Global Forum On Transparency and Exchange of Information For Tax Purposes: Peer Reviews: Global Forum On Transparency and Exchange of Information For Tax Purposes Peer Reviews: Slovak Republic 2012

GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE OF INFORMATION FOR TAX PURPOSES
Peer Review Report Phase 1 Legal and Regulatory Framework

SLOVAK REPUBLIC
Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews: Slovak Republic 2012
PHASE 1
March 2012 (reflecting the legal and regulatory framework as at December 2011)
This work is published on the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the OECD or of the governments of its member countries or those of the Global Forum on Transparency and Exchange of Information for Tax Purposes. This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.
Please cite this publication as: OECD (2012), Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews: Slovak Republic 2012: Phase 1: Legal and Regulatory Framework, OECD Publishing. http://dx.doi.org/10.1787/9789264168954-en
ISBN 978-92-64-16894-7 (print) ISBN 978-92-64-16895-4 (PDF)
Series: Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews ISSN 2219-4681 (print) ISSN 2219-469X (online)
Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda.
OECD 2012
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TABLE OF CONTENTS 3
Table of Contents
About the Global Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Information and methodology used for the peer review of the Slovak Republic . . . 9 Overview of the Slovak Republic. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Recent developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 Compliance with the Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 A. Availability of information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 A.1. Ownership and identity information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 A.2. Accounting records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41 A.3. Banking information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 B. Access to information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 B.1. Competent authoritys ability to obtain and provide information . . . . . . . . 48 B.2. Notification requirements and rights and safeguards. . . . . . . . . . . . . . . . . . 54 C. Exchanging information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C.1. Exchange of information mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C.2. Exchange of information mechanisms with all relevant partners . . . . . . . . C.3. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C.4. Rights and safeguards of taxpayers and third parties. . . . . . . . . . . . . . . . . . C.5. Timeliness of responses to requests for information . . . . . . . . . . . . . . . . . . 57 58 65 66 68 69
PEER REVIEW REPORT PHASE 1: LEGAL AND REGULATORY FRAMEWORK SLOVAK REPUBLIC OECD 2012
4 TABLE OF CONTENTS Summary of Determinations and Factors Underlying Recommendations. . . . 71 Annex 1: Jurisdictions Response to the Review Report . . . . . . . . . . . . . . . . . . 75 Annex 2: List of all Exchange-of-Information Mechanisms in Force. . . . . . . . 76 Annex 3: List of all Laws, Regulations and Other Material Received . . . . . . . 80
ABOUT THE GLOBAL FORUM 5
About the Global Forum

The Global Forum on Transparency and Exchange of Information for Tax Purposes is the multilateral framework within which work in the area of tax transparency and exchange of information is carried out by over 100 jurisdictions, which participate in the Global Forum on an equal footing. The Global Forum is charged with in-depth monitoring and peer review of the implementation of the international standards of transparency and exchange of information for tax purposes. These standards are primarily reflected in the 2002 OECD Model Agreement on Exchange of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax Convention on Income and on Capital and its commentary as updated in 2004. The standards have also been incorporated into the UN Model Tax Convention. The standards provide for international exchange on request of foreseeably relevant information for the administration or enforcement of the domestic tax laws of a requesting party. Fishing expeditions are not authorised but all foreseeably relevant information must be provided, including bank information and information held by fiduciaries, regardless of the existence of a domestic tax interest or dual criminality. All members of the Global Forum, as well as jurisdictions identified by the Global Forum as relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1 reviews assess the quality of a jurisdictions legal and regulatory framework for the exchange of information, while Phase 2 reviews look at the practical implementation of that framework. Some Global Forum members are undergoing combined Phase 1 and Phase 2 reviews. The Global Forum has also put in place a process for supplementary reports to follow-up on recommendations, as well as for the ongoing monitoring of jurisdictions following the conclusion of a review. The ultimate goal is to help jurisdictions to effectively implement the international standards of transparency and exchange of information for tax purposes. All review reports are published once adopted by the Global Forum. For more information on the work of the Global Forum on Transparency and Exchange of Information for Tax Purposes, and for copies of the published review reports, please refer to www.oecd.org/tax/transparency and www.eoi-tax.org.
EXECUTIVE SUMMARY 7
Executive Summary
1. This report summarises the legal and regulatory framework for transparency and exchange of information in the Slovak Republic. 2. The international standard which is set out in the Global Forums Terms of Reference to Monitor and Review Progress Towards Transparency and Exchange of Information, is concerned with the availability of relevant information within a jurisdiction, the competent authoritys ability to gain timely access to that information, and whether that information can be effectively exchanged with its exchange of information (EOI) partners. 3. The Slovak Republic is landlocked country in central Europe with a population of about five million. Bratislava is the Slovak Republics capital and largest city. Slovak is the official language. Formerly part of Czechoslovakia, the Slovak Republic became an independent state on 1 January 1993. 4. The Slovak Republic has a well developed and robust framework for exchange of information for tax purposes. As at 31 December 2011 it has signed 64 DTCs, 62 of which are in force. Most of these DTCs contain exchange of information articles that meet the international standard. 5. Most relevant entities are subject to comprehensive requirements under commercial and accounting laws to maintain and have available relevant ownership and accounting information. The Slovak Republic tax authority also has extensive powers to gather and exchange information for tax purposes. This is complemented by an extensive network of EOI agreements comprising relevant partners. These agreements mostly allow the Slovak Republic to exchange information effectively and to the standard. There is however a set of narrow circumstances where the Slovak Republics power to obtain information for EOI purposes is unclear. 6. The key concerns relating to the availability of information in the Slovak Republic relate to foreign companies and trusts. Ownership information is only available for foreign companies that have to keep documentation of their ownership for transfer pricing purposes, and this does not cover all relevant foreign companies. While Slovak laws do not allow the creation of trusts, foreign trusts are recognised in the Slovak Republic and trustees of
8 EXECUTIVE SUMMARY
foreign trusts are regulated under AML laws. However, it is not clear whether these trustees are obliged to maintain information on the trusts beneficiaries and settlors. 7. The report also notes that a wide scope of professional privilege is applicable to tax advisors and lawyers. Information subject to this privilege may not be disclosed for EOI purposes and this may limit the effective exchange of information in some instances. 8. Recommendations have been made where elements of the Slovak Republics EOI regime have been found to be in need of improvement. The Slovak Republics progress in these areas, as well as its actual practice in exchange information with its EOI partners, will be considered in its Phase 2 review which is scheduled to commence in the first half of 2013.
INTRODUCTION 9
Introduction
Information and methodology used for the peer review of the Slovak Republic
9. The assessment of the legal and regulatory framework of the Slovak Republic was based on the international standards for transparency and exchange of information as described in the Global Forums Terms of Reference to Monitor and Review Progress Towards Transparency and Exchange of Information for Tax Purposes, and was prepared using the Global Forums Methodology for Peer Reviews and Non-Member Reviews. The assessment was based on the laws, regulations, and exchange of information mechanisms in force or effect as at December 2011, other materials supplied by the Slovak Republic, and information supplied by partner jurisdictions. 10. The Terms of Reference breaks down the standards of transparency and exchange of information into 10 essential elements and 31 enumerated aspects under three broad categories: (A) availability of information; (B) access to information; and (C) exchange of information. This review assesses the Slovak Republics legal and regulatory framework against these elements and each of the enumerated aspects. In respect of each essential element a determination is made that either: (i) the element is in place; (ii) the element is in place, but certain aspects of the legal implementation of the element need improvement; or (iii) the element is not in place. These determinations are accompanied by recommendations for improvement where relevant. 11. The assessment was conducted by a team which comprised two expert assessors: Ms. Sylvia Moses, Commissioner of the Inland Revenue Department, Virgin Islands (British): Mr. Salah Gueydi, Senior Tax Advisor, Ministry of Economy and Finance, Qatar; and two representatives of the Global Forum Secretariat, Ms. Francesca Vitale and Mr. Guozhi Foo.
10 INTRODUCTION
Overview of the Slovak Republic

12. The Slovak Republic (or Slovakia) is a landlocked country in central Europe bordered by the Czech Republic and Austria to the west, Poland to the north, Ukraine to the east and Hungary to the south. It has a territory of approximately 49 000 square kilometres and a population of about five million. With approximately half a million inhabitants, the capital Bratislava is the Slovak Republics largest city. Slovak is the official language. Formerly part of Czechoslovakia, the Slovak Republic became an independent State on 1 January 1993. 13. The Slovak Republic has a diversified economy with one of the fastest growth rates in the European Union and the OECD. 1 Following its separation from the Czech Republic in 1993, the Slovak Republic has undergone a transition from a centrally planned economy to a free market economy. Today, nearly the entire economy has been privatised. The Slovak Republic is weathering the global financial crisis relatively well. Real GDP growth swung briefly to negative 4.7% in 2009 and rebounded to 4% in 2010. The recovery was export led and supported by an expansionary fiscal policy and there has been robust growth of the economy since the second half of 2009. 2 In the fiscal year ending in 2010, the Slovak Republics gross domestic product was approximately EUR 87 billion and the per capita GDP was approximately EUR 16 000. 3 14. The service sector constitutes the largest component of GDP (61.6%), followed by industry (34.5%) and agriculture (3.9%). 4 The Slovak Republics government has also implemented a number of fiscal and business sector reforms to make the country more attractive to foreign investments. As a result, foreign direct investment inflow has grown more than 600% since 2000. 5 Foreign direct investment is mainly from other European countries
1. CIA, The World Factbook Country Comparison: National product real growth rate, 2010, https://www.cia.gov/library/publications/the-world-factbook/rankorder/ 2003rank.html?countryName=Slovakia&countryCode=lo&regionCode=eur&rank =98#lo, retrieved 10 October 2011. IMF Country Report No.11/122, Slovak Republic: 2011 Article IV Consultation Staff Report; Informational Annex; and Public Information Notice on the Executive Board Discussion, June 2011, www.imf.org/external/pubs/ft/scr/2011/ cr11122.pdf, retrieved 3 November 2011. CIA, The World Factbook Slovakia: https://www.cia.gov/library/publications/ the-world-factbook/geos/lo.html, retrieved 10 October 2011. CIA, The World Factbook Slovakia: https://www.cia.gov/library/publications/ the-world-factbook/geos/lo.html, retrieved 10 October 2011. US Department of State, www.state.gov/e/eeb/ifd/2008/101009.htm, retrieved 10 October 2011.
2.
3. 4. 5.
INTRODUCTION 11
and is in the following sectors: industry; banking and insurance; wholesale and retail trade; production of electricity, gas and water; transport and telecommunications. 15. The main industry sectors are car manufacturing and electrical engineering. From 2004 to 2008, the Slovak Republics exports increased on average by 26% each year, and imports by 25.3%. Both imports and exports were diversified across partners. Overall, the Slovak Republics main trading partners are the European Union, Russia and China. 6 16. The Slovak Republic joined the European Union in 2004 and adopted the Euro as its national currency in 2009. It is also a member of the United Nations, the OECD, NATO, the World Trade Organisation, the Council of Europe and the Intra-European Organisation of Tax Administrations (IOTA).
Governance and legal system

