Consolidation measures and the financial transaction tax: What is changing in tax legislation from 2026?

Increasing the progressivity of personal income taxation

With effect from 1 January 2026, new bands of progressive taxation of personal income are introduced. In addition to the original rates of 19% and 25%, two further levels of rates will be added, of 30% and 35%, which will be graduated according to the amount of the tax base. The personal income tax rates for income from employment will henceforth be as follows:

• tax base up to EUR 43,983.32: rate 19%,
• tax base from EUR 43,983.33 to EUR 60,349.21: rate 25%,
• tax base from EUR 60,349.22 to EUR 75,010.32: rate 30%,
• tax base from EUR 75,010.33: rate 35%.

As regards income from business and other self-employment, the rates listed above will also apply, but only if the amount of taxable income exceeds EUR 100,000. However, if a natural person – entrepreneur achieves taxable income of up to EUR 100,000 (inclusive), the income tax rate of 15% will apply. The new tax rate bands will be applied for the first time for the 2026 tax period. When calculating advance payments of tax on taxable wages, the new rates will be used for the first time for the month of January 2026.

The special tax rate on income from employment of selected constitutional officials (e.g. members of parliament, the president, members of the government, etc.) is also being adjusted. In addition to the employment income tax rates listed above, an additional special rate will be applied, which is being increased from the original 5% to 10%.

Increasing the minimum monthly assessment base for paying insurance contributions for the self-employed

With effect from 1 January 2026, the minimum monthly assessment base for paying insurance contributions for the self-employed is being increased from the current 50% to 60% of the average monthly wage in the economy two years prior. This change will lead to an increase in the minimum insurance contributions that the self-employed will be obliged to pay to the Social Insurance Agency and the health insurance company. A new method of determining the assessment base is also being established:

• for the self-employed with an annual income higher than 50% of the general assessment base (for 2026: EUR 9,144.01 and more), the current method of calculating the assessment base is retained:
  • a share of 1/12 of the income tax base adjusted by items established by law and the coefficient 1.486.
• for the self-employed with an annual income lower than 50% of the general assessment base and for newly established self-employed persons (whose compulsory insurance arises from the 1st day of the sixth calendar month) will pay insurance contributions from a so-called special assessment base, which is 26% of the average wage in the SR two years prior. (AB for 2026: EUR 396.24, minimum contributions: EUR 131.34).

During the transitional period from 1 January 2026 to 30 June 2026, the old rules apply to self-employed persons who started doing business before 1 January 2026. From 1 July 2026, each self-employed person will be classified into the category of paying standard or special contributions.

At the same time, the health insurance contribution rate is being increased by 1 percentage point and 0.5 percentage point for persons with a disability, and this increase will apply not only to the self-employed and self-payers, but also to employees. We provide the new percentage amount of health insurance contributions in the table below.

The above measures will affect a wide range of working people, with the most significant impact on the self-employed who have so far paid insurance contributions from a lower assessment base.

Adjustment to the origin and termination of compulsory sickness, old-age and invalidity insurance and contributions to the solidarity reserve fund for the self-employed

The origin of insurance for the self-employed will no longer be conditional on reaching a certain income threshold. The changes will also affect, for example, the so-called contribution holidays. While newly established self-employed persons currently do not pay social insurance contributions during the first 12 months of business, from 2026 this period will be shortened to 6 months.

Compulsory insurance for the self-employed arises from the 1st day of the sixth calendar month following the month from which:

• the person is authorised to carry out business and other self-employment, or
• from which they carry out self-employment without authorisation (but at the earliest from the 1st day of the sixth calendar month following the month in which the declaration was delivered to the Social Insurance Agency).

The current method of the origin of compulsory insurance for the self-employed  was assessed as of 1 July or as of 1 October of the calendar year following the calendar year for which income from business and from other self-employment was higher than the income threshold established by law.

Insurance terminates on the day from which the person is no longer authorised to carry out or operate business and other self-employment, or from the day on which, according to their honest declaration, they do not carry out this activity, at the earliest from the day the honest declaration is delivered to the Social Insurance Agency.

The renewed origin of compulsory insurance for the self-employed is already from the first day from which the person is authorised to carry out business and other self-employment or from which they carry out self-employment without authorisation, in the case of repeated business within 60 months of its termination.

The amendment to the act on social insurance in connection with the consolidation package also contains other important changes, and therefore it is necessary to assess the situation of each self-employed person individually.

Adding a new band of minimum tax for legal entities

From 2026, a new band of minimum corporate income tax is being introduced, which will apply exclusively to companies with taxable income above EUR 5 million. Within this band, the minimum tax will be applied in the amount of EUR 11,520.

Extension of the deduction of expenses on investments until 2030

With effect from 1 January 2026, when deducting expenses (costs) on investments, the investment period is being extended from the current six years (2022 to 2027) to nine years, specifically from 2022 to 2030. The extension will apply not only to already existing investment plans, but also to new investment plans that will be implemented within the stated time horizon. The aim of the adjustment is to provide companies with greater flexibility and a longer time frame for implementing investments.

