Certificate of tax residence

What it means

A certificate of tax residence is a document issued by a tax authority confirming that a person is a tax resident of that country and is taxed there on worldwide income. In Slovakia, the competent local tax office issues it on request to both companies and individuals.

Its main purpose is claiming benefits under a double tax treaty. If a Slovak company receives interest, royalties or dividends from abroad, the foreign payer can use the certificate to apply a lower withholding tax or none at all.

The same applies in reverse. When a Slovak company pays such income to a non-resident, it should obtain a certificate of residence in the recipient’s country before applying the treaty rate. Without it, it has no evidence that the lower rate was applied legitimately.

How it works in practice

For clients invoicing abroad for licences, software or consulting, we recommend requesting the certificate at the start of the year and sending it to customers in advance. Foreign companies often have their own forms that the Slovak tax office must stamp, so allow time.

For payments to non-residents, we check that the certificate covers the period of payment and is issued to the right entity. If the recipient changes its seat or ownership, the certificate should be renewed even if the old one has not formally expired.

For individuals working abroad, the certificate helps prove where they are tax resident. This matters, for example, when assessing the 183-day rule or applying the method for eliminating double taxation in the tax return.

What to watch out for

A residence certificate alone is not enough if the recipient is not the beneficial owner of the income. Tax authorities across Europe increasingly check whether there is real activity behind a company and deny treaty benefits to shell companies.

If a Slovak company applies a lower rate to a payment to a non-resident without a valid certificate, the tax authority can assess the difference against it as the withholding agent in an audit. The company then bears the withholding tax itself if it cannot recover it from the recipient.