Slovakia: Selected legislative measures II

Governments across CEE, including Slovakia, have introduced or are discussing various measures to mitigate potential adverse consequences of the coronavirus situation. This short overview summarises selected legislative measures adopted in Slovakia. Due to the dynamic developments, we will update this overview regularly and as required.

It has been proposed for the respective emergency measures to become effective on the date of their publication in the Collection of Laws of the Slovak Republic. It is expected that these measures will be adopted by the Parliament through accelerated legislative procedures.

• The state will pay 80 per cent of the employee’s salary in the companies that are mandatorily closed.
• Contributions for the self-employed and employees in companies that have recorded decline in revenues will depend on the extent of their shortfalls.
• Provision of monthly bank guarantees of 500 million euro; these shall be subsequently provided by the commercial banks to businesses under favourable conditions.
• Employees in quarantine and those who are at home with their children will be paid 55 per cent of their gross salary.
• Postponement of health and social insurance contributions paid by the employer for those whose revenues drop by more than 40 per cent.
• Postponement of income tax advance payments for those whose revenues drop by more than 40 per cent. The advance payments will therefore be paid by the companies from October 2020.
• Companies will be able to include loss carryforward since 2014 (including). This applies to companies which have not included the loss carryforward yet.

The proposed measures are – as to their extent – the largest economy aid plan ever adopted in Slovakia. The aid will amount to approximately one billion euro in direct payments and half a billion euro in bank guarantees.

Contribution of 80 per cent of employee’s salary
Employers that have had to close their premises under the decision of the central crisis staff (since 16 March 2020, these are mandatorily closed under a measure of the Chief Health Officer of the Slovak Republic) will be obliged to pay their employees wage compensation of only 80 per cent of their average earnings. In order to mitigate the economic impact, the state will now reimburse the employers for the above wage compensation, and the employers will be obliged to pay the respective social and health insurance contributions only. The employers are in such case, however, obliged to employ the respective employees during at least six months after the payment of contribution above has been ceased. The maximum amount of the contribution per one employer is 200.000 euro per month. The highest possible contribution per one employee amounts to 1100 euro per month. The payment will also include tax and social and health insurance contributions for the employee.

Contributions for companies with revenue shortfall
Employers whose premises have not had to be closed but that have recorded a drop in revenues of at least 20 per cent will be compensated by the state depending on the shortfall:

• drop in revenues by at least 20 per cent and less than 40 per cent: contribution of 180 euro per employee or self-employed,
• drop in revenues by at least 40 per cent and less than 60 per cent: contribution of 300 euro per employee or self-employed,
• drop in revenues by at least 60 per cent and less than 80 per cent: contribution of 420 euro per employee or self-employed,
• drop in revenues by at least 80 per cent: contribution of 540 euro per employee or self-employed.

The calculations for March will be proportionate as to the date of validity of the respective measure of the Chief Health Officer of the Slovak Republic, i.e. 16 March 2020. The revenues will be compared to the same period the previous year.

Introduction of contributions
Further details as to the proposed measured described above will be published later this week. The Parliament will adopt the measures through accelerated legislative procedures. The payment of contributions will be managed by the Central Office of Labour, Social Affairs and Family (Ústredie práce, sociálnych vecí a rodiny). Applications for payment of the contributions can be submitted from 6 April, and contributions will be paid from 15 April.