Tax – a compulsory payment backed by law

-paid regularly by natural/legal persons in fixed amount at fixed time

-direct or indirect
Tax System = all taxes in a country
-can be:
• progressive – proportion of income taken in tax rises as income rises
• regressive – takes a smaller proportion of income in tax as income rises
• proportional – proportion of income taken in tax-the same for everyone
UK
Direct Taxes
Income Tax – a tax on income
-people are taxed on taxable income above a certain level
-non-taxable income – sorts of income you never pay tax on
Inheritance Tax - paid on an estate when somebody dies
-valuation of the estate – adding up the value of all assets in the estate and deducting any
debts of the deceased to determine if tax is due
Corporations Tax - tax on the taxable profits from doing business
Petroleum Revenue Tax – tax on the profits from oil and gas production
Capital Gains Tax – tax on the profit made when somebody sells/disposes of an asset
Indirect Taxes
VAT
-can be:
• standard (20%) – charged on most G&S
• reduced (5%) – domestic fuel, hygiene products
• zero (0%) – motorcycle helmets, children´s clothes
Customs duties - tax paid to customs when importing and exporting goods
-anti-dumping duty, countervailing duty, agricultural duties
Excise duties – taxes charged on alcohol, gambling, fuels, tobacco, APD, landfill tax,
insurance premium tax, vehicle excise duty, council tax
Slovakia
Direct Taxes
Income Tax
1. of natural persons - an individual in SK is liable for tax on his income as an employee or
self-employed person
• residents – taxed on their worldwide income
• non – residents – taxed on income received from Slovak sources
2. of legal entities
• resident companies - subject to corporate income tax on worldwide income
• non-residents - subject to corporate income tax on income sourced in Slovakia
Motor vehicle tax – levied on motor vehicles registered in SK, used for business purposes or
activities generating income subject to the income tax
Local taxes – differ in towns/villages
-include:
• real estate tax (tax based on the value of buildings/land)
• dog tax (applied to each dog over the age of 6 months that is kept by person)
• other
Indirect taxes
VAT - charged on supply of G&S and on imports of SK, standard 20%, reduced 10%
Excise duties - tax is due for producers and importers of certain goods (alcoholic beverages,
tobacco products, mineral oils, electricity, coal, natural gas)