ITS - International Tax Structures

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• Transfers of real estate located in Slovakia from 1 January 2011 - proposed amendment

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  Zuzana Blazejova

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  Transfers of real estate located in Slovakia from 1 January 2011 - proposed amendment

  Under the current tax legislation applicable in Slovakia if (in general) a foreing tax resident sold real estate situated in Slovakia to a different foreign tax resident (not having a permanent establishment in Slovakia) any capital gain arising on such transaction was under the currently applicable local law not subject to income tax in Slovakia. The local legislation currently does not define such income as Slovak source income.
  
  It is however proposed that with effect from 1 January 2011 transfers of real estate located in Slovakia will be subject to taxation in Slovakia under the local tax law irrespective of the tax residence of the seller and the buyer, i.e. it is proposed that under the local tax law also a real estate transaction between two non-residents will be taxable in Slovakia.
  
  It should be noted that international treaties in general prevail the local law, but under the double taxation avoidance treaties normally the country where the real estate is situated has the right to tax a capital gain on the disposal of such real estate.
  
  • 05 Oct 2010, 3:31 pm
  Zuzana Blazejova wrote: > Under the current tax legislation applicable in Slovakia if (in > general) a foreing tax resident sold real estate situated in Slovakia > to a different foreign tax resident (not having a permanent > establishment in Slovakia) any capital gain arising on such > transaction was under the currently applicable local law not subject > to income tax in Slovakia. The local legislation currently does not > define such income as Slovak source income. > > It is however proposed that with effect from 1 January 2011 transfers > of real estate located in Slovakia will be subject to taxation in > Slovakia under the local tax law irrespective of the tax residence of > the seller and the buyer, i.e. it is proposed that under the local > tax law also a real estate transaction between two non-residents will > be taxable in Slovakia. > > It should be noted that international treaties in general prevail the > local law, but under the double taxation avoidance treaties normally > the country where the real estate is situated has the right to tax a > capital gain on the disposal of such real estate.