, nor does it help the employee with preparation (the employer only issues a Certificate of taxable income to the employee). The employee can use the services of a professional accountant or tax advisor to process his tax return.

The tax return must be filed by March 31 at the relevant tax office according to his place of permanent residence. If the employee needs more time to process and file the tax return, he will send a notification to the relevant tax office about the extension of the deadline for filing the tax return. The new submission deadline will be June 30 or September 30 at the latest (if the taxpayer received income from abroad).

In both the annual tax reconciliation and in the tax return for the year 2023, the employee can claim non-taxable parts of the tax base. Especially tax-free part per taxpayer; non-taxable portion per spouse; non-taxable part of supplementary pension savings and PEPP (up to €180). It is also possible to claim a tax bonus for a child or a tax bonus for interest paid. An employee can also donate 2% or 3% of tax to any registered non-profit organization.

An employee who had more than one employer, can ask any of them to process the annual tax reconciliation.

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