Global minimum tax

What it means

The global minimum tax is the Pillar 2 rule requiring a large multinational group to be taxed at least 15 % in every jurisdiction. Where the effective rate is lower, the difference is topped up.

It applies to groups with consolidated revenue above EUR 750 million in at least two of four years. The size of the whole group decides, not the size of the Slovak subsidiary.

It should not be confused with the Slovak minimum tax, a fixed amount every Slovak legal entity pays according to its revenue. The global minimum tax is not computed per company but from the effective rate of all group members in one country taken together, so a loss in one sister company affects the result of the others.

How it works in practice

For a Slovak company inside such a group it means extra reporting: effective tax rate data, base adjustments and headcount in a prescribed structure, usually following the group’s IFRS logic.

The data comes from the consolidation pack, not from the Slovak statements. The accounting team therefore maintains two views of the same figures and must be able to reconcile them.

Slovakia has introduced its own domestic top-up tax, so any shortfall for the group’s Slovak companies is paid here, alongside the ordinary corporate income tax, rather than through the parent abroad. Where a group has several companies in Slovakia, it has to agree which of them files for the Slovak part and who supplies it with the data.

What to watch out for

Deadlines get underestimated: the top-up tax and its notifications have their own dates, separate from the ordinary tax return, while the parent expects the data months in advance.

Tax incentives such as investment aid or the super-deduction for research and development lower the effective rate, and in a group above the threshold the top-up tax can partly claw them back. A company that counts on an incentive in its business plan or in the payback of an investment should have it recalculated to see how much survives the top-up.