17. The Slovak Republic is a parliamentary democratic republic with a multi-party system. Formally, the Slovak head of state is the President, elected by direct popular vote for a five-year term. Most executive power lies with the Prime Minister, who is the head of government and is appointed by the President on the basis of the general election results. The remainder of the cabinet is appointed by the President on the recommendation of the Prime Minister, the complete Government is mandatorily approved by the Parliament within 30 days. The Slovak Republics highest legislative body is the 150-seat unicameral National Council of the Slovak Republic (Nrodn rada Slovenskej republiky). Delegates are elected for a four-year term on the basis of proportional representation. 18. The Slovak Republic is subdivided into 8 regions (krajov), each of which is named after its principal city. Regions have enjoyed a certain degree of autonomy since 2002. Their self-governing bodies are referred to as Self-governing (or autonomous) Regions (samosprvne kraje) or UpperTier Territorial Units (vyie zemn celky, VC). The regions are further subdivided into 79 districts (okresy). 19. The Slovak Republics legal system is based on civil law. The basic rules applying to the rights and obligations of individuals and legal persons, ownership and certain types of contracts are laid down in the Civil Code ( ). The Commercial Code ( ) stipulates the general rules governing business relationships as well as the rules related to companies and other business entities. The 1992 Constitution is the supreme law of the Republic. Constitutional laws and other laws are adopted
6. WTO data http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Language =E&Country=SK, retrieved 7 November 2011.
12 INTRODUCTION
by the National Council (Art. 86 Constitution). The National Council also supervises on the implementation of these laws. The Government can issue regulations to implement laws, within the limits laid down by the law. Laws come into force on their promulgation. 20. The Slovak Republics lower courts are the courts of 1st instance (Okresn sd) and the courts of 2nd instance (Krajsk sd). Each of these courts has a commercial law section, a criminal law section and an administrative law section. Tax cases are heard by the administrative law section of the local court that is territorially competent. The Supreme Court is the Slovak Republics highest judicial body, having competences either as an appeal court or a court de cassation. The Supreme Courts judges are elected by the National Council, whilst ordinary judges are appointed or transferred by an independent Judiciary Council. The Constitutional Court of Slovakia (stavn sd) rules on constitutional issues. Its 13 members appointed by the President from a slate of candidates nominated by parliament. 21. International treaties are negotiated and ratified by the President of the Slovak Republic (Art. 102(1)a Constitution). The President may delegate the negotiation of an international treaty to the Government or, upon consent of the Government, to its individual members. International treaties that directly confer rights or impose duties on natural persons or legal persons require the approval of the National Council before ratification (Art. 7(2) Constitution). The execution of a treaty approved by the National Council and ratified by the President does not require any special law; such treaties prevail over all domestic laws except the Constitution (Art. 7(5) Constitution). This is the case for both Double Taxation Conventions (DTCs) and Tax Information Exchange Agreements (TIEAs). 22. Under the Income Tax Act (Act No.595/2003), the Slovak government can also conclude agreements regulating to taxation and related legal relations in respect of dependent territories entitled to conclude international relations (Art. 1(2)). Such agreements take precedence over the Income Tax Act itself, but not over the other laws in the Slovak Republic. Currently, only one EOI agreement falls into this category. 23. A complete list of relevant legislation and regulations is set out in Annex 3.
Tax system
24. In the Slovak Republic, income taxes are imposed according to the provisions of the Income Tax Act (ITA). This law contains the rules for corporate income tax as well as for individual income tax. The Slovak tax systems underwent a major tax reform in 2003-4 aimed at simplifying the
INTRODUCTION 13
calculation of taxes and transfer the tax burden from direct to indirect taxes. As of 31 December 2011, the administrative aspects of taxation are governed by Act No.511/1992, the Tax Administration Act (TAA). As of 1 January 2012, the administrative aspects of taxation will be governed by the new Act No. 563/2009 Coll. on tax administration (Tax Order). 25. Under the Income Tax Act, individuals that are tax resident in the Slovak Republic have unlimited tax liability, i.e. are liable to tax on their worldwide income. Non resident individuals are liable to tax only for income derived from Slovak sources (limited tax liability). The tax year is the calendar year. The rate of personal income tax is 19% of the tax base. Tax allowances can be claimed to reduce active income only, i.e. income from employment, entrepreneurial income and self-employment income. 26. Companies that are tax resident in the Slovak Republic also have unlimited tax liability and are taxed on their worldwide income. A company is treated as a Slovak tax resident if it is incorporated or has its place of effective management in the Slovak Republic. The place of effective management means the location where the managerial and business decisions of the management bodies and supervisory bodies of the company are made, even if this place is not entered into the commercial register (s. 2(1) d(2) ITA). Permanent establishments of foreign companies 7 are generally taxed on Slovak-source income only. The corporate tax year is the companys financial year. The corporate tax rate is 19%. Dividends received by resident and non-resident shareholders from a resident company are not subject to any Slovak tax in the hands of the shareholders if they are paid out of profits derived by the distributing company from 1 January 2004 onwards. Capital gains derived by resident and non-resident individual shareholders from the disposal of shares in resident companies are generally included in their aggregate income, which is subject to the 19% flat rate. Equally, capital gains on the sale of shares in a resident company by resident corporate shareholders are included in ordinary corporate income. 27. General partnerships are not subject to corporate income tax, but their profits are allocated to the partners and included as business income in their individual tax returns. Similar rules apply to the share of profits of a limited partnership allocated to its general partners. The share of profit allocated to limited partners is taxed at the level of the partnership under the rules applicable to companies (s. 14(5), Income Tax Act). 28. Municipalities may introduce local taxes and local fees (such as fees for communal waste). A vehicle tax is levied by the regions. Valueadded tax (VAT) and excise duties are also levied. The Slovak Republics
7. A permanent establishment is a fixed place of business which generally gives rise to income or value-added-tax liability in a particular jurisdiction.
14 INTRODUCTION
VAT system is fully harmonised with the European VAT legislation. The threshold for obligatory VAT registration for taxable persons with their seat or permanent address, place of business, or permanent establishment in the Slovak Republic, is a turnover of EUR 49 790 for the previous consecutive 12 calendar months. Voluntary registration is also possible. VAT registration is obligatory for foreign persons (taxable persons without seat or VAT establishment in the Slovak Republic) that intend to carry out any activity subject to VAT in the Slovak Republic. 29. The total tax revenues in 2010 amounted to EUR 7.9 billion (73% of Slovak total revenue). Corporate income tax revenue was EUR 1.3 billion (11.5% of total tax revenues). The Slovak Republic is working to increase the efficiency of the revenue collection system by moving to integrated revenue collection under its UNITAS project. 8 This was launched in 2008 and is expected to be fully implemented by 2014. Under this project the existing tax and customs administrations will be merged and a new single system will be created for the management and organisation of the collection of government revenues.
International issues and exchange of information

30. Act No.76/2007, as amended, on International assistance and cooperation in administration of taxes amending and supplementing certain acts (EOI Act), is the legislation pursuant to which the Slovak Republic provides assistance under its EOI agreements. Pursuant to the EOI Act, the Ministry of Finance or a tax authority designated by the Ministry is the competent authority for exchange of information in tax matters (Art. 2(1)c and 4(1)). 31. The other avenues through which the Slovak Republic provides international co-operation in tax matters include: the EU Mutual Assistance Directive 77/799/EEC the Slovak Republic is able to exchange information on tax matters under this directive; and the EU Savings Directive (EU-SD) under the EU-SD, the Slovak Republic sends and receives automatically, on an annual basis, information on interest payments received by natural persons from/to EU members. 32. In addition to above instruments, the Slovak Republic as an EU Member State applies the following regulations in the field of administrative co-operation:
8.
The projects name UNITAS was chosen as unitas means unity in Latin.
INTRODUCTION 15
Council Regulation (EU) No. 904/2010 of 7 October 2010 on administrative cooperation and combating fraud in the field of value added tax (recast of the Council Regulation (EC) No 1798/2003 of 7 October 2003 on administrative cooperation in the field of value added tax); Council Regulation (EC) No. 2073/2004 of 16 November 2004 on administrative cooperation in the field of excise duties.
The Slovak Republics commercial laws and financial sector

