Tax & Legal Services
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KPMG in Slovakia 3 | Tax and Legal Services Clear, unique, innovative and committed to serve our clients. Tax & Legal Services of KPMG. Tax and Legal Services | 4
Tax & Legal Services
The Slovak legislative environment adapts rapidly as the economy changes to adjust to current economic trends and EU requirements. In addition to new or amended legislation, there are significant changes in the interpretation of existing regulations. In these circumstances, effective advice and innovative planning can give your business the competitive advantage. Our tax and legal practice shares the same core KPMG values of clarity, excellence, innovation and, most of all, client service. We offer a range of domestic business and personal services designed to meet the needs of your business, regardless of its size. Because we know how complex tax and legal matters can be, we make it our business to stay abreast of new laws, policies, accounting and commercial principles, and international tax treaties. Our aim is to turn this knowledge into value for the benefit of our clients.
Tax Legal Compliance Services +Services = 5 | Tax and Legal Services
Tax
Services Tax is a cost of doing business and a key part of the business environment. Companies need to adapt to the tax environment in which they operate, ensuring that they meet the requirements of the environment, and that they mitigate unnecessary costs and maximize planning opportunities. Slovak tax legislation and practice is in a state of continuous change and development. The changes are influenced by a variety of factors, including the desire to adapt to the current market environment, as well as to close tax loopholes and bring Slovak tax laws into line with more developed economies. However, the interpretation and enforcement of tax laws and regulations can be unpredictable in practice, and penalties for non-compliance remain. Having said that, many opportunities exist for tax savings and efficient tax planning. Because we know how complex tax matters can be, both in the Slovak Republic and in foreign markets, we make it our business to keep attuned to changes in domestic and international tax laws, policies, accounting and commercial principles, and international tax treaties. Our aim is to turn this knowledge into value for the benefit of our clients. We listen to our clients to understand their needs, and then we contribute where we can add most value. That might mean drawing on our knowledge and experience of working with other clients and regulators to help anticipate and respond to change, or it could be overlaying our understanding of your business at the national level with what we know has worked in other countries. Tax and Legal Services | 6
Our key tax services include advice and services in the following areas:
Corporate CIT Preparation CIT advisory Mergers & Transfer Income Tax registration of CIT returns services Acquisitions pricing
Value VAT advisory VAT registration VAT compliance VAT review Added Tax services
Personal Preparation of PIT returns Other compliance services Income Tax
State Aid State aid applications and compliance State aid advisory
Payroll & Accounting Payroll services Accounting services Services
Other Tax Services Other taxes and customs duties Tax administration 7 | Tax and Legal Services
Corporate A relatively low headline rate does European countries. The actual Income Tax not have to mean low tax cost. corporate tax incurred can, however, be While the „headline“ tax rate in Slovakia very significant. We can work with you to was reduced to 19% over the past years, help minimize your tax costs and to help increased to 23% from 2013 and reduced identify comprehensive commercial to 22% from 2014, it is still a lower rate strategies to address tax problems and than the tax rate in many western opportunities arising from your business activities.
50 45% 45 40% 40 35 29% 30 25% 25 23% 20 19% 15 22% 10 5 0 1993 1994 2000 2002 2004 2013 2014 Tax and Legal Services | 8
Preparation Corporate income tax returns are often we aim to bring to your attention the tax of CIT returns challenged by tax authorities. Our risks and opportunities arising from your corporate tax compliance services include business, and suggestions for further the preparation or review of corporate procedural or planning opportunities. income tax returns. During this process
CIT advisory Local and international tax issues both avoiding double taxation and services need to be addressed in time. While identifying opportunities for minimizing the impact of taxation on transactions the overall tax burden. With our expatriate within national boundaries is important, tax professionals, and KPMG member the impact of taxation on cross border firms‘ global network, we work closely transactions can be even more critical to a together to produce tools tailored to your business. Understanding the tax systems individual needs and circumstances. in the countries involved is fundamental in
Mergers We can help ensure that design deals that take account of the acquisitions create shareholder exposures and opportunities revealed & Acquisitions value. We offer a wide range of M&A during tax due diligence. We can also tax services covering various phases of help during negotiation and deal domestic and cross-border transactions: execution, by focusing on the tax Tax due diligence services can track down efficiency of contractual arrangements, the tax information that the acquirer and the value of warranties and or vendor needs to answer the vital indemnities in contracts. In due diligence questions; where’s the tax exposure and and deal structuring, we assess the value what can be done about it; where are the of the target’s tax attributes, identify tax opportunities and how can they be contingent tax liabilities, and address captured? By structuring acquisitions and other important, but often overlooked disposals with our technical structuring issues, such as asset retention, debt know-how, and an understanding of each placement, separation agreements party’s business priorities, we help to and exit plans.
