Self-employed farmer

What it means

A self-employed farmer, abbreviated SHR in Slovak, is an individual engaged in agriculture, forestry or fishing. The authorisation comes not from the trade register but from entry in the register of self-employed farmers kept by the municipal office where the person has permanent residence.

For tax and contributions, an SHR is a self-employed person just like a sole trader. Income from agricultural production is business income; the farmer claims actual or flat-rate expenses and pays social and health insurance under the rules for the self-employed.

SHR status is often a condition for agricultural subsidies, such as direct payments for land or rural development support. What matters is that farming is actually carried on, not just formally registered.

How it works in practice

For clients starting farming alongside another business, we consider whether it is better to register as an SHR or run the activity within an existing company. The deciding factors are the scale of activity, planned subsidies and whether the client wants to separate farming risks from their other business.

An SHR can keep tax records or full accounts. With subsidies, remember that some count as taxable income, and there are specifics such as records of livestock, feed stocks or farmland, which may be owned or rented.

For VAT, an SHR follows the same rules as other businesses, but there is also a special scheme for farmers allowing, under certain conditions, a flat-rate compensation instead of standard registration. The choice should be made with customers and investments in mind.

What to watch out for

Registering as an SHR does not automatically confer a right to subsidies. Providers check that land is actually farmed and that conditions and records are kept. Breaches lead to subsidies being reduced or clawed back, including for past years.

An SHR is liable for business debts with all their personal assets, just like a sole trader. For larger investments in machinery or land and for loans, it is worth considering whether operating through a company would be more suitable.