33. The Slovak financial market comprises four sectors banking (primarily represented by banks and branches of foreign banks), capital market (mainly securities dealers, asset management companies, the stock exchange and the central securities depository), insurance (mainly insurance companies and branches of foreign insurance companies) and pension savings (mainly pension fund management companies and supplementary pension companies/ pension insurance companies). The banking sector is the most important component of the financial sector. Banks are licensed and supervised by the National Bank of Slovakia (Nrodn Banka Slovenska, NBS). This includes commercial banks, savings banks and branch offices of foreign banks. As at September 2011, there were 29 commercial banks, savings banks and branch offices of foreign banks operating in the Slovak Republic. The NBS also licenses and supervises insurance companies, foreign exchange business providers and financial intermediaries. 34. The Slovak Republics financial sector is relatively modest, with total banking assets of about EUR 55 billion as of 2010. It is dominated by foreign owned institutions. 9 35. With reference to professional service providers, in March 2005 there were 318 notaries public in the Slovak Republic and 4 512 lawyers authorised to practice law. Audit services were performed by 101 audit companies and 813 natural persons. There were 311 natural persons with licenses to provide tax advisory services. 10 These service providers are only regulated under the Slovak Republics AML/CFT laws. The Slovak Republic has advised that
9. 10. Source: IMF www.imf.org/external/pubs/ft/scr/2011/cr11122.pdf, retrieved 7 November 2011. MONEYVAL Third Round Detailed Assessment Report on Slovakia (MONEYVAL (2006) 09); www.coe.int/t/dghl/monitoring/moneyval/evaluations/ round3/MONEYVAL(2006)09Rep-SVK3_en.pdf. MONEYVAL (which is the Council of Europes Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism) also adopted two progress reports on Slovakia (in 2007 and 2009).
16 INTRODUCTION
standalone company service providers that are not lawyers, auditors, tax advisors or notaries are rare in the Slovak Republic. 36. The Slovak Republics AML/CFT legislation is based on EU Directive 2005/60/EC of 26 October 2005, as transposed in Act No.297/2008 (the AML Act). Under the AML Act, obliged entities are required to undertake customer due diligence and they include banks and other financial and non-financial institutions, as well as auditors, accountants, tax advisers, notaries, lawyers and other professional service providers (Art. 5). The central authority in the Slovak Republic in the area of the prevention and detection of money laundering and terrorist financing is the Financial Intelligence Unit (Spravodajsk Policajnho zboru SJFP). However, SJFP is not the only authority responsible for anti-money laundering matters. The other authorities involved include the General Prosecutors Office of the Slovak Republic, NBS, the Ministry of Justice of the Slovak Republic, the Ministry of Finance.
Recent developments
37. The Slovak tax administration is currently undergoing a major structural reform. With effect from 1 January 2012 the two existing separate authorities the Tax Directorate and the Customs Directorate of the Slovak Republic will merge into one institution (the new Financial Directorate of the Slovak Republic) in order to improve the effectiveness of the tax and custom administration. Accordingly, as of 1 January 2012, the new Act No. 563/2009 Coll. on tax administration (also known as the Tax Order) will replace the Tax Administration Act (TAA) that was in force up to 31 December 2011. The new act will reiterate all the provisions relevant for EOI purposes contained in the preceding TAA, including those relating to the enforcement of tax laws and the tax authorities information access powers. 38. A new Mutual Assistance Directive 2011/16/EU was adopted by the European Council on 15 February 2011 and will come into force on 1 January 2013. The directive ensures that EU standards for transparency and exchange of information on request are aligned to international standards. In particular, it provides that Member States can no longer refuse to supply information solely because this information is held by a bank or other type of financial institution. More information on the directive can be found at http:// ec.europa.eu/taxation_customs/taxation/tax_cooperation/mutual_assistance/ direct_tax_directive/index_en.htm.
COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 17
Compliance with the Standards
A. Availability of information
Overview
39. Effective exchange of information requires the availability of reliable information. In particular, it requires information on the identity of owners and other stakeholders as well as accounting information on the transactions carried out by entities and other organisational structures. Such information may be kept for tax, regulatory, commercial or other reasons. If information is not kept or the information is not maintained for a reasonable period of time, a jurisdictions competent authority may not be able to obtain and provide it when requested. This section of the report assesses the adequacy of the Slovak Republics legal and regulatory framework on availability of information. 40. The Commercial Code and the Commercial Register Act require all Slovak companies, co-operatives and partnerships to file information on the identities of their members, shareholders or partners with the Commercial Register at the point of registration. Subsequent changes in this information must also be filed with the Commercial Register when they occur. Additionally, all Slovak-incorporated companies and co-operatives are required to maintain an up-to-date register of their shareholders/members. The transfer of a registered share is not valid until the change in the list of shareholders is made and any company in breach of this obligation is liable for any damage that might arise to both the transferor and transferee. Foreign companies and partnerships need to register with the Commercial Register in the Slovak Republic
18 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

to conduct commercial activities, but continue to be regulated by the laws of their jurisdiction of incorporation. They are not expressly required to maintain or file identity and ownership information under Slovak laws, but may do so under the tax law for transfer pricing purposes. Many foreign companies that conduct business in the Slovak Republic will have this obligation, but this is not sufficient to cover all relevant foreign companies. 41. Trusts cannot be formed under Slovak law and there is no registration requirement for trusts. The Slovak Republic, however, recognises trusts formed under the laws of foreign jurisdictions and there are no restrictions on Slovak residents providing trustee or administrative services to such trusts. The availability of ownership information in respect of such trusts arise from the AML/CFT obligations on such professional service providers and it is not clear whether these AML/CFT obligations would ensure that the trust settlors and beneficiaries are fully identified. 42. Foundations may be formed pursuant to the Slovak Republics law. They are registered and under an obligation to disclose the identity of the founders. Foundations are non-profit entities and cannot allocate gains to the founders or to the managers. 43. Enforcement provisions are in place to ensure that relevant entities maintain information as required under the various laws. While no direct financial sanctions apply for companies and co-operatives that fail to maintain a register of their shareholders/members, partnerships, companies and co-operatives are required to file and update partner/shareholder/member information with Commercial Register and appropriate sanctions apply to address the risk of non-compliance. 11 44. With regard to accounting records, most relevant entities are required to keep comprehensive accounting information, including underlying documentation, under either accounting or tax law. AML regulated entities are also required to keep records of all the transactions they conduct for their customers, including underlying documents. The obligations under accounting or tax law, however, do not cover foreign trusts. Accounting information of foreign trusts is instead made available through the information kept by the beneficiaries themselves under any applicable Slovak accounting or tax laws, as well as information kept by their AML-regulated service providers (i.e. the Slovak trustee). 45. In respect of banks and other financial institutions, a combination of the anti-money laundering/counter-financing of terrorism regime and
11. A legal or natural person who fails to file changes in ownership information to the Commercial Register is subject to a fine of up to EUR 3 310. Also see paragraph 118.
licensing requirements imposes obligations to ensure that all records pertaining to customers and their accounts as well as related financial and transaction information are available. Banks and financial institutions are expressly prohibited from establishing business relationships with or carrying out transactions for anonymous customers.
A.1. Ownership and identity information

Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities.
46. Business entities are considered incorporated upon entry of their details in the Commercial Register. The Commercial Register (also referred to as the Business or Companies Register) is a public register containing data and deeds prescribed by the law (s. 27). The Commercial Register Act (Act No.530/2003) contains the list of data that need to be submitted to the registrar and the documents that need to be deposited. It also regulates the registration procedure and the inspection of the registered data. The Commercial Register Act is supplemented by secondary legislation, especially the Ordinance of the Ministry of Justice No 25/2004 Coll. which sets out registration forms and list of documents needed for registration in the Commercial Register. 47. Entities subject to registration in the Commercial Register are the following: partnerships, companies, co-operatives, sundry legal entities, the registration of which is required by a special act, legal entities established under the law of the European Communities, enterprises and branches of enterprises of non-residents; branches and other units of enterprises, if prescribed by a special act; and individuals permanently resident in the territory of the Slovak Republic and conducting business under this Act, who are registered in the Companies Register upon their request or if their registration is prescribed by a special act. 48. As from 1 July 2011 the new Commercial Gazette Act introduced the electronic Commercial Gazette as the only official version of the national gazette for the compulsory disclosure of information on certain types of companies pursuant to Article 3(5) of Directive 2009/101/EC.
Companies (ToR A.1.1)

49. The Slovak Republics laws provide for the creation of the following types of companies: Private limited liability companies Private LLCs are regulated under Part IV of the Commercial Code (CC). A private LLCs liability is limited by the contributions of its members, whose numbers may not exceed 50 (s. 105). The minimum capital prescribed by the law is EUR 5 000 and the ownership interest of its members is determined by the ratio of the members pledged contribution to the private LLC and the private LLCs registered capital, unless the memorandum of association provides otherwise (s. 108). Each ownership interest may be in turn owned by more than one person. A single founder is sufficient to establish a limited liability company. A company with a single member, however, cannot be a single founder (or a single member) of another company (s. 105a). An individual conducting business as a sole entrepreneur can be a single shareholder in up to three Slovak companies. Joint stock companies Joint stock companies are regulated under Part V of the Commercial Code. Such companies have their capital divided into shares and may be public or private. A public joint stock company is one whose shares are available for public subscription or accepted for trading by a stock exchange. A joint-stock company may have a single shareholder, provided that it is a legal entity. A sole founding shareholder must sign the founding deed that establishes the company. If there are two or more founders, they prepare a founding memorandum. A draft of the companys by-laws must be prepared as a part of the founding deed or the founding memorandum in the form of a notarial deed. European public limited liability companies (Societas Europaeas, SEs) SEs are regulated under Act No.562/2004. Pursuant to Article 10 of the relevant EU legislation (Regulation No. 2157/2001), the laws that apply to Slovak joint stock companies apply mutatis mutandis to SEs. European co-operative societies (SCEs) SCEs are regulated under Act No. 91/2007. Pursuant to Article 11 of the relevant EU legislation (Regulation No. 1435/2003), the laws that apply to Slovak co-operatives and joint stock companies apply to SCEs mutatis mutandis (as set out by the SCE Regulation and SCE Act). Co-operatives Co-operatives are formed by at least five members (or at least two legal entities) to undertake business for the economic or social benefit of their members. Members are not liable for the
debts/obligations of the co-operative (s. 221, CC). The ownership interest of its members is determined by the ratio of the members contribution to the co-operative and the co-operatives registered capital, unless otherwise decided by the members. 50. Under the Slovak Commercial Code, any action at law related to the establishment, incorporation, amendment, winding-up or deletion of a partnership or a company must be executed in writing; the law prescribes the actions at law, which must have form of a notarial deed (s. 63). The actions prescribed under the Slovak Commercial Code are as follows: a company is founded on the basis of a Memorandum of Association executed by each founder, unless other provisions of Commercial Code stipulate differently. The founders signature must be officially authenticated. The official authentication is carried out by notary or by municipal office (s. 57 CC); the authenticity of signatures on the inscription proposal also need to be officially approved; only a Notary can issue a pre-merger certificate (s. 69aa CC, see also Art. 10 of the Directive 2005/56/EC on cross-border mergers); the Memorandum of Association (which shall include a draft Articles of Association) of a joint stock company shall be in a form of a notarial deed (s. 162 in conjunction with s. 172 CC); the report of the constituent General Meeting (which among other things adopts the Articles of Association) of a joint stock company shall be in a form of a notarial deed (s. 171 CC); in case of a joint stock company which is established without a public call to a subscription of shares (founders agree to pay up the entire registered capital), the memorandum of association shall include all decisions which would be otherwise taken by the constituent General Meeting, and it shall be in a form of a notarial deed (s. 172 CC); the major decisions of the General Meeting of a joint stock company are subject to a qualified majority voting and report of such General Meetings shall be in a form of a notarial deed (s. 187 CC); the major decisions mentioned above are: change of articles of association; increase and reduction of share capital; decision on the authorisation of the Board of Directors to decide on an increase of the registered capital up to the determined amount in compliance with the (s. 210 CC); issue of preference bonds and convertible bonds;

dissolution and winding-up; change of legal form;
the decisions of a General Meeting of a joint stock company which has a sole shareholder have to be in a form of a notarial deed (s. 190 CC); a cross-border merger contract shall be in a form of a notarial deed (s. 218a CC); the report of a General Meeting approving the cross-border merger shall be in a form of a notarial deed (s. 218c CC); the report of the constituent General Meeting of a cooperative (which among other things adopts the Articles of Association) shall be in a form of a notarial deed (s. 224 CC); and the decision of a General Meeting of a cooperative on its dissolution shall be in a form of a notarial deed (s. 254 CC).
Information required to be provided to government authorities Commercial Laws