Transfer Transfer pricing is a business matter. documentation requirements were pricing Transfer pricing affects the terms of introduced. Businesses must, therefore, transactions with related parties which plan now for compliance with the must be compliant with the arm’s length new rules and anticipated future requirement. It is a dynamic area of developments. Tax authorities often international tax, and we can anticipate scrutinize transactions with foreign further changes in Slovak tax law and related parties, and challenge transfer practice in the future. With effect from pricing documentation which does not 1 January 2009, formal transfer pricing comply with the requirements for its contents. 9 | Tax and Legal Services
Value VAT issues are more complex caused major changes in how a company Added Tax than ever. Failure to comply with VAT does business. We offer both compliance requirements can represent a significant services and advisory services to help expense for your business. Legislation identify the risks and opportunities that and requirements in this area change may arise in relation to the new regularly, in part due to the accession legislation. As part of our services we of Slovakia to the European Union on look closely at the business model used, 1 May 2004, which in many cases has since modifications to structure can often lead to significant cost reductions.
Personal Personal income tax compliance personal tax compliance services to Income Tax is an issue for all employers and provide you with a single source for individuals. Our International Executive addressing all international assignment Services tax professionals provide business issues. We can assist you in comprehensive compliance, advisory and determining the social and health administration services to support your insurance treatment of your assignees or assignees as well as entrepreneurs. We employees, and address the impact of EU offer both personal tax planning and regulations in this area. Tax and Legal Services | 10
State Aid A duly drafted application and available financing sources for purposes connected with, among others, planned and EU Funds entire process management is a must. Over the past few years the Slovak investment, creating new workplaces, investment incentives regime has been development and research projects, subject to continual change to meet the and training for employees. The proper challenges of Slovakia‘s developing preparation of state aid strategy, economy. KPMG in Slovakia has a Grants applications, fulfilment of numerous & Incentives Team dedicated to providing formal requirements, as well as services for entities interested in winning negotiations with public authorities public financial support for their activities, (Slovak and/or EU) are all critical for and advisory in the scope of state aid. Our effectively obtaining and using grants team assists in the effective use of and incentives.
Payroll Payroll and accounting are func- Our team comprises very experienced and Accounting tions often outsourced to specia- specialists who maintain the payroll lists, either for efficiency reasons, agenda and accounting records for a Services or in order to secure the confiden- number of clients, and can deal with tiality of payroll data. We offer our complex issues. clients maintenance of their payroll agenda, as well as accounting services.
Other Customs duties or other business duties, property tax, motor vehicle tax and Tax Services taxes are trade expenses which can other taxes. We monitor developments in often be managed. Our services include these areas to provide you with up-to-da- advisory in customs matters, excise te and accurate information. 11 | Tax and Legal Services
Legal
Services Around the world, our clients face an increasingly complex legal and regulatory environment that has a significant impact on their day-to-day business activities and future strategies. KPMG provides its clients with a unique combination of standard KPMG services and high-quality and properly tailored legal advice. To help clients cope with legal issues in their day-to-day businesses and save costs and effort, we can deliver complex, one-stop-shop services. Tax and Legal Services | 12
Our key legal services include:
Compliance Organizational Risk Audits Management Contract and Regulatory matters Assessment and DDs Advisory Management
Post-closing M&A Restructuring Acquisitions Assistance
Company Law Company Matters Shareholders’ Issues
Financial Services Banking and Capital Markets Insurance
Real Estate Acquisition and Disposal with Real Estate Construction Matters and Construction
Private Wealth Estate Planning Tax Planning
Health and Production and pharmaceutical Health Insurance Health Care distribution of Price regulation law pharmaceuticals 13 | Tax and Legal Services
Compliance In the field of compliance and management on specific compliance issues (including governance matters and regulatory matters, KPMG can effectively help you to improve and and liability matters), advice on legal Regulatory operate a Compliance Management requirements for the internal audit system. We can provide you with department; implementation of guideline qualified and meticulous legal support, management and review of guidelines, tailor-made to the needs of your business, legal advice on building a contract covering mainly: organizational advice management; and international advice from the legal point of view, implementa- on issues relating to product recalls and tion of compliance trainings for client’s product safety. We build our expertise management or employees, performance on our wide and comprehensive of compliance risk assessments, audits sector knowledge, and permanent and due diligences, legal advice to communication with the relevant national and EU public authorities.
