How Your Investments Through Crowdberry Are Taxed

Tax Residency

A Slovak tax resident is an individual who has permanent residence or domicile in Slovakia, or who is physically present in Slovakia for at least 183 days during a calendar year. In the case of legal entities, tax residency is determined by the registered office or the place of effective management.

A Czech tax resident is an individual with domicile in the Czech Republic or a person who spends at least 183 days per year in the country. For legal entities, residency is determined by the registered office or place of management.

If you qualify as a tax resident in both jurisdictions, the applicable double taxation treaty determines your residency status. The decisive criteria include permanent home, centre of vital interests, habitual abode, and citizenship.

EQUITY INVESTMENTS: Shares in a Simple Joint-Stock Company (JSA)

Income derived from shares may take two forms: dividends or capital gains from the sale of shares.

Slovak Tax Resident – Individual

Dividends are currently subject to a 7% withholding tax. Once withheld, no additional health insurance or social security contributions apply.

Capital gains from the sale of shares are exempt from taxation up to EUR 500 per year. This threshold applies collectively to all comparable income. Income exceeding this limit is taxed at a progressive rate of 19% or 25%, depending on the investor’s total taxable income.

Such income must be reported in the tax return for the year in which it was actually received. Capital gains are also subject to health insurance contributions of 15% (7.5% for persons with disabilities). These contributions may subsequently be deducted as a tax expense.

The above exemptions apply only if the shares were not included in the investor’s business assets.

Slovak Tax Resident – Legal Entity

Dividends are not subject to corporate income tax.

Capital gains from the sale of shares are taxed at rates of 10%, 21%, or 24%, depending on the company’s total taxable income.

The gain may be exempt if the investor held at least a 10% equity interest in the JSA and a minimum of 24 months elapsed between acquisition and disposal.

Slovak Non-Resident – Individual

Dividends are subject to a 7% withholding tax.

Capital gains from the sale of shares are taxable in Slovakia if paid by a Slovak tax resident or a Slovak permanent establishment. No withholding tax applies; the investor is required to declare the income through a tax return.

If the investor is not resident in an EU or EEA member state, the payer must withhold a 19% tax security advance from the payment.

The applicable double taxation treaty may reduce or eliminate taxation in Slovakia. Under the Slovak–Czech tax treaty, dividends may also be taxed in Slovakia, capped at a maximum withholding rate of 15%. Capital gains from the sale of shares are taxable only in the investor’s state of residence.

Slovak Non-Resident – Legal Entity

Dividends are not subject to tax in Slovakia.

Capital gains from the sale of shares are taxed under the same rules applicable to non-resident individuals. Under the Slovak–Czech tax treaty, such gains are taxable exclusively in the investor’s country of residence.

Czech Tax Resident – Individual

Dividends constitute investment income and are taxed at rates of 15% or 23%, depending on the taxpayer’s tax base. No related expenses may be deducted.

Withholding tax paid in Slovakia may generally be credited against Czech tax liability up to 15% under the applicable double taxation treaty (ordinary credit method).

Dividends are not subject to health insurance or social security contributions.

Capital gains from the sale of shares are treated as other income and taxed at 15% or 23%. Demonstrable acquisition and transaction costs may be deducted.

Two exemptions may apply:

1. Annual capital gains up to CZK 100,000 are exempt regardless of the holding period.
2. Gains are exempt if the shares were held for more than three years.

Application of these exemptions should be reviewed with a tax advisor.

If total exempt income exceeds CZK 5,000,000 in a calendar year, the investor may have a reporting obligation toward the tax authorities.

Czech Tax Resident – Legal Entity

Dividends may be fully exempt if the conditions of the EU Parent-Subsidiary Directive are satisfied. Otherwise, dividends are included in a separate tax base and taxed at 15%.

Capital gains from the sale of shares may also qualify for exemption under the same directive. If the exemption does not apply, gains are taxed at 21%.

BONDS

Income from bonds may arise either from coupon payments made by the issuer or from gains realized upon the transfer or sale of bonds.

Slovak Tax Resident – Individual

Coupon income paid by the issuer is subject to a 19% withholding tax. No additional levies apply once the tax has been withheld.

Capital gains from the transfer of bonds are exempt up to EUR 500 annually (aggregated with comparable income). Above this threshold, gains are taxed at 19% or 25%.

Such gains are also subject to health insurance contributions of 15% (7.5% for persons with disabilities).

The exemptions apply only if the bonds were not included in business assets.

Slovak Tax Resident – Legal Entity

Coupon income received by business entities forms part of the corporate tax base and is taxed at rates of 10%, 21%, or 24%.

Coupon income received by non-business entities is subject to a 19% withholding tax.

Capital gains from bond transfers are taxed under the same principles: business entities include the gains in their tax base, while non-business entities are subject to 19% withholding tax.

Slovak Non-Resident (Individuals and Legal Entities)

Coupon income paid by the issuer is not taxable in Slovakia, as it is not considered Slovak-source income.

Capital gains from bond transfers are taxable if paid by a Slovak resident. Investors must declare the income themselves through a tax return and may apply the same exemptions available to Slovak residents.

If the investor is not resident in an EU or EEA member state, the payer must withhold a 19% tax security advance.

Under the Slovak–Czech double taxation treaty, gains from bond transfers are taxable exclusively in the investor’s state of residence.

Czech Tax Resident – Individual

Coupon income is taxed at rates of 15% or 23% as investment income. No expenses may be deducted. Such income is not subject to health insurance or social security contributions.

Capital gains from bond transfers are taxed at 15% or 23% as other income. Demonstrable expenses may be deducted.

The same exemptions as for shares apply:

• annual gains up to CZK 100,000, or
• a holding period exceeding three years (subject to an annual threshold of CZK 40 million).

Exempt income exceeding CZK 5 million annually may trigger a reporting obligation.

Czech Tax Resident – Legal Entity

Both coupon income and capital gains from bond transfers are taxed at 21%.

LENDING INVESTMENTS: Loans

Income derived from loans consists of interest payments.

Slovak Tax Resident – Individual

Loan interest forms part of a separate tax base for investment income and is taxed at 19%.

The taxable base and corresponding tax liability must be reported in the tax return for the year in which the interest income was actually received.

If the investor is insured within the Slovak healthcare system, interest income is also subject to health insurance contributions of 15% (7.5% for persons with disabilities). These contributions may subsequently be deducted as a tax expense.

Slovak Tax Resident – Legal Entity

Interest income forms part of the corporate income tax base and is taxed at 10%, 21%, or 24%, depending on total taxable income.

Slovak Non-Resident (Individuals and Legal Entities)

Interest income is subject to a 19% withholding tax.

The applicable double taxation treaty may reduce or eliminate such taxation. Under the Slovak–Czech tax treaty, interest income is taxable only in the investor’s state of residence.

Special case: if an investor resident in another EU member state directly holds at least 25% of the borrower’s registered capital for a minimum of 24 months, the interest income may be exempt from Slovak taxation.

Czech Tax Resident – Individual

Interest income is taxed at rates of 15% or 23%, depending on the tax base, and is included in investment income.

As a deductible expense, the investor may only claim interest actually paid on funds used to provide the loan, up to the amount of the related income.

Interest income is not subject to health insurance or social security contributions.

Czech Tax Resident – Legal Entity

Interest income is taxed at 21%.