51. Private limited liability companies, joint-stock companies and cooperatives are incorporated when entered into the Commercial Register of the competent regional court (ss. 62(1) and 225, CC). The competent court is the court of the district where the company or co-operative has its seat or its place of business (s. 4(2) Commercial Registration Act). The application for an entry into the register must be submitted within 90 days from its establishment or its receipt of a trade licence for limited liability companies and joint-stock companies. For joint-stock companies, the application must be signed by all members of the board of directors. 52. Data to be filed by companies upon registration include the names, surnames, and residence address of the individual members/shareholders, as well as the business name or name and seat of the legal persons that are members/shareholder. This applies to both joint-stock companies (s. 2(2)a Commercial Registration Act) and private limited liability companies (s. 2(2) c). Co-operatives need only submit information on the amount of its assets and members contributions. All entities formed under the Commercial Code (including joint stock companies and private limited liability companies) are required to have registered offices 12 inside the Slovak Republic (s. 21, CC).
12.
A Registered Office in the context of the Commercial Code refers to the primary place of business of the company.
53. Companies and co-operatives are also required to submit to the Commercial Register their articles of incorporation, incorporation deed, memorandum of association or notarial record of constituent general meeting (s. 3(1)a Commercial Registration Act). The information to be provided in these documents is outlined below and companies and co-operatives also required to file each change to these documents (s. 3(1)b) and deposit the full text of the documents after each change is made. 54. For private LLCs, the memorandum of association must contain, among other information (s. 110 CC): the business name and registered office of the company; identity of the companys members by specifying the business name and the registered office (if a legal entity), or the name and residence (if an individual); and the amount of each members contribution to the company, the fraction thereof paid upon its establishment, and terms of payment of these contributions and a description of any contribution in kind. 55. For joint-stock companies, the memorandum of association must contain, among other information, the business name, the registered office of the company and its scope of business; the number of shares, their nominal value, and their class; the number of shares subscribed by the individual founding shareholders (s. 163 CC). When a joint-stock company is established through a public call for the subscription of shares, a list of subscribers is prepared that contains each subscribers identity details (business name, registered office and identification number, if any, if the subscriber it is a legal entity, or the name, residence and birth certificate number if he is an individual). Once the required amount of shares has been subscribed, a constituent general meeting of the subscribers is called (s. 169ff. CC). The meetings minutes, together with the attendance list identifying the attending subscribers, are notarised and filed with the Register (s. 3(1)a Commercial Registration Act). 56. For co-operatives, the report from the constituent General Meeting shall be in a form of a notarial deed and must include among other things a list of members and the amounts of the individual contributions pledged. Articles of association must also be attached to this deed, containing among others information on the co-operatives scope of business activities, address of registered office, the terms of joining and withdrawal from the co-operative. 57. Prior to registering a company/co-operative or recording changes in the registered data, the Registration Court (the court that is responsible for the registration of the company) is required to perform certain regularity checks. For joint stock companies, the Registrar is required to check whether the articles of association contain all terms required by the law, refer to at

least two partners, where signed by all members and the members signatures have been authenticated by a notary (s. 7(1)). For private LLCs, the Registrar needs to verify, inter alia, whether the articles of association or deed of foundation contain all terms pursuant to the law, there are no more than 50 partners listed in the articles of association, the articles of association were signed by all partners and the signatures of all partners have been authenticated. 58. The Registration Courts are obliged to maintain information entered in the Companies Register under the Ordinance No.543/2005. Pursuant to this ordinance, the registration data and the documents submitted by the company need to be kept for a minimum of 75 years (s. 202). 59. Slovak law also provides for the creation of non-profit organisations under the Act on Non-profit Organisations (213/1997) and citizen associations under the Act on Association of Citizens (83/1990). A non-profit organisation is a legal entity form to perform community services; its earnings cannot used for the benefit of the founders, board members or its employees, but must be used in its entirety to provide charitable services (s. 2). A citizen association is limited to performing the functions of public authorities and may not be used for business purposes (s. 5). These entities are therefore not relevant for the purposes of this review.
Foreign companies
60. A foreign incorporated company may only conduct business in the Slovak Republic through a branch (or an enterprise). 13 Branches must be registered in the Commercial Register and the foreign company must furnish full details as to the nature of business they intend to conduct in the Slovak Republic (s. 21(4) CC). The foreign company need only submit information pursuant to Directive No.89/666/EEC on Disclosure Requirements in Respect of Branches. This includes the address of the branch; the activities of the branch; the companys place of registration and registration number; particulars of the company directors and the companys memorandum of understanding or articles of association, and their respective changes. It does not expressly include the identity of the owners of the foreign incorporated company (see also ss. 2(3), 2(4), 2(5), 2(6) and 3(2)b Commercial Registration Act). 61. For company law purposes, a foreign company incorporated in a foreign register is not treated as a Slovak company, unless it moves it registered office to the Slovak Republic (s. 21). If it has a registered office in the Slovak
13. An enterprise is defined under Section 5 of the Commercial Code as tangible, intangible and personnel assets which are used in business but it is basically covered by the term branch.
Republic, the company would be considered a resident Slovak company for company law purposes and would be required to comply with Slovak company laws applicable to Slovak-incorporated companies.
Tax Administration Act

62. Once a company or co-operative has been registered in the Commercial Register, the competent court communicates this to the relevant tax office, the statistical office and the trade licence office (s.10(4), Commercial Registration Act). 63. In addition, all legal entities which are authorised to conduct business in the Slovak Republic (i.e. are registered in the Commercial Register) are obliged to register with the tax administration within 30 days from the date of authorisation (s. 31(1) TAA). The information that must be submitted to the tax office includes business name, seat of business, business identification number, bank account details and the identity of persons authorised to deal in its tax matters. It does not include any information on the owners. Any changes to the above information must be advised to the tax authority within 15 days of the date of change. 64. The Income Tax Act and Slovak transfer pricing regulations govern situations where a business entity in the Slovak Republic has transactions with a related non-resident entity. Two parties are related if they are (a) relatives; (b) entities that are economically or personally related 14; or (c) entities with certain other relationships. Related parties for income tax and transfer pricing purposes also covers situations where: (a) the Slovak business entity is a permanent establishment of a foreign incorporated company; (b) a Slovak-incorporated company has one or more permanent establishments abroad, and (c) a Slovak-incorporated company is a subsidiary or parent of a foreign-incorporated company. 15 65. In such cases, certain entities are obliged to maintain additional documentation for transfer pricing purposes. For the purposes of determining the requirements and scope of transfer pricing documentation in the Slovak Republic, taxpayers are divided into two groups.
14. Economically or personally related means: (a) when one entity directly or indirectly holds more than 25 % of the share capital or voting rights of the other; (b) an entity and its statutory representative or a member of its supervisory board; (c) two or more entities in which a third entity directly or indirectly holds more than 25 % of the share capital or voting rights; or (d) entities having the same person as their statutory representative or a member of their supervisory board. Section 2, 17 and 18 of the Income Tax Act, read together with the Guideline laying down the content of the documentation on the pricing method applied by the taxpayer under section 18(1) of the Income Tax Act.
15.

66. The first group relates to accounting units (taxpayers) that report a trading income and tax base in accordance with the Accounting Act based on International Accounting Standards (IAS)/ International Financial Reporting Standards (IFRS), i.e.: banks, asset management companies, insurance companies (except for health insurance companies), reinsurance companies, branches of foreign banks, foreign asset management companies, foreign insurance companies, foreign reinsurance companies; and commercial companies which fulfil two of the following conditions: the average headcount more than 2 000; overall assets greater than EUR 165 969 594; and annual turnover greater than EUR 165 969 594.
67. Such taxpayers must keep basic transfer pricing documentation. The scope of documentation requirements complies with EU Code of conduct on transfer pricing documentation and inter alia includes: general documentation in relation to the group, including identification and legal form of the individual members of the group, description of the global organisational and ownership structure of the group, including changes in comparison with the preceding tax period; and specific documentation in relation to the taxpayer, including identification and legal form of the taxpayer, description of his organisational and ownership structure, including changes in the preceding tax period. 68. The taxpayer should maintain documentation on controlled transactions, which are significant. The appraisal of controlled transaction significance is up to taxpayer. 69. The second group relates to other taxpayers those who carry out the controlled transactions and do not report their business results in individual financial statements under IAS/IFRS. Such taxpayers maintain only simplified documentation, the purpose of which is to provide documentary evidence of adherence to the arms length principle in the controlled transactions that are carried out. This documentation must be produced only to the extent required by accounting regulations: specifically, as footnotes to the annual accounts. 70. The Slovak Republic has advised that the obligation to document changes in the companys ownership structure necessitates that the company maintain sufficient identity information on its members and shareholders and update this information on a timely basis. Such information is contained in
Notes to the individual financial statements and must be submitted together with the companys tax return. This obligation will apply to a number of, but not all relevant foreign companies in the Slovak Republic.
Information required to be held by companies

71. The Commercial Code requires all private LLCs to keep registers of members containing the name, residence and birth certificate number of each individual member and the business name, registered office and identification number of each member that is a legal entity (s. 118). Any changes in membership must be reflected in the register and must also be notified to the Commercial Register. The change in ownership and associated liability is not valid with respect to the company until it is registered with the Commercial Register. 16 72. Joint stock companies can issue registered and bearer shares. Registered shares may be issued in paper or book-entry form, while bearer shares may only be issued in book-entry form. 73. All joint stock companies are obliged to maintain a register of shareholders who hold registered shares in the company. The register must contain the name, residence and birth certificate number of each individual shareholder and the business name, registered office and identification number of each shareholder that is a legal entity. 17 Any transfer of a registered share will only be effective after the transfer is registered in the shareholder register. (s. 156, CC) 74. Where all of a joint stock companys registered shares are issued in book-entry form, the joint stock company has the option of outsourcing the obligation of maintaining a shareholder register to a Central Depository, a joint stock company established and regulated under Section 99(3) of Act No.566/2001. The Central Depository is a licensed entity that carries on the business of acting as a depository of securities in the Slovak Republic. 75. For ownership information relating to bearer shares, please see the section on bearer shares below.
16. 17.
Where the shareholder is a foreign individual, the date of birth will suffice in place of the birth certificate number. Where the shareholder is a foreign legal entity, the identification number will only be required to the extent applicable. Section 156 of the Commercial Code. Where the shareholder is a foreign individual, the date of birth will suffice in place of the birth certificate number. Where the shareholder is a foreign legal entity, the identification number will only be required to the extent applicable.