Mergers & KPMG has significant in-depth experti- acquisition of businesses or their parts or Acquisitions se in restructuring projects (national and particular assets). KPMG can provide you cross-border), such as group reorganiza- with qualified legal assistance throughout tions, mergers - demergers, re-domicilia- the full cycle of these transactions tions, as well as acquisition transaction (negotiation, pre-closing phase, closing (including takeovers, share deals, and post-closing assistance).
Company Our help in the field of company law ments, founder’s deeds, articles Law particularly comprises the following: of association, statutes and other performance of due diligence focused on corporate documents and by-laws, corporate matters (e.g. good standing of assistance with the shareholders’ the company, availability of licenses, meetings, representation in front protection of minority shareholders), of public bodies in company matters, incorporation, changes in the structure, as assistance on share capital increase and well as winding-up and liquidation of the reduction, spin-offs and other forms of companies and branches, acquisition of corporate restructuring, and structuring existing companies, the preparation of of relationships between members of joint ventures and shareholders agree- a group of companies.
Financial Our practice in this field mainly financial products, preparation of the relevant contractual documentation, Services comprises advisory in the area of banking, capital markets and insuran- preparation of due diligence reports on ce. In all these fields we offer legal advice legislative compliance, and advice in on the design, offer, and conditions of corporate banking, capital markets or insurance areas. Tax and Legal Services | 14
Real Estate and We offer our clients a wide range of financing. We have long-term expertise Construction Law services in the field of real estate, in construction law matters, covering the comprising assistance in the acquisition preparation, implementation and review and sale of real estate, establishment of of project services, engineering and pledges and other encumbrances, lease construction agreements, and related of real estate, legal advice in the develop- documentation. ment of real estate projects and their
Private KPMG practice in the area of Private protect and manage their personal Wealth Wealth Management adopts a multi- wealth. Our services include effective disciplinary approach, where profound management and succession planning, Management legal expertise is supported by extensi- tax planning, corporate finance and ve tax, financial and accounting restructuring, as well as estate planning knowledge. This line of business serves and wealth disposal. Further, we can to provide private investors and their assist clients with compensation and families with legal assistance in order to retirement planning, fiduciary litigation, and other related issues.
Health and We provide legal services in the area of regarding pharmaceuticals, including their health care and health insurance. Our production, distribution, advertising and Pharmaceutical law team renders complex advisory services sale including price regulation.
Other Legal Our legal team has considerable protection of personal data, licensing and Services expertise in IP law (including effective sub-licensing of IP rights, and IP litigation). protection against the infringement of IP Further, our team is highly skilled in tax rights, advice on the preparation of litigation matters, where it closely functioning IP management systems, cooperates with our tax department. 15 | Tax and Legal Services
Our team
Tomáš Ciran Partner, Head of Tax & Legal Services Tomáš joined KPMG in 1995 and is a Certified Tax Advisor. He is also the vice-president of the International Fiscal Association in Slovakia, and has economic as well as legal education. Tomáš has significant experience in tax advisory to many Slovak companies, and also has extensive experience in advising foreign investors on structuring their investments in Slovakia. His experience includes tax advisory for local and foreign investors, including Due Diligence, Transaction Services, Corporate Income Tax (including branch and permanent establishment issues) and Tax Planning. Tomáš lectures on tax-related topics for students, the public as well as clients, and under an EU project led sessions for representatives of tax authorities on transfer pricing and international taxation. Tomáš speaks Slovak and English. [email protected], +421 (0)2 59 98 41 11 Tax and Legal Services | 16
Branislav Ďurajka Partner Branislav joined KPMG in February 2005. He has been a Licensed Tax Advisor since 1999. He has had experience with tax and accounting work with local firms since 1995. From 1999 to 2002 he worked at the Ministry of Economy as the Deputy Director General of the Strategy Section. From 2003 to January 2005 he worked as the Director General of the Tax and Customs Section at the Ministry of Finance, and in 2010-11 he was State Secretary (Deputy Minister) at the Ministry of Finance. He has gained extensive experience in tax and accounting, both in the private and public sector. Branislav specializes in advising clients on various tax issues, as well as providing tax compliance and tax structuring services. He has also assisted foreign investors in structuring their proposed acquisitions, due diligence engagements, analyzing post-acquisition tax scenarios and tax modeling. He also has experience in representing clients before Slovak tax and other authorities. Branislav has worked on the structuring of industrial, real estate and financial sector projects for numerous clients, and on many due diligence and pre-sale advisory projects for numerous significant transactions. He also has extensive experience in transfer pricing matters, and VAT advisory and compliance. Branislav is our lecturer for international tax trainings. Branislav is fluent in Slovak, English and German. [email protected], +421 (0)2 59 98 41 11 17 | Tax and Legal Services
Mergers & Acquisition
Library of services KPMG Tax & Legal
Competition Construction Competition ConStruCtion & reaL eState tax & Legal / KpmG in Slovakia & Real Estate tax & Legal / KpmG in Slovakia Competition We handle the concerns We handle the concerns of our clients to fully comply with the omnipresent competition legal traps by providing tailored counselling aimed at client satisfaction. We provide our clients with Construction & real estate comprehensive, knowledge-based advice in the assessment of their activities to avoid the of our clients to fully comply Construction & Real Estate - because we know the key challenges Construction & Real potential violation of competition regulations and assist in the preparation and implementation in today’s business environment. of rules for compliance with competition law. with the omnipresent Estate - because we competition legal traps know the key challenges by providing tailored in today’s business counselling aimed at environment.
