Areas of Strength
- Slovakia has a programme in place to estimate and regularly report on the corporate income tax (CIT) compliance gap. This work is carried out by the Ministry of Finance’s Institute for Financial Policy (IFP) and the Financial Administration. Slovakia does not estimate the personal income tax (PIT) compliance gap. However, Slovakia participates in a joint PIT and social security contribution gap project as part of the TADEUS/FISCALIS cooperation framework at EU level.
- Slovakia has advanced the digitalization of its tax administration and provides a broad range of online tax services. Slovakia’s use of electronic reporting obligations and online cash registers has likely contributed to better transaction traceability. E-filing rates for VAT and CIT are very high, although there is scope to improve e-filing for PIT. Efforts to further digitalise tax administration, such as the planned shift to mandatory structured e-invoicing and real-time invoice data reporting, can also help improve tax compliance.
Areas for Improvement
- The VAT compliance gap remains above the EU average, although progress has been made over the last few years. Since 2019, the VAT compliance gap decreased significantly, moving closer to the EU average. However, in 2023, the VAT compliance gap remained among the highest in the EU, at 11%, pointing to the need to continue efforts towards strengthening tax compliance in accordance with the 2025 Country-Specific Recommendations.
- Challenges remain as regards the efficiency of its tax recovery system, as well as the effectiveness of enforcement. Slovakia reports a high level of outstanding stock of tax arrears (15.9% in 2023), out of which only 6.2% were considered collectible. This indicates that most unpaid taxes are not actively being recovered, due to procedural delays, legal constraints, or the absence of a systematic approach to writing off irrecoverable debts. At the same time, despite progress in digitalizing certain processes, the on-time payment rates are very low. The combination of high non-collectible arrears and low on-time payment rates suggests that the tax administration is struggling to convert its risk-based tools and digital systems into increasing the efficiency of its recovery system.
- While Slovakia has a dedicated tax expenditures manual and regular reporting, spending efficiency could be further improved by evaluating tax expenditures more systematically. The Ministry of Finance’s tax expenditures manual provides the basis of the analysis by defining tax expenditure, benchmarks, and the estimation method. Nevertheless, the evaluation of tax expenditures is more fragmented. Making the evaluation more systematic could allow Slovakia to build on its good analytical work in tax expenditures to improve spending efficiency in line with the 2025 Country-Specific Recommendations.
Tax Complexity
Slovakia ranks 18th out of the 27 Member States in the Tax Complexity Index (‘TCI’), where a higher rank corresponds to lower tax complexity. The TCI is based on the Global MNC Tax Complexity Project, a joint research project of Deborah Schanz (LMU Munich) and Caren Sureth-Sloane (Paderborn University). The TCI 2024 places Slovakia 15th among the Member States with regards to Tax Framework Complexity, and 21st with regards to Tax Code Complexity. This may indicate that there is room to improve the tax processes carried out by the tax authorities (notably in the area of enactment, according to the authors), and the same about the structure of the tax regulations (particularly in the area of corporate reorganisation, according to the authors).
The full Commission Staff Working Document of the Mind the Gap Report - Challenges and opportunities for tax compliance and tax expenditure in the EU regarding Slovakia can be found here.
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