Restriction on VAT deduction for motor vehicles from 2026

With effect from 1 January 2026, the rules for applying the VAT deduction for motor vehicles of categories M1, L1e and L3e, which are at the same time long-term assets under § 52a para. 1 letter b), are changing. For these vehicles, upon acquisition, use and procurement of goods and services related to the vehicle (e.g. fuel, service, etc.), a VAT deduction of 50% or 100% will be possible.

A deduction of 100% will be possible only if the statutory conditions in § 85n para. 4 or para. 5 of the VAT Act are met, namely the following situations:

• 85n para. 4 of the VAT Act – If the taxpayer acquired or uses such a vehicle exclusively for business consisting of:
  • short-term hire or hire other than short-term hire of the vehicle (the taxpayer does business by hiring out vehicles),
  • transport of persons and their luggage for consideration including taxi services,
  • operation of a driving school, if the passenger motor vehicle is a training vehicle,
  • or if the taxpayer uses the vehicle exclusively as a demonstration, test or replacement vehicle.
• 85n para. 5 of the VAT Act – if the taxpayer uses such a vehicle exclusively for business, but must keep a record-keeping obligation (a so-called electronic logbook), which contains the relatively strict data established in § 85n para. 6 of the VAT Act.

The application of the full 100% deduction will at the same time be conditional on a notification obligation towards the tax administrator, on a structured form of the Financial Directorate of the SR. This notification obligation does not apply to passenger motor vehicles that the taxpayer acquired by 31 December 2025.

If the taxpayer does not meet the statutory exemption for applying the 100% VAT deduction, they will mandatorily apply a flat-rate VAT deduction of 50%. The non-deductible VAT of 50% constitutes a non-tax expense of the company and cannot be part of the tax input price for the purposes of tax depreciation.

HERE you will find the link to the methodological procedure for VAT deduction on motor vehicles.

Practical example

A company that is a VAT payer acquires in January 2026 a category M1 vehicle in the amount of EUR 20,000 excluding VAT, VAT 23% = EUR 4,600. The vehicle in question will be used, estimated, for both business and private purposes in a ratio of 70:30.

For comparison, under the current legal situation the payer could decide:

Procedure until 31 December 2025

1. a) VAT deduction from the acquisition price only to the extent of 70% of EUR 4,600, i.e. EUR 3,220. The remaining EUR 1,380 represents VAT related to private use, which the payer cannot deduct. At the same time, for the next 5 years they adjust the VAT deduction based on the actual use of the vehicle for business and private purposes, or
2. b) full VAT deduction, i.e. EUR 4,600, with subsequent monthly payment of VAT from the part of the monthly depreciation corresponding to the percentage of vehicle use for private purposes in the given month.

Procedure from 1 January 2026

The payer may apply a flat-rate VAT deduction of 50%, i.e. in the amount of EUR 2,300. The payer does not have to prove the actual extent of vehicle use for business and for private purposes. The non-deductible VAT of EUR 2,300 is not a tax expense of the company.

Changes to the act on the financial transaction tax

With effect from 1 January 2026, an amendment to the act on the financial transaction tax comes into force, bringing several important adjustments. The most significant is the exclusion of natural persons – entrepreneurs from the scope of taxpayers, so the financial transaction tax will no longer apply to them. Taxpayers will continue to be only legal entities that are the user of the payment services of a provider or a legal entity on whose behalf financial transactions are carried out.

The definition of taxpayers is also being adjusted, allowing for an unambiguous tax position and the scope of their tax liability. The definition of a permanent establishment for the purposes of the financial transaction tax is being supplemented, and the concept of a recharged cost is also being introduced. The act distinguishes taxpayers with limited and unlimited tax liability and also adjusts certain obligations in the payment of tax and related penalties. In connection with the amendment, the scope of the subject of the tax is also being updated, and certain institutions are excluded from the scope of taxpayers.

Extension of the period during which the employer pays wage compensation to the employee during temporary incapacity for work

From 2026, significant changes will occur in the area of employees' temporary incapacity for work. The most fundamental of these is the extension of the period during which income compensation during temporary incapacity for work is paid by the employer, from the current 10 to 14 days. The Social Insurance Agency will begin paying sickness benefits only from the 15th day of the duration of the incapacity for work, which will have a direct impact especially on employers in terms of costs.

At the same time, the current exemption from paying social insurance contributions by both the employee and the employer is being abolished in the case where, during a period of a specific situation (e.g. incapacity for work lasting less than 52 weeks, receiving maternity benefit), the employee has settled income for work in the previous period.

How to handle specific situations?

The greatest attention of companies was drawn by the planned restriction of the VAT deduction for motor vehicles to 50% where they are also used for non-business purposes, with effect from 1 January 2026. The tax advisers from CLA Slovakia answered questions sent in advance as well as those that were raised during the webinar, and helped clarify the practical procedure for applying the VAT deduction in specific cases. We thank them for their substantive and detailed answers and their contribution to helping companies navigate this topic. If you too need advice on how to prepare for the legislative changes effective from 2026 or how to apply them in practice, you can turn to the team of experienced professionals in tax advisory at the company CLA Slovakia s. r. o.