Given the complexity of competition • What is the best way to approach venture is anticipated, from the matters, key challenges for clients competition authorities? viewpoint of competition law? include mainly the following: client satisfaction. • We want to merge with another • What are the risks of network sharing Key challenges for property • Will income tax obligations be real estate in Slovakia? Is there an • Can my business decisions, strong market player, what should we within the EU/ Slovak markets? developers and real estate companies triggered on a construction project efficient route to adapt to new rules activities, agreements or practices do for our transaction to remain in a from a legal and tax perspective, or another activity connected to real for restructuring our real estate • How should we cooperate with other be challenged as capable of harming safe harbour? besides other matters, include estate? business or transactions? market competition, and how to cope firms and not restrict competition searching for the right answers to the • Can the property be depreciated for What could happen in the case of with these risks? • When is it necessary to notify a within the relevant market? following key questions: transaction to the Slovak competition tax purposes and if so, who is entitled non-compliance or omissions? • What could happen if the proper • How should we structure our • Which provisions in our business authority, and when do we have to to make the deductions and when? • Invalid contracts approach is not chosen or structuring operations? contracts should be avoided in approach the EU Commission? of the transaction is underestimated? • What will be the deductible costs • No legal title to real estate order to prevent potential claims • Is registration of a branch or • What will be the anticipated outcome when transferring real estate? from our customers, or penalties by • Deal breaking measures imposed by subsidiary required? And which of • Increased tax burden in Slovakia or of the anti-monopoly authority’s • How to deal with VAT issues arising governmental authorities? state authorities these options is more preferential in other countries assessment of the relevant market the case of property development and on construction projects and real • How should we structure our • Penalties imposed for non- and of the behaviour of our firm? • Penalties imposed by the relevant buying, maintaining, selling or letting estate? Will we have to impose VAT transactions to avoid potential governmental authorities on our transaction? Can we recover compliance with monetary and non- • How should we manage our price out real estate? competition law concerns? VAT suffered on a transaction? monetary obligations setting to be compliant with the • Significant financial and time losses • What are the main contractual terms • What are the penalties for a breach relevant competition requirements? • What should be done to comply with • Unnecessary additional costs • Undesired public exposure and to be included in a contract related to of competition regulations, and what construction projects or real estate? real estate tax obligations? • Reputational risk are the reputational risks arising from • Is our distribution scheme in reputational damages compliance with competition • How are developments in the legal such misconduct? • Business plans limitations and • How can ownership titles to real requirements? estate be acquired, protected or and tax environment changing crashes • What are leniency programs and how transferred? conditions for doing business in • What are the alternatives of should we follow them? • Competition restraints structuring a project where a joint
TAX & LEGAL / KPMG in Slovakia TAX & LEGAL / KPMG in Slovakia
Corporate Employment Corporate matterS empLoyment and immiGration
tax & Legal / KpmG in Slovakia matters tax & Legal / KpmG in Slovakia and Immigration Corporate matters we contribute to the excellent, smooth and proper functioning of clients’ businesses, and protection of their interests at the corporate level. We provide our clients with complex, highly employment and immigration skilled and effective advice on the governance of their corporate issues and the preservation of their We assist our clients in managing their workforce in a legal and tax safe way, and to secure the We contribute to the availability of their top staff on site. We can provide our clients with comprehensive legal and tax We assist our clients shareholder, stakeholder, management and other similar rights and interests. advice in employment and immigration issues. excellent, smooth and in managing their proper functioning of workforce in a legal and clients’ businesses, tax safe way, and to and protection of their secure the availability