76. All co-operatives must maintain an up to date register of members. The register must contain the name, residence and birth certificate number of each individual member and the business name, registered office and identification number of each member that is a legal entity, as well as the contribution pledged and paid up by each member (s. 228, CC) 77. Foreign incorporated companies carrying on business in the Slovak Republic continue to be regulated by the laws of the incorporation jurisdiction (s. 22 CC). Slovak law does not expressly require them to maintain ownership and identity information.
Information held by service providers

78. The regulation of service providers in the Slovak Republic is an avenue through which identity and ownership information of relevant entities and arrangements can be made available. Service providers regulated under the Act of 2 July 2008 on the Prevention of Legalization of Proceeds of Criminal Activity and Terrorist Financing 297/2008 (AML Act) are: banks; a financial institution other than a bank, such as the Central Securities Depository, a stock exchange, a commodity exchange, or an asset management company and depository, etc.; the Export-Import Bank of the Slovak Republic; payment institution, agent of payment services and institution of electronic money; a gambling game operator; a postal undertaking; a court distrainer 18; an administrator who manages activity within bankruptcy, restructuring proceedings or debt removal proceedings under a special regulation; an auditor. an accountant, a tax advisor; a legal entity or a natural person authorised to mediate sale, rent or purchase of real estate; an advocate or notary if he provides the customer with legal services related to purchase or sale of real estate or ownership interests in a company, management or safekeeping of funds, securities or other
18. A person who seizes or holds property to compel the repayment of debts.
property, opening or management of an account with a bank or a foreign bank branch or of a securities account or establishment, operation or management of a company, an association of natural persons or legal entities, a special-purpose corporation or another legal entity, a property management or a company service provider (see definition below), unless it is already covered under one of the above categories; a legal entity or a natural person authorised to provide the services of organisational and economic advisor, the services of public carriers and messengers or forwarding services; legal entity or a natural person authorised to mediate housing savings; a legal entity or a natural person authorised to operate an auction hall, a legal entity or a natural person authorised to trade in works of art, collectors items, antiques, cultural monuments, items of cultural heritage, precious metals or gemstones, a legal entity or a natural person authorised to place products made of precious metals or gemstones on the market or a legal entity or a natural person authorised to operate a pawnshop; and any other person if so laid down by a special regulation. 79. A service provider of property management or a company service provider is further defined under the AML Act as any business that provides third persons with any of the following services (s. 9c): establishment of companies or other legal entities; acting as a statutory body, a member of a statutory body, a person falling within the managing powers of a statutory body or its member, a person acting per procura, head of an organisational unit of a branch or other organisational unit of an enterprise, a liquidator of a company or acting in a similar position in relation to third persons or arranging such activity by another person; providing a registered office, address of a registered office, correspondence address and other related services for legal entities and special-purpose corporations irrespective of their legal personality which manage and distribute funds; acting as a manager of a corporation (see definition below) or arranging such activity by another person; and acting as an authorised nominee shareholder for a third person other than an issuer of securities admitted to trading on a regulated market which is subject to disclosure requirements under a special regulation or arranging such activity by another person.

80. The term corporation is in turn defined as a foundation, nonprofit organisation providing generally useful services, non-investment fund or another special-purpose corporation irrespective of its legal personality which manages and distributes funds (s. 9(f)). The Slovak authorities have indicated that the term special-purpose corporation irrespective of its legal personality which manages and distributes funds would include foreign trusts administered or having a trustee in the Slovak Republic. 81. The AML Act requires obliged entities to perform customer due diligence measures at the moment of establishing a business relationship with a client (s. 10(a)), unless the client itself is an AML-regulated credit or financial institution or a company (in the context of service providers) with AML obligations equivalent to those laid down in the AML Act (s. 11). These obligations do not include the identification the AML-regulated entities owners. 82. The customer due diligence measures include the identification of a customer and verification of his identification and conducting ongoing monitoring of the business relationship including ensuring that the information held on the customer is kept up-to-date (ss. 7, 9 and 10 AML Act). Where the customer is a legal entity, identification refers to identifying its business name, address of registered office, identification number and the identity of a natural person who is authorised to act on behalf of the legal entity (s. 7). Identification in the context of a customer that is a natural person refers to identifying his name, surname, birth registration number or date of birth, address, nationality, type and number of his identification document. 83. Obliged entities are also required to identify, using an AML-risk based approach, the beneficial owners of their customers. The term beneficial owner is defined as the natural person the benefit of whom a transaction is being carried out or who has a direct or indirect interest or their total at least 25% in the equity capital or in voting rights in a customer that is a legal entity (s. 9 AML Act). Data and written documents obtained under the CDD procedure need to be kept for a period of five years following the termination of its business relationship with the customer.
Nominee identity information

84. The business of providing nominee shareholders is regulated under the AML Act (ss. 5(k) and 9(c)). The AML Act requires service providers who provide nominee services to perform customer due diligence measures at the moment of establishing a business relationship with a client. These measures include the identification of a customer and verification of his identification and conducting ongoing monitoring of the business relationship including ensuring that the information held on the customer is kept up-to-date (ss. 7,
9 and 10 AML Act). Service providers are also required to identify, using an AML-risk based approach, the beneficial owners of their customers. 19 Information on the identity of the customer must be kept for a minimum of five years from the date on which the business relationship ends (s. 19 AML Act). 85. Non-professional nominees are not regulated under Slovak AML laws. The Slovak Republic authorities have advised that such nominees are rare and that they have not been encountered in any instances. The materiality of this issue will be further examined in the course of the Slovak Republics Phase 2 review.
Conclusion
86. Full up-to-date identity information is available for shareholders/ members of all Slovak domestic companies under the commercial laws. This is supplemented by the Slovak AML/CFT laws. Foreign companies with a nexus to the Slovak Republic continue to be regulated by the laws of their jurisdiction of incorporation and are not expressly required to maintain or file identity and ownership information under Slovak laws. Under the tax law, certain companies are subject to an obligation to document changes in their ownership structure for transfer pricing purposes. While a number foreign companies that conduct business in the Slovak Republic will have this obligation, it does not apply to all relevant foreign companies (i.e. those effectively managed in the Slovak Republic).
Bearer shares (ToR A.1.2)

87. Joint stock companies may issue bearer shares but these bearer shares may only be issued as book-entry shares, meaning that ownership is not established through the possession of a share certificate, but instead evidenced via a record kept in a Central Depository established under Act No.566/2001 (s. 99(3)). The Central Depository is obliged to know the business name or name, identification number and registered office (for legal persons), and name, birth registration number and permanent residence (if a natural person) of every account holder (i.e. shareholder) (s. 105). The ownership and any transfer of bearer shares by any account holder must be recorded by the Central Depository. The above arrangement was specifically introduced by the Slovak Government in 1999 to facilitate greater transparency in
19. The term beneficial owner is defined as the natural person the benefit of whom a transaction is being carried out or who has a direct or indirect interest or their total at least 25 % in the equity capital or in voting rights in a customer that is a legal entity (s. 9 AML Act).

bearer shares. Shareholders were given until the end of 1999 to convert their shares to registered form, after which time any remaining joint stock companies with shares in bearer form were compulsorily dissolved and liquidated (s. 768b, CC). This law effectively immobilises all bearer shares in the Slovak Republic and ensures that ownership and identity information of bearer share owners is available.
Partnerships (ToR A.1.3)

88. The laws of the Slovak Republic allow for the creation of general partnerships (GPs) and limited partnerships (LPs). The Commercial Code governs both GPs and LPs. A GP arises when two or more persons carry on a business in common and share joint and several unlimited liabilities for the obligations of the partnership. Each partner is entitled to manage the business of the partnership (ss. 76 and 81). An LP is a partnership in which one or more partners bear limited liability up to their outstanding contributions (limited partners) and where one or more partners bear unlimited liability (general partners). 89. There are also European Economic Interest Groupings (EEIGs) (Council Regulation (EEC) No.2137/85 of 25 July 1985 on the European Economic Interest Grouping), a form of association between companies and other legal bodies, firms or individuals from different EU countries who operate together across national frontiers. EEIGs must be registered in the EU State in which it has its official address by filing the EEIG contract at the appropriate registry. In the Slovak Republic the appropriate registry is the Commercial Register. The contract must include the name, business name, legal form, permanent address or registered office, and the number and place of registration, if any, of each member of the grouping. Changes in these details must be advised to the Commercial Register within 30 days of the change happening (s. 5(5), Commercial Register Act). The regulations governing EEIGs apply across all EU member States and are not specific to the Slovak Republic. These ensure the availability of ownership information for the EEIGs. 90. The Commercial Code also contains provisions on the silent partnership contract (s. 673ff.). Under a silent partnership, the silent partner undertakes to provide a certain contribution to an entrepreneur and thus participate in the latters business, and the entrepreneur undertakes to pay a certain part of profits arising from the silent partners ownership interest in the entrepreneurs business results (s. 673(1)). This arrangement can be characterised as a contract, and like a contract, its existence is typically not subject to disclosure or registration requirements. Silent partnerships do not have the status of a legal person or business name and cannot therefore hold real estate or own assets. They do not carry on business and cannot be compared to a limited partnership. Therefore, these arrangements are clearly not under the scope of the Terms of Reference.
Information required to be provided to government authorities

