Changes in percentage designation in Slovakia Past, present and future Milan Andrejkovič

Changes in percentage designation in Slovakia Percentage designation is in Income tax law No special law Pros and cons of insertion into Income tax law Income tax law is „open“ each year – possible frequent changes

Changes in percentage designation in Slovakia Eligible „donors“ – individuals and corporates Changes in % value – 1%, 1,5%; 2%, 3% Minimum and maximum designated amount Eligible purposes Eligible beneficiaries Way of designation Sanctions Anonymity Transfering of amounts Duties – special bank account, audit, Commercial bulletin...

1. Eligible „donors“ – individuals and corporates At the beginning in 2002-2003 – only INDIVIDUALS could designate Starting 2004 - COMPANIES are allowed to designate as well

2. Changes in % value – 1%, 1,5%; 2%, 3% Started with 1% from individuals Increase from 1% to 2% Possible 3% from individuals (2011- Law on volunterism) In case of at least 40 hours of voluntary work per year Matching principle from companies In order to designate more, companies are required to give a gift

3. Minimum and maximum designated amount Started with minimum: 20 SKK (0,66€) from individuals 250 SKK (8,3€) from companies No maximum limit

Minimum and maximum designated amount Increased the minimum: 3€ from individuals 8€ from companies No maximum limit

Minimum and maximum designated amount Government´s efforts to limit the maximum: from companies – different proposals 500.000 Skk – 5.000.000 Skk max from company (16.666€ - 166.000€) for 1 beneficiary Maximum cap

4. Eligible purposes There is no single, legislative definition of Public benefit purposes in Slovakia. Changes, extensions, specifications: Started with 6 purposes Now 9 purposes Specifications: f.e. – support of sport – support of psychical activities

5. Eligible beneficiaries Legal forms: NGOs Slovak Red Cross Organizations of churches - 4. Research and development organizations 5. Special funds (Anti-drug fund, ...)

Way of designation Started with special document called „Vyhlasenie – Declaration“ Part of Tax declaration

Sanctions Beneficiaries getting more than specific amount are obliged to publish in Commercial Bulletin how they spent the money from designation. If they failed to report, the sanction was exclusion from the eligibility of getting designation for 3 years Change: only for 1 year

Anonymity Beneficiaries had no information about the supporters Starting 2016, supporters can agree to send informations about themselves to beneficiaries: Individuals: Name, address Companies: Name, address, legal form But NO FINANCIAL INFO

Transfering of amounts Tax offices used to transfer individual amounts. expensive for both tax offices and beneficiaries Tax offices send the money in bulk

Duties – special bank account, audit,... Beneficiaries getting more than specific amount are obliged to open new bank account and to transfer the money from designation there. Interest gained has to be spent for the same purposes as the origin amount. Beneficiaries getting more than specific amount are obliged to have a financial audit Beneficiaries getting more than specific amount are obliged to publish the spending in Commercial Bulletin

Future changes New information system called: „Open information system of NGOs“ Registration process Anonymity Sanctions