Key challenges for clients mainly • What are my rights as a shareholder • Is there a mechanism available under Key challenges for clients include • How should we organise working • What are the health and safety rules include the following: towards other shareholders, Slovak legislation to squeeze out mainly the following: hours and employee shifts to in Slovakia, and how can they affect • What is the proper legal form for us to members of the Board of Directors, minority shareholders? interests at the corporate • What are the types of employment remain compliant with Slovak labour our business activities? What are the of their top staff on site. and Supervisory Board of the legislation? What is the maximum penalties in the case of a breach? conduct our business activities? • How can a company distribute arrangements and how can we company? number of overtime or night work? dividends or other own funds benefit from them? • How should we proceed in the event • Is our company valid, properly How many vacation days are our • How should the company bodies be to shareholders? Are there any of mass redundancies? incorporated and existing? Are the • Which provisions should be included employees entitled to? convened, and what are their powers tax issues connected to such shares of our company valid? in employment or management • Which internal guides and processes and obligations? distribution? • What are the amounts of meal level. agreements, in order to secure the should be implemented in our • Which arrangements in the Articles validity of such contracts on one allowances an employee is entitled of Incorporation and Statutes or • What are the options to secure the • What are the risks involved if a company? Are the existing internal hand, and the protection of the to? Shareholders’ Agreement are crucial funding of a company by way of an company reports negative equity? processes sufficient to protect the increase of its own capital, or by interests of our company on the • What if our company provides extra interests and rights of our company, in order to protect my rights of a • Do thin capitalization, earning external financing? What are the tax other? benefits to employees, whether in and do they fully comply with the shareholder? stripping or transfer pricing rules consequences of doing so? cash or in kind, such as extra days legal requirements? impact the deductibility of interest • How can we protect our company • What are my obligations as a of vacation, healthcare services, or • How can a company issue new costs? against risks arising from employee • What are the legal requirements for statutory representative vis-a-vis the holiday vouchers? Are such benefits shares or bonds, and in which form misconduct, and to which extent can the secondment of our staff from company and its shareholders, and • What are my options if I want to taxable in their hands, and can the and type? What tax issues should be potential damages be claimed against abroad to Slovakia or vice versa? what is my liability? terminate the business activities of a company treat them as tax deductible considered? employees? How are secondments treated from company, and what are the benefits expenses? • Who, and in what position, is entitled the tax, social and health security • What are the steps to carry out an and drawbacks arising from various • How should we approach trade to represent the company towards • What payroll obligations do we have perspective? IPO effectively from the legal and tax methods of its winding-up? unions in our company, and what are third persons, and which actions are and what are the employment taxes perspective? our rights with respect to collective • We want to employ a foreigner from binding on the company? • Are there any exit taxes or other due, including social and health bargaining? an EU/non-EU country. What should tax matters to be considered when security related obligations? we bear in mind to remain compliant terminating a business?
TAX & LEGAL / KPMG in Slovakia TAX & LEGAL / KPMG in Slovakia Tax and Legal Services | 18
Mergers & Acquisition
Intellectual Litigation inteLLeCtuaL property LitiGation
tax & Legal / KpmG in Slovakia property tax & Legal / KpmG in Slovakia intellectual property Litigation – because we We help our clients safeguard that which is important and highly-valued for their business. We are Litigation pleased to provide our clients with the comprehensive, efficient and effective protection of their Litigation – because we measure success by achieving just, timely and enduring results for the intellectual property values, always following the latest trends and improvements in their field of We help our clients clients who come to us with challenging matters. We provide our clients (both legal entities and measure success by interest individuals) with highly qualified, efficient, cost-effective representation in complex commercial, safeguard what is civil, tax and criminal matters. achieving just, timely and important and highly enduring results for the valued for their business. clients who come to us with challenging matters.