91. Like companies, both general partnerships and limited partnerships are incorporated when entered into the Commercial Register of the competent register court (s. 62(1) CC). The competent court is the court of the district where the company has its seat or its place of business (s. 4(2) Commercial Registration Act). The application for an entry into the register must be submitted within 90 days from its establishment or its receipt of a trade licence. Foreign partnerships must register a branch with the Commercial Register before they can commence business in the Slovak Republic. (s. 2(3), 2(4), Commercial Registration Act). 92. Data to be filed by Slovak-incorporated general and limited partnerships upon registration includes the names, surnames, and residence address of all the individual partners, as well as the business name or name and seat of any legal person acting as a partner. Limited partnerships must also specify who is a general partner and who is a limited partner (s. 2(2)b Commercial Registration Act). Branches of foreign partnerships need to file, among others, their business name, address and the identity of the head of the partnership (s. 2(3), 2(4), Commercial Registration Act). 93. All partnerships (including branches of foreign partnerships) are also required to submit to the Registrar certain documents, including their articles of incorporation, incorporation deed or memorandum of association (s. 3(1) a and 3(2)b, Commercial Registration Act). The memorandum of association for Slovak-incorporated general and limited partnerships must include the following information (ss. 78 and 94, CC): business name and registered office of the GP/LP; identity of the partners, including the business name and registered office for legal persons, and the name and place of residence for natural persons; the scope of business; and in the case of limited partnerships information as to which partners are general partners and which are limited partners, and the amount of each limited partners pledged contribution. 94. Partnerships are also required to file each change to the registered data and the submitted documents (s. 3(1)b) and deposit the full text of the documents after each change is made. 95. Limited partnerships are required to register with the tax authority pursuant to the TAA (s. 31). Limited partnerships are considered taxable parties and as such they are subject to inspection by the tax administration on the completeness of the registration records and of the data concerning their

income, financial standing and other facts relevant for correct levying and recovery of taxes (s. 34 ITA). This registration requirement would also apply to partners of a general partnership and general partners of a limited partnership, provided that they are resident in the Slovak Republic. 96. General partnerships are tax transparent entities in the Slovak Republic. Therefore, each individual partner of a general partnership (whether formed under Slovak laws or foreign laws) that carries on a business or which is liable to income tax in the Slovak Republic must file a tax return with the Slovak tax authorities (s. 38 TAA). The same applies to the general partners of a limited partnership, who must file returns detailing their share of income from the limited partnership. The income attributable to the limited partners is taxed at the limited partnership level and limited partners need not submit individual returns in respect of such income.
Ownership and identity information required to be held by partnerships

97. There are no express obligations for partnerships to maintain ownership information, but since Slovak partnerships (both general and limited) have obligations to file any changes in the partners with the Commercial Register, they have an implicit obligation to maintain information on the identity of their partners.
Conclusion
98. Partnerships (both general and limited) are required to file identity and ownership information with the Commercial Register at the point of their incorporation and to register with the tax authorities (the identity of the partners need not be provided to the tax authority at the point of registration). Any changes in such data must be filed and the corresponding documentation deposited with the Commercial Register. This ensures the availability of identity and ownership information.
Trusts (ToR A.1.4)

99. The concept of a trust does not exist under Slovak legislation. The Slovak Republic is also not a party to the Hague Convention on the Law Applicable to Trusts and on their Recognition. 20 While the Slovak authorities have advised that the Slovak Republic recognises trusts established under foreign laws it is unclear in what way the laws of the Slovak Republic do this.
20.
www.hcch.net/index_en.php?act=conventions.text&cid=59.
100. Under Slovak law, there are no restrictions for a resident of the Slovak Republic to act as trustee, protector or administrator of a trust formed under foreign law. 101. The Slovak Republics legislation does not require registration or disclosure of information regarding settlors, trustees and beneficiaries of trusts to government authorities. Under the tax laws, the income of a foreign trust is not attributable to the trustee and only relevant trust beneficiaries (i.e. those liable to tax in the Slovak Republic) need to file tax returns in respect of their own trust income. 102. However, the Slovak Republics AML legislation, which is a transposition of the 3rd EU Money Laundering Directive, establishes an obligation regarding the identification of customers by obliged entities (see section on service providers above). 103. Although the list of obliged entities does not expressly include trustees, it includes lawyers and notaries providing their customers with legal services related to management or safekeeping of funds, securities or other property as well as other service providers of property management (s. 5(1) j(2) and s. 5(1)k). This would include lawyers and notaries acting as trustees of foreign trusts. The list of obliged entities also covers lawyers and notaries that are managers of corporations (the definition of which would include a foreign trust administered or having a trustee in the Slovak Republic). 21 It is through these provisions that the professional Slovak trustees of foreign trusts are subject to the Slovak AML regulations. 104. The AML Act requires obliged entities to perform customer due diligence measures at the moment of establishing a business relationship with a client. The customer due diligence measures include the identification of a customer and verification of his identification and conducting ongoing monitoring of the business relationship including ensuring that the information held on the customer is kept up-to-date (ss. 7, 9 and 10 AML Act). It is not clear whether customer identification in the context of trusts would always include identifying the trust settlors and beneficiaries. 105. Non-professional trustees of foreign trusts are not regulated under Slovak AML laws. The Slovak Republic authorities have advised that such trustees are rare and they have not been encountered in any instances. The materiality of this issue will be further examined in the course of the Slovak Republics Phase 2 review. 106. Regulated trustees of foreign trusts in the Slovak Republic are covered by the Slovak Republics AML regulations. They are required to maintain identity information regarding their customers but it is not clear whether such
21. See paragraph 80.

information in the context of trusts would include the identity of the trust settlors and beneficiaries. The Slovak authorities have advised that such foreign trusts are rare in the Slovak Republic.
Foundations (ToR A.1.5)

107. Foundations in the Slovak Republic are regulated under Act 34/2002 on Foundations (Foundations Act). Foundations are legal entities in the Slovak Republic and their governing structure comprises a manager, a supervisor (also known as inspector) and board of directors. They can be established by one or more founders (legal entities or individual persons) with a pool of assets amounting to at least EUR 6 638. 108. Foundations may only be charitable entities. The Foundations Act limits the objects of foundations formed in the Slovak Republic to public service purposes, defined to include promotion and protection of spiritual and cultural values, human rights, other humanitarian objectives, environment, health, protection of children and youth, development science, education, physical education and humanitarian aid. A foundation may not be set up for private purposes. A foundation cannot perform activities that may lead to gaining profits though they may organise charitable lotteries or cultural, educational, social or sporting events and they may lease real estate, provided that this leads to a more effective use of foundation assets and that the activity performed is consistent with the public purpose of the foundation (s. 29(1)). Funds donated or allocated to a foundation to fulfil its public benefit purpose cannot be distributed to the founders, board members, administrators and other persons involved in the foundations management, or to their families (s. 33(4)). An intermediary that receives funds from a foundation can use these funds only for the public service purpose for which the funds were provided. Natural or legal persons who fail to fulfil this obligation are required to immediately return the funds provided by the foundation (s. 33(1) and (2)). 109. Board members serve in a gratuitous capacity and are not allowed to receive remuneration for their services. The foundation board appoints the manager and inspector of the foundation. The manager manages the foundation and acts on its behalf on all matters, unless otherwise specified by the foundation charter. The inspector inspects all documents and records relating to the foundations activities and ensures that the foundation has conducted its activities in accordance the law and the foundation charter (ss. 26 and 27 Foundations Act). 110. A foundation is established by executing the foundation charter signed by all founders and registering with the Foundations Register, a body under the Ministry of Interior. The founders signatures must be authenticated by a notary.
111. Foreign foundations may operate in the Slovak Republic; they are subject to the same obligations that are applicable to Slovak foundations under the Foundations Act (ss. 40 and 41).
Information held by government authorities

112. The foundation charter must be submitted to the Foundations Register, and must include the following information (ss. 5 and 10 Foundations Act): name and address of the foundation; the public service purposes that the foundation will support; name (or company name), personal identification number (or company registration number) and address of all the founders; the value of endowment; the value of the subject property and the contribution that each founder puts into the endowment for the establishment of foundations; the period for which the foundation is established; the name, personal identification number and address of the foundation manager; and the number of members of the board and the length of their terms. 113. All foundations must publish and submit annual reports to the Ministry of Interior. Each annual report must contain the following information (ss. 35 and 38 Foundations Act): an overview of activities undertaken in the period, indicating relation to public benefit purpose foundations; the annual accounts, assessment of the basic data included therein, and an audit of annual accounts; a summary of earnings (income), classified according to sources and their origin; details of each donor whose donations exceed EUR 331 (this may be omitted if the donor chooses to remain anonymous); beneficiaries of foundation funds and information on how these funds were used; a breakdown of expenditure by type of activities;

any changes made to the foundation deed and the composition of the foundation bodies (foundation board, manager, inspector) that have occurred in the reporting period; remuneration of the manager of the foundation; and overview of the endowment funds.
Tax laws
114. Foundations that derive taxable income must register and file tax returns with the tax authority. Information that needs to be submitted does not include ownership information.
Anti-money laundering legislation

115. Financial institutions and professionals providing services to foundations are subject to the relevant provisions of the AML Act. As a consequence, they are obliged to conduct customer due diligence when foundations are their clients, as detailed above. Where a foundation is a customer of a financial institution or professional service provider, these entities are obliged to obtain the foundations business name, address of registered office, identification number and the identity of a natural person who is authorised to act on behalf of the foundation. An obliged entity is not required to identify the founders. 116. Additionally, foundations are corporations under the AML Act and therefore subject to an obligation to maintain a list of its beneficiaries for at least five years (ss. 19 and 25(2)). Where future beneficiaries of the foundation have not yet been determined, it is sufficient to identify only the category of persons for whose benefit the foundation was established or for whose benefit it operates.
Conclusion
117. In conclusion, the Slovak Republics legal and regulatory framework, in particular the Foundations Act, ensures the availability of information on the founders, the members of the foundations board, the directors and any other beneficiaries.
Enforcement provisions to ensure availability of information (ToR A.1.6)

