Motor vehicle tax: who pays and how much

Motor vehicle tax concerns entrepreneurs and companies that use vehicles for their business. In this article we explain who the taxpayer is, how motor vehicle tax is calculated and when the obligation to pay it arises and ends. It is a tax that is easily overlooked in business, but neglecting it can mean needless penalties. That is why it pays to know at least its basic principles, even if you have an accountant.

What the tax covers

The tax applies to a vehicle registered in the Slovak Republic that is used during the period for business or for another activity generating taxable income. Vehicles used exclusively for private purposes are not subject to this tax, not even if they are owned by an entrepreneur. What matters, therefore, is the actual use of the vehicle, not ownership as such. If you use a car for your business even partly, you need to take the tax into account.

Who the taxpayer is

The taxpayer is generally whoever actually uses the vehicle for business, most often the keeper entered in the vehicle’s registration documents. In practice, however, various situations can arise that need to be assessed correctly.

• An entrepreneur using their own vehicle for business
• A company with vehicles registered in the company’s name
• An employer where an employee’s vehicle is used for business

How the tax is calculated

The amount of tax is based on an annual rate set according to the vehicle’s parameters, for example the engine capacity for passenger cars, or the maximum permissible weight and number of axles for light commercial vehicles and lorries. The rate is also adjusted according to the age of the vehicle, with newer vehicles usually treated more favourably and older ones, conversely, bearing a higher rate. Special rules may also apply to more environmentally friendly vehicles, such as electric cars. Check the specific rates and any reliefs for the tax period in question, as they may change from year to year.

When the tax liability arises and ends

The tax liability generally arises when the vehicle starts being used for business and ends when that use ceases. These facts have a direct effect on calculating the proportionate part of the tax for the period if you use the vehicle for only part of the year.

Tax return and payment

Motor vehicle tax is declared and paid only after the end of the tax period, within the deadline set by law. You file a tax return listing all the vehicles concerned, together with the period during which they were used for business.

• Record when you start and stop using a vehicle for business
• List all the vehicles concerned in the tax return
• Keep an eye on the deadline for filing and payment

What not to forget

Pay particular attention to vehicles used for only part of the year and to those added to or, conversely, removed from your fleet during the period. Determining the proportionate parts of the tax precisely is a frequent source of mistakes, and an accountant can reliably help you with it. Also bear in mind that the tax is declared for each vehicle separately, so with a larger fleet the paperwork can pile up. Keeping records on an ongoing basis during the year will therefore make filing the tax return much easier.

Related articles: Tax optimisation: legal tools for companies, Taxation of dividends: rates, procedure and common misconceptions, Deducting tax losses from previous years.

Frequently asked questions

Do I pay tax on a car that I use both privately and for business?

If you use a vehicle even partly for business or to earn taxable income, it generally becomes subject to the tax. Vehicles used purely for private purposes are not subject to the tax.

How is the amount of motor vehicle tax determined?

It is based on an annual rate according to the vehicle’s parameters and is adjusted according to its age. If the vehicle is used for only part of the year, a proportionate part is calculated. Check the rates for the period in question.