Key challenges for clients include or infringement of our IP rights • Which requirements should be met if mainly the following: from the side of our employees, we plan to set up a franchise network • How can we protect ourselves subcontractors, management and within your jurisdiction? others? against the infringement of our What could happen if a proper although individual cases differ, key • What are my rights in the proceedings What could happen if good and IP rights, what are the available • Which provisions should be included approach is not chosen or challenges for clients include mainly and how can we seek their protection effective defense is underestimated? remedies, and which steps should we in a non-disclosure agreement, in structuring of ip rights protection is the following: in the most effective and efficient • Imprisonment and other penalties take in this regard? order to sufficiently protect our underestimated? • What are the anticipated results of way? imposed for criminal offences sensitive data? • Should we apply for a patent, or are • Lack or loss of patent/ trademark or the case, from both the personal • How can on-going proceedings • Penalties imposed by the relevant there any alternatives to protect our • How can we safely and effectively other statutory protection freedom and property viewpoint? damage our reputation, and how can governmental authorities for IP rights? license/sublicense IP rights? • Significant financial claims brought • Which arguments should we use, and we communicate the case to the non-compliance with regulatory • We have invented something new - • Can we depreciate IP rights for tax by competitors and/or customers, which procedural steps should we public in the most harmless way? obligations do we qualify for patent protection? purposes? or speculative claims by patent/ take, in order to achieve our ultimate • How long could proceedings take, • Significant financial claim exposure trademark trolls goals? • Within which geographical areas • Can we buy IP rights from, or sell and what are the routes to obtain • Reputational risk should we seek patent protection? them to, a third party? What are the • Loss of technological lead on the • How should we manage our pre-trial a final ruling in a timely and cost- market effective way? • How can we protect ourselves legal requirements? and trial strategies in order to litigate against powerful adversaries that against patent or trademark trolls and • What are the tax issues connected • Unnecessary litigation • What are alternatives to court often have much greater resources their practices? with royalty income and royalty proceedings, and how can these be • Reputational damage than ours, such as public authorities? used to maximize the likelihood of a • How should we deal with employees’ payments? • Increased costs and penalties favourable resolution of the case? IP rights? • Is royalty income taxable and in which imposed by the tax authorities • How can we carry out sensitive • Have we implemented sufficient country? Does withholding tax apply? • Civil and criminal liability of company internal investigations, and how can internal processes to prevent, Is a royalty payment tax deductible? Is VAT or any other tax applicable? management these help us as a defense in the identify and remedy the misuse court or administrative proceedings?
TAX & LEGAL / KPMG in Slovakia TAX & LEGAL / KPMG in Slovakia
Mergers Private Wealth merGerS & aCquiSition private WeaLtH tax & Legal / KpmG in Slovakia & Acquisition tax & Legal / KpmG in Slovakia Because clients want their mergers & acquisition private Wealth M&A – because all projects can be exceptional. We provide our clients with highly professional Because clients want their private wealth to be secure and to decide on its distribution. private wealth to be secure legal and tax advice for every kind of merger and acquisition, with deep sector knowledge for client M&A – because all We provide our clients with complex, effective and efficient assistance in safeguarding their estates satisfaction. and being free to decide on the disposal of private wealth at the national and multinational level. projects can be and they want to have exceptional. We provide control over its distribution. our clients with highly We provide our clients with professional legal and tax complex, effective and
although the matters differ, key • How can we take over the relevant • Are debt-push-down structures challenges for clients include mainly licenses, permits, material contracts, possible in Slovakia? Under what the following: significant assets, grants and the like, conditions? efficient assistance in advice with deep sectoral although matters differ, key • What are the risks of estate taxation What could happen if good and in order to smoothly continue the • How should we structure our • What are the most efficient exit challenges for clients include in various jurisdictions after my effective defense is underestimated? transaction in order to maximize our operation of the acquired business? strategies? mainly the following: death? How can I manage such risks • Invalidity of the last will, or profits and mitigate the risks involved • How can we take over the in advance? What could happen if a project is • Am I free to decide how my personal arrangements concerning the marital effectively? management of the acquired improperly structured or corporate property will be distributed to my • Can shares in a company be property safeguarding their estate business? • What is the proper form of a legal issues are not sufficiently managed? knowledge for every kind heirs? subject to inheritance, and what are • Invalidity of legal acts in breach of entity to be established, taking into • Which arguments and clauses should • Significant financial claims and • What are the effective and efficient alternative ways to safeguard the regulations in the field of succession, account the activities we want to be used in the process of contract possible tax exposure legal options that enable me to decide continuity of a family business? or marital property carry out in the market after the drafting and negotiations? on the disposition of my personal transaction? • Failure to acquire the most important • Is there any legal option to exclude • Successful challenges of dispositions • What are the pre-closing, closing and property after I pass away? marital property (e.g. contractually)? and their freedom to decide parts of the business or assets with personal property • How can we use the outcome of of merger and acquisition. post-closing obligations of the parties • Is forced heirship applicable in the process of due diligence to our • Reputational risk • What are the rights of my spouse, if I • Unexpected taxation in particular involved? Slovakia, and how should this advantage, and how should the due secure all our income? jurisdictions (e.g. inheritance tax) • When is the suitable time for a public • Shareholders’ actions statutory requirement be adhered to? diligence results be interpreted? • What if I sell my property to a third offering, and what are the advantages • Reputational risks • Failure of investments • To what extent am I free to dispose person during the marriage? • How to manage our liability and risks and drawbacks of entering the stock on the disposal of private of my property in a will? Can I decide • Sensitive family and interpersonal related to acquired assets or shares in • Commercial and contract disputes market? that all my assets will only belong • What if my separate property issues the acquisition process? increases in value substantially in the • What are the most efficient takeover • Penalties to some of my statutory heirs, or to course of marriage? strategies, and how to use them? other persons? • Can I decide that all my separate wealth at the national and property will belong to my children?