118. The existence of appropriate penalties for non-compliance with key obligations is an important tool for jurisdictions to effectively enforce the obligations to retain identity and ownership information. Non-compliance affects whether the information is available to the Slovak Republic to respond to a request for information by its EOI partners. 119. In the Slovak Republic, most obligations to retain relevant information are supported by enforcement provisions to address the risk of non-compliance. The relevant enforcement provisions are set out below: a legal or natural person who fails to register a company or a partnership, to file changes in the registered data or to submit the prescribed documents within the deadline stipulated by the law is subject to a fine of up to EUR 3 310 EUR. The same fine is applicable to persons who file false data or submit false documents whose content does not correspond to reality (s. 11 Commercial Registration Act); a taxable party that does not comply with its registration or reporting duty under s. 31 of the ITA, or a registration or reporting duty under a special act, is subject to a fine of not less than EUR 66 and not more than EUR 3 319) (s. 35(7) TAA); an obliged entity which fail to conduct appropriate customer due diligence on its customers is liable to a fine of up to EUR 165 969 (s. 33, AML Act); a foundation that does not comply with any provision of the Foundations Act is liable to have its registration revoked and its assets forcibly liquidated (s.15 Foundations Act); a corporation (including a foundation) that does not maintain a list of its beneficial owners pursuant to the AML Act is liable to a fine of up to EUR 66 387 (s. 33, AML Act); under the Commercial Code the transfer of a registered share of a joint stock company becomes effective only after the change of entry in the list of shareholders. The company is obliged to register a change in the list of shareholders as soon as the change in the shareholders person is proven. The company is liable for any damage arising from a breach of this obligation (s. 156(7)); a central depository that does not properly maintain the identification records of all the shares registered with it (including owners of bearer shares), or which is in breach of any other of its obligations under Act No.566/2001is liable to a fine of up to EUR 663 878. (s. 144); and

a taxable party that fails to file a tax return is liable to a fine of up to EUR 49 790 (s35 TAA). 120. There are no direct financial sanctions for private LLCs, joint stock companies and co-operatives that fail to maintain a register of members/ shareholders. However, they must submit any changes in their memorandum of association, or establishment deed to the Commercial Register. This would include any changes in their members/shareholders since the memorandum of association and establishment deeds must contain the identity of all the shareholders/members of the private LLC, Joint Stock Company and co-operative. Sanctions for not submitting such information are mentioned above.
Conclusion
121. The Slovak Republics commercial and AML legislation include enforcement provisions that ensure availability of relevant ownership information. The exception to this is with respect to registers of shareholders to be kept by private LLCs, joint stock companies and co-operatives. The effectiveness of the enforcement provisions which are in place in the Slovak Republic is an issue of practice and will be considered as part of its Phase 2 review.
Determination and factors underlying recommendations
Phase 1 determination The element is in place, but certain aspects of the legal implementation of the element need improvement. Factors underlying recommendations Not all companies incorporated outside of the Slovak Republic but having their place of effective management (and therefore resident) therein are subject to clear requirements to maintain identity information concerning their owners. The availability of such information will generally depend on the law of the jurisdiction in which the company is incorporated and so may not be available in all cases. Recommendations Ownership and identity information should be available for all foreign companies having a sufficient nexus with the Slovak Republic.
Phase 1 determination The element is in place, but certain aspects of the legal implementation of the element need improvement. Factors underlying recommendations Persons in the Slovak Republic who act as professional trustees for foreign trusts are not obliged to identity the settlors and beneficiaries of such trusts. Recommendations Persons in the Slovak Republic who act as professional trustees for foreign trusts should be required to maintain identity information on the settlors and beneficiaries of the foreign trusts for which they act.
A.2. Accounting records

Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements.
General requirements (ToR A.2.1), Underlying documentation (ToR A.2.2) and 5-year retention standard (ToR A.2.3) Accounting Act
122. The accounting record keeping obligations of accounting entities in the Slovak Republic are primarily governed by Act No.431/2002 Coll. on Accounting (Accounting Act). The definition of accounting entities includes (s. 1): legal persons having their registered offices in the Slovak Republic this comprises all Slovak Republic incorporated companies, including private LLCs, joint stock companies, co-operatives general partnerships, limited partnerships and foundations; and non-resident persons 22 doing business or conducting other activities in the Slovak Republic under separate regulations this comprises foreign incorporated companies that carry on a business in the Slovak Republic through a branch or an enterprise and foundations. 123. All accounting entities must maintain accounting records evidencing (ss. 2 and 7 Accounting Act and s. 34 Foundations Act.): stock of and changes in assets and liabilities; all income and expenses;
22. A non-resident person is defined under the Commercial Code as a legal person that does not have a legal seat (i.e. registered office) in the Slovak Republic.

all cash receipts and expenditures; and profit or loss of the accounting entity. 124. Such accounting records must be kept correctly, completely, verifiably and comprehensibly, so that the accounting entitys financial statements present a true and fair view of its financial position (s. 8). 125. All transactions must be substantiated with accounting documents, which are defined under the Accounting Act as verifiable accounting records containing: the word and numeric designation of the accounting document; the content of the accounting transaction and identification of parties thereto; the monetary sum or price per measuring unit and the valuation of the amount; the date of issue of the accounting document; the accounting transaction date if not the same as the date of issue; a signature record of the person responsible for the transaction by the accounting entity; and a signature record of the person responsible for the entry 126. The Slovak authorities have advised that the above accounting records refer to underlying documents such as invoices and contracts (s. 10). 127. The Accounting Act requires all accounting entities to maintain all accounting records for at least five years from the date they relate to (s. 35). 128. An accounting entity that does not maintain underlying documents pertaining to its accounting records, or which does not maintain its accounts such that its financial statements present a true and fair view of its financial position is liable to a fine of up to 3% of its total assets. Breaches of other obligations stated above attract a fine of up to 1% of an accounting entitys total assets (s. 38).
Income Tax Act

129. The accounting record keeping requirements under the Accounting Act are supplemented by the requirements under the Income Tax Act. Legal and natural persons who derive income from business activities, leasing real estate or other independent gainful activities (i.e. non-employment income) are obliged to maintain records on their income, tax expenses, depreciated tangible and intangible assets, inventories, receivables and liabilities (ss. 6(10), 6(11)
and 6(14)). Accounting records and underlying documents (to the same extent as the requirements under the Accounting Act) need to be kept until the right to assess the tax or to proceed to a subsequent tax assessment is time-barred, i.e. for a minimum of five years from the last day of the year, in which the tax return or the tax notice should have been filed (s6(12), Income Tax Act). This is an express requirement under the Income Tax Act. If such persons are not liable to VAT in the Slovak Republic, they may opt for a simplified record keeping regime and maintain under the Income Tax Act only records on their income, inventories and receivables (though they are still subject to the full accounting requirements of the Accounting Act). 130. The tax administration may also issue decisions requiring a certain taxpayer to keep additional records necessary for the correct determination of taxes. The decision, which cannot be appealed by the taxpayer, must specify in detail the data to be recorded, their classification and format (s. 37 TAA). Taxpayers entitled to deduct expenses from their taxable income are specifically required to keep records of their income and records of movable and immovable property (s. 37(4)).
Accounting records for trusts

131. The accounting record keeping obligations of the Accounting Act and the Income Tax Act do not apply to resident professionals acting as administrators or trustees of foreign trusts. The Slovak Republics authorities indicated that the income derived through a foreign trust is not attributable to the trustee, but to the trust beneficiaries, and thus the trustee is not responsible for keeping accounting records in relation to such income. This obligation falls on the beneficiaries, who may not be in the Slovak Republic. For beneficiaries who are in the Slovak Republic, the record keeping obligations spelt out in the Accounting Act and the Income Tax Act may be applicable depending on the beneficiarys circumstances (i.e. whether the beneficiary is a taxpayer or an accounting entity).
Accounting records to be kept by service providers

132. Service providers, including Slovak trustees of foreign trusts, are obliged under the AML Act to keep records of all the transactions they conduct for their customers (s. 19). The scope of records to be kept is very broad and comprises all data and written documents about the transactions. This would appear to include documents underlying the transactions as well. This may however not include sufficient information to determine the financial position or assets/liabilities of the foreign trust. Service providers are required to maintain the above records for a minimum of five years from the date on which the transaction takes place (s. 19).
Conclusion
133. All relevant entities in the Slovak Republic are subject to legal requirements under the Accounting Act to maintain comprehensive accounting records for a minimum of five years. These records include underlying documents and details of all relevant transactions. The requirements under the Accounting Act are supplemented by obligations imposed by the AML Act and the Income Tax Act. There is however a narrow gap relating to the availability of accounting records that reflect the financial position and assets/liabilities of a foreign trust of which there is a Slovak resident acting as a trustee or administrator.
Phase 1 determination The element is in place. Factors underlying recommendations Slovak trustees of foreign trusts are not required to keep accounting records that fully reflect the financial position and assets/liabilities of the foreign trust. Recommendations The Slovak Republic should ensure that such accounting records are maintained for a minimum of five years for any foreign trusts which have Slovak-resident administrators or trustees.
A.3. Banking information

Banking information should be available for all account-holders.
Record-keeping requirements (ToR A.3.1)

134. All financial institutions (including banks and branches of foreign banks) in the Slovak Republic are subject to the Slovak Republics AML Act (ss. 5 and 24 AML Act). Financial institutions are prohibited from establishing business relationships with or carrying out transactions for anonymous customers, and must perform customer due diligence measures at the moment of establishing a business relationship with all clients, unless a client itself is an AML-regulated entity with AML obligations equivalent to those laid down in the AML Act, such as another credit or financial institution (s. 10). Financial institutions are also prohibited from carrying on anonymous transactions (s. 89 Act No.483/2001, as amended).
135. The customer due diligence measures to be undertaken by financial institutions include the identification of a customer and verification of his identification, and ongoing monitoring of the business relationship including ensuring that the information held on the customer is kept up-to-date. In the context of a customer that is a natural person, the financial institution must obtain his name, surname, birth registration number or date of birth, address, nationality, type and number of his identification document. Where the customer is a legal entity, the financial institution must obtain its business name, address of registered office, identification number and the identity of a natural person who is authorised to act on behalf of the legal entity (s. 7 AML Act). Banks are also required to identify, on an AML-risk based approach, the beneficial owners of their customers (s. 10 AML Act). 23 Banks may rely on a third party to conduct the appropriate customer due diligence measures (s. 11). If the third parties do not conduct the appropriate customer due diligence, banks cannot rely on that and must conduct the customer due diligence themselves. Information on the identity of the customer must be kept for a minimum of five years from the date on which the business relationship ends 136. Under the AML Act, banks are required to keep all data and written documents about all their transactions for five years after a transaction takes place (s. 19). Under Act No.483/2001 on Banks, banks are required to keep documents on conducted operations for at least five years after a transaction or contract is conducted (s. 42(1)). These provisions are very broadly drafted and result in banks maintaining full transaction records for all customers. 137. The AML Act imposes penalties on banks that fail to comply with the customer due diligence and record keeping requirements. Banks that fail to conduct appropriate customer due diligence are liable to a fine of up to EUR 165 969, while banks that do not maintain appropriate records of customer identity and transaction information for the stated retention period are liable to a fine of up to EUR 99 581 (s. 33).
Phase 1 determination The element is in place.
23.
The term beneficial owner is defined as the natural person the benefit of whom a transaction is being carried out or who has a direct or indirect interest or their total at least 25 % in the equity capital or in voting rights in a customer that is a legal entity (s. 9 AML Act).
COMPLIANCE WITH THE STANDARDS: ACCESS TO INFORMATION 47
B. Access to information
Overview
138. A variety of information may be needed in respect of the administration and enforcement of relevant tax laws and jurisdictions should have the authority to access all such information. This includes information held by banks and other financial institutions as well as information concerning the ownership of companies or the identity of interest holders in other persons or entities. This section of the report examines whether the Slovak Republics legal and regulatory framework gives to its competent authority access powers that cover all relevant persons and information, and whether the rights and safeguards that are in place would be compatible with effective exchange of information. 139. The Slovak Republic competent authority is the Tax Directorate within the Ministry of Finance. The competent authority, through the tax administration, has broad powers to obtain relevant information from any person who holds the information. In most cases, this power is exercised by way of on-site and off-site inspections, where non-compliance can be sanctioned with significant penalties. The competent authority has the power to enter premises, inspect relevant documents and take copies thereof. Third parties including government agencies, notaries and financial institutions are under an obligation to submit to the tax authority all data that may be relevant for tax purposes. 140. These powers may be exercised to obtain all information relevant for the administration of taxes, including foreign taxes. However, there may be a very narrow set of circumstances in which the application of these powers for exchange of information purposes is unclear and it is recommended that the Slovak Republic clarify its legislation to put the matter beyond doubt. 141. Taxpayers and third parties need not be notified when an inspection will be carried at their premises.
48 COMPLIANCE WITH THE STANDARDS: ACCESS TO INFORMATION

