The Parliament of Slovak Republic has approved the proposed changes regarding the Income Tax Act on 30th October 2014 and it is to be in effect from 1st January 2015. The amendments are basically held on thin capitalization rules, local transfer pricing rules. The thin capitalization rules initiate a restriction of tax deductible 25% EBITDA (earnings before interest, taxes, depreciation and amortization) interest from loans provided by local and foreign related parties. Under the proposed amendment, no carry-over is permitted. The rules related to transfer pricing are currently appropriate to transactions between foreign related parties only, and were prolonged and should be equally usable to local related party transactions.
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