TAX & LEGAL / KPMG in Slovakia TAX & LEGAL / KPMG in Slovakia multinational level. 19 | Tax and Legal Services
Financial Services Leasing FinanCiaL ServiCeS LeaSinG tax & Legal / KpmG in Slovakia Financial Services – tax & Legal / KpmG in Slovakia Leasing is a specific area
Financial Services Financial Services – banking and insurance in a regulated market. Banking and insurance banking and insurance in Leasing subject to special legal are regulated businesses with certain specifics arising in the legal and tax area. Leasing is a specific area subject to special legal and tax treatment.
• How to structure relationships with intermediaries? a regulated market. Banking and tax treatment. • When will income from financial services be subject to taxation, based on an accrual or actual payment basis? and insurance are regulated • What costs will be deductible when providing financial services? • Which financial services are exempt from VAT? businesses with certain • How to deal with VAT issues arising on financial services? Can we recover the input VAT suffered? If not, can we treat it as a tax deductible expense for income tax purposes? specifics arising in the legal • How can we manage our operations efficiently from the tax cash flow perspective? the key issues to be considered in • What are the main contractual terms the main questions to be raised by • Can the costs of maintenance of • What are the obligations of the these businesses include: not to be omitted in a contract related • Can an enterprise in financial services benefit from a VAT grouping scheme? lessors and lessees when entering leased assets be deducted by the parties to a lease agreement, and • How should we structure our to financial services? and tax area. into a leasing arrangement include: lessor or the lessee? How to treat how to protect our rights from such operations to comply with the • Are there any stamp duties on • What are the tax impacts of financial • How should we structure the lease the technical improvement of leased an arrangement? regulatory framework in Slovakia? services products for clients? financial services? assets from the tax deductibility arrangement? Is operational or • What are the possible ways to viewpoint? • Is the registration of a branch or • Is it necessary to withhold tax when • How are developments in the legal financial leasing the more beneficial exit from an inconvenient lease subsidiary required? And which of making payments to clients? and tax environment changing the option for the lessor/lessee, taking • Who can depreciate leased assets arrangement? these options is more preferential conditions for doing business in into account the asset to be leased? for tax purposes and under what • How can loans be granted, secured, • How are developments in the legal from the legal and tax perspective in the financial services segment in conditions? the case of financial services? and refinanced, and what are the Slovakia? Is there an efficient route • Is the registration of a branch or and tax environment changing the legal and tax issues related to these for restructuring the financial services subsidiary required if assets are • Will income tax obligations be conditions for leasing arrangements • Do we comply with all the transactions? business or transactions to adapt to leased to/from Slovakia? What are the triggered by leasing transactions in in Slovakia? Is there an efficient regulatory requirements specific cross-border legal and tax issues to • Will income tax or other duties be the new rules? Slovakia? How and when will the route for restructuring a business for our business sector, including be considered in the case of a cross- triggered by the provision of loans, underlying income be taxed? or transactions to adapt to the new corporate governance and consumer What can happen in the case of non- border leasing? rules? protection? guarantees or insurance, or other compliance and omissions? • Can real estate be subject to financial/ activities related to financial services? • What are the main contractual terms operational leasing? • What are the consequences of a • Is our compensation plan structured • Penalties and sanctions imposed not to be omitted in a contract related premature termination of a leasing in compliance with regulatory • Is the implementation of hybrid for non-compliance with regulatory • What will be the deductible costs to leasing assets? agreement? How to treat it from the requirements and tax-wise? financing possible in Slovakia? What requirements when transferring real estate? are the legal and tax requirements • Is a tenant liable for damage caused in tax and legal perspective? • How to implement new regulations in • Non-compliance with regulations in • How to deal with VAT issues arising and consequences? connection with the use or operation • What will be the tax and legal the area of financial services properly Slovakia leading to the invalidity of on lease arrangements? Will VAT have of rented assets? implications if the leased item is in our company processes? • Can part of regulated activities certain contracts and transactions to be imposed on the transaction? damaged, destroyed or stolen? be outsourced? What are the tax • How can we benefit from a sale-and- Can the VAT suffered on a transaction consequences of outsourcing? lease back arrangement? be recovered?
