The Government announced several changes in the corporate taxation area on June 20, 2017, including the introduction of a new patent box regime in line with the modified nexus approach developed as part of BEPS Action 5. The government also proposes the introduction of measures to comply with the EU anti-tax Avoidance Directive (Council Directive (EU) 2016/1164), including new exit taxation rules. The changes also include controlled foreign company (CFC) rules, and hybrid mismatch rules, as well as new transfer pricing rules regarding intangibles and measures against VAT fraud. A draft amendment to the income tax law of the Slovak Republic would, if passed by the parliament and signed into law by the president, introduce a number of new provisions. Some of the provisions were intended to be effective from January 1, 2018.

One of the provisions is patent box regime. This provision will support industrial research and development (R&D). An exemption will also apply by using registered patent or a technical design protected by a utility model and it applies to income that generates from the sale of manufactured products.

Another provision is about controlled foreign companies (CFC). The Slovak Government introduces some rules of CFC, which should be effective as of January 1, 2019. According to the proposal, some modifications in the definition of CFC included. A non-resident company will be treated as a CFC if it is controlled by a Slovak resident himself or jointly with his related parties by direct or indirect share participation in the share capital or voting rights of at least 50% or at least 50% profit share, and the corporate income tax of CFC paid abroad is lower than 50% of the Slovak tax. In such a case the corporate income tax base of CFC should be included into the corporate income tax base of its Slovak controlling company, taxed in accordance with the Slovak tax legislation and the respective part of the foreign tax paid can be credited against the final tax liability.

Other provision is about exit tax within domestic companies. It is proposed that within business structures of domestic companies, it will be possible to do contributions mergers, in-kind, demergers of companies in principle only at fair values for tax purposes.