TAX & LEGAL / KPMG in Slovakia TAX & LEGAL / KPMG in Slovakia
Tax Audit Compliance tax audit LeGaL & tax CompLianCe tax & Legal / KpmG in Slovakia Tax audits are complex tax & Legal / KpmG in Slovakia Legal & Tax Compliance tax audit Legal & tax Compliance Tax audits are complex procedures that may end in an obligation to pay additional tax and penalties. procedures that may end It has never been easier to comply with rules when legal and tax specialists work closely together. – it was never easier to in an obligation to pay comply with rules than additional tax and penalties. now when legal and tax specialists work closely
We outline some key steps to follow • Appoint a person responsible for the statutory period and start the tax in the case of an announced tax audit communication with tax auditors, litigation procedure, if applicable. in order to mitigate potential risks: consider involving a tax advisor, together. What will happen in the case our legal and tax specialists work • What are the main terms to be • What tax consequences (including • Collect and prepare all supporting • Provide all necessary explanations of non-compliance? in teams to address the compliance included in corporate documents and VAT, customs and excise duties and documentation prior to the to the issues raised by the tax • Process of tax audit out of your issues of clients. the main areas to contracts related to transactions? other taxes) and thus tax compliance commencement of the tax audit, inspectors, consider include: issues are connected our company control • Do we have any statutory obligations • Prepare a separate room in which the • What legal and tax compliance issues operations in Slovakia? • Carefully read the tax inspection • Lost opportunity to appeal against arising from data protection, anti- tax inspectors can perform their work, should be adhered to? Is the business protocol and insist on the inclusion of the decision on additional tax and/or money laundering or anti-fraud • How are developments in the legal if the tax audit includes an on-site tax regulated or subject to some other your explanations, provided facts and penalties issued by the tax authorities legislation? Do our internal processes and tax environment changing inspection, proofs in the document drafted by the restrictions or limitations? If so, what and guidelines deal sufficiently with conditions for doing business • Increased tax burden including are the licensing requirements and • Ensure access rights to the software tax inspectors, liability issues that may arise from a in Slovakia? Is there an efficient penalties in Slovakia or other how can we meet them? breach of these obligations? route for restructuring business or used for conducting business, if • If you do not agree with the result countries transactions to adapt to the new required, of the tax audit, appeal the decision • Which legal form would bring the • Are we obliged to initiate an internal rules? of the tax authorities regarding • Reputational risk best legal and tax benefits to your investigation in the event of fraud business and shareholders? additional tax and/or penalties within • Potential criminal proceedings detection, and which steps must be What will happen in the case of non- • What are the main considerations in taken? compliance and omissions? terms of the rights and obligations • Do we review the background of our • Invalid or insufficient corporate How can we help? of statutory bodies and supervisory clients, and do we provide them with documentation and contracts boards? How should our company • Tax & legal teams work together. With significant. We have specialists who remedies, court actions and other sufficient care from the viewpoint • Potential prosecution by statutory set up its processes to identify an in-house legal and tax department can help you in tax audits, litigations documents, and support you in of special legislation (e.g. anti- bodies we are in an excellent position to and court proceedings. discussions with the tax inspectors. or evidence a breach of statutory money laundering, fraud prevention, combine our legal and tax knowledge With our help, the tax audit process obligations? data protection, reporting under • Increased tax burden in Slovakia or • We can assist you throughout the to assist our clients. should run smoothly and be a less specialized financial legislation)? other countries tax audit process, from its beginning • Do our corporate internal guidelines stressful experience for you and your • Tax audits happen. Support during tax to the end of the litigation and court and processes fully comply with legal • How can we mitigate our product • Significant penalties imposed for team. audits or legal proceedings may help proceedings. We can help draft requirements? What are the reporting liability? non-compliance with monetary and you avoid additional costs that may be the relevant appeals, extraordinary obligations of our company vis-à-vis non-monetary obligations governmental bodies? • What is the tax treatment of stewardship fees? • Reputational risk
TAX & LEGAL / KPMG in Slovakia TAX & LEGAL / KPMG in Slovakia
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