142. Existing bank secrecy provisions in Slovak law are overridden when information is sought by the tax authority acting within its competence. An exception to bank secrecy also applies when a foreign competent authority makes an EOI request under an international treaty ratified by the Slovak Republic, subject to reciprocity. The scope of professional privilege is broad and goes beyond the international standard.
B.1. Competent authoritys ability to obtain and provide information

Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information).
Ownership and identity information (ToR B.1.1) and Accounting records (ToR B.1.2)
143. Under the Tax Administration Act, the Slovak tax administration has broad powers to obtain a wide variety of information for Slovak tax administration purposes. Local tax offices, municipalities and customs offices are all considered part of the tax administration and enjoy the same powers with reference to the taxes and duties that are within their competence (s. 1a(b) TAA). They can collect information from the taxpayer and other persons, 24 collect documents and carry out on-site inspections. 144. In particular, the tax administration can conduct on-site inspection of entities, collect information and tax related documents and make copies thereof (s. 14 TAA). For the purposes of such on-site inspections, tax officials are entitled to unlimited access to any business buildings, premises or places, including means of transportation, accounting documents, records and information stored on data carriers (s. 14(2)). The inspected persons are under an obligation to co-operate with the tax officials throughout the inspection, by giving them all necessary assistance and making available all requested documents and items (s. 14(5) and (6)).
24. Under the TAA, a taxable party means a party, the income, property or business of which are liable to tax (s. 5(2)). The term taxpayer means a party, which transfers to the tax administration any tax collected or withheld from the taxable party, and which is liable for the payment of such a tax (s. 5(3)). In essence, the taxable party is the person ultimately subject to taxation (the tax debtor), whereas the taxpayer is the person who pays a tax, including on behalf of someone else. This means that under Slovak tax law a bank withholding taxes on the incomes earned by its clients is the taxpayer in respect of those incomes, whilst the clients are the taxable parties.
145. The tax administration can also obtain information from third parties. Courts, other public authorities, local administration authorities and notaries are under a specific obligation to disclose to the tax authorities all relevant information for the levying and recovery of taxes (s. 32(1) TAA). Public inspection authorities are required to disclose to the tax administration the findings of their inspections, if such findings suggest that there is or there may be a breach of tax liability (s. 31(2)). Persons holding documents or other items, which may be used as evidence at the administration of taxes, are required to surrender or lend such documents or items upon request of the administration (s. 32(4)). Under the Banking Act, banks or branch offices of a foreign bank are obliged to notify in writing to the competent tax office details concerning their clients that are businesses; in particular, they are required to disclose the number of each current or deposit account opened and closed by a business that is or has been its client within 10 days of the end of the calendar month in which the account was opened or closed (s. 90, Banking Act). 146. Finally, the tax administration is entitled to check the completeness of the records and registration data of all taxable parties and retrieve any data concerning their income, financial standing and other factors relevant for the correct levying and recovery of taxes. Data may be retrieved also without direct collaboration of the taxable party (s. 34 TAA). When performing these checks, tax officials enjoy the same powers they are entitled to during an onsite inspection. 147. The International Assistance and Cooperation in Administration of Taxes Act (76/2007) (EOI Act) lays out the conditions according to which the competent authority of the Slovak Republic provides international assistance and co-operation in the administration of taxes, including exchange of information. Under the EOI Act, Slovak authorities can respond to an EOI request after the competent authority of the EOI partner declares in its request that it exhausted all data sources that are available to it without compromising the tax matter on hand (s. 6(1) and 12(1)b). The scope of cooperation is wide and covers all the taxes that may be covered by any particular agreement (s. 3). 148. Under the Banking Act, protected bank information may be disclosed to a tax authority only if such request is made in writing and contains information which enables a bank or branch office of a foreign bank to identify the matter in question, in particular a precise identification of the person on which data is requested, and the extent of requested data (s. 91(5)). The Slovak authorities have indicated that the precise identification requirement provided for the Banking Act is satisfied every time an EOI request contains sufficient elements which allow the identification of the person subject of the request, it not being necessary to include his name and/or address.
Use of information gathering measures absent domestic tax interest (ToR B.1.3)
149. The concept of domestic tax interest describes a situation where a contracting party can only provide information to another contracting party if it has an interest in the requested information for its own tax purposes. 150. Under the EOI Act, the competent authority of the Slovak Republic may provide the competent authority of a treaty counterparty (i.e. DTCs and TIEAs) with information which may be ascertained, collected, used or disclosed pursuant to the Slovak Republics laws (s. 5). 151. Upon the receipt of a request, the competent authority (which is the Tax Directorate) will determine the appropriate government authority (in most cases the tax administration) that should provide the information and contact that authority for the information. The relevant government authority will then obtain and provide the requested information to the extent possible under domestic law. The Slovak tax administration does not distinguish whether a query from the Tax Directorate originates from the Slovak Republic or a foreign jurisdiction. This means that the Slovak Republic does not require a domestic interest before exercising its information gathering powers in response to an EOI request. Relevant information obtained by the tax administration is passed on to the Tax Directorate, which transmits it to the requesting jurisdiction. 152. The interaction between the EOI Act and TAA Act (which provides the tax administration with the power to obtain information) is unclear, however, in relation to a narrow range of cases where a person has no nexus with the Slovak Republic for tax purposes. The information gathering powers vested in the Slovak tax authority are linked to the administration of tax and tax proceedings. Accordingly, if a person is outside the scope of Slovak tax (for example, if he does not derive taxable income), power to obtain information directly from that person is uncertain because there is no clear provision in the law that could compel him to provide the information requested. Nevertheless, this is not a material gap because the Slovak tax system has a wide coverage and cases where a person falls outside its scope are rare. Moreover, the Slovak authorities interpret the law as allowing them to use their powers to obtain information for the purposes of tax proceedings in another country from any person in the Slovak Republic regardless of nexus and note that there has never been any issue in this regard in practice. 153. This is an interpretation, however, and the matter is not expressly dealt with in the legislation. This lack of clarity could create situations where the Slovak tax administrations ability to compel the production of information for EOI purposes might be subject to challenge. It is therefore recommended that the Slovak Republic clarifies its legislation to put beyond any doubt that the tax administrations information gathering powers can be exercised to meet all EOI requests.
Enforcement provisions to compel production and access to information (ToR B.1.4)

154. If necessary to verify certain facts that are relevant for tax purposes, tax officials can seize goods and property (s. 14a). Equally, if strictly necessary to ensure that an inspection reaches its purpose, the tax administration may issue an injunction obliging the taxable party to take action, refrain from an action or tolerate an action (s. 15a). No appeal can be filed against the decision ordering an injunction (s. 15a(3)). With regard to criminal tax matters, Slovak tax authorities are generally obliged to report suspicions of criminal tax offences to the competent criminal authority and provide it with all information and proof gained from the on-site inspection, tax audit or tax administration. Following this, the criminal authority will commence the criminal proceedings and proceed with the investigation of the taxable person. Criminal authorities may ask tax authorities to perform specific actions, such as obtaining testimony of witnesses, conducting an on-site inspection, tax audit, and providing information about previous tax returns filed by the taxable person. 155. Taxpayers or third parties that fail to comply with their obligations under the TAA (including not providing the necessary information to the Slovak tax authority) are liable to a fine of up to EUR 33 190 (s. 35(15)). In cases where an offence continues to be committed after the initial fine, a fine of up to EUR 66 380 can be imposed repeatedly. 156. In addition to the fine inflicted under the TAA, banks failing to comply with their tax reporting and co-operation obligations are subject to the fine imposed by the Banking Act for breach of the obligations specified in binding regulations. Such a fine is imposed by the National Bank of Slovakia and ranges between EUR 3 319 and EUR 331 939, and in case of a recurrent or serious default, it may be up to EUR 663 878 (s. 50(1)d Banking Act).
Secrecy provisions (ToR B.1.5) Financial institutions

157. Confidentiality of bank information is protected under section 91 of the Banking Act and covers all information and documents on the matters relating to the banks clients that are not publicly available, especially information on deals, account and deposit balances. Information and documents on matters covered by bank secrecy may be disclosed by a bank or branch office of a foreign bank or to a third person only subject to prior written consent of the client concerned. 158. However, no written consent of the client is necessary when information is requested in writing by a tax authority, a customs authority or a

municipality when acting in their role of tax administrators for the purposes of tax or customs proceedings to which the client of the bank or branch of foreign bank is a party (s. 91(4)c). This exception to bank secrecy allows for the provision of bank information concerning not only taxpayers, but also third parties as defined by the TAA. That includes witnesses, persons holding deeds and other items needed in the tax proceedings, appraisers, auditors and interpreters, sureties, debtors and payers involved in security and enforcement proceedings, bankrupts trustees, assistant administrators, deputy administrators or settlement administrators, government authorities and municipalities and other persons obligated to provide concurrence in tax proceedings within the scope and in the manner stipulated by the Act. 159. In addition, the Banking Act expressly provides for an exception to bank secrecy for information requested in writing by a competent state authority for the purposes of discharging obligations arising from an international treaty binding upon the Slovak Republic, where the discharge of obligations according to this treaty may not be declined on account of bank secrecy (s. 91(4)j). The Slovak authorities have confirmed that this provision must be interpreted as allowing access to, and international exchange of, protected bank information in respect of all tax treaties concluded by the Slovak Republic, subject to reciprocity.
Professional privileges
160. Under the TAA, it is mandatory to disclose to the tax administration documents or other items which may be needed for the administration of taxes. Persons holding these documents are required to surrender or lend such documents or items upon request of the administration (s. 32(4)). Pursuant to the EOI Act, however, a request for information can be refused if the supply of information would lead to a violation of the obligation to maintain secrecy pursuant to specific laws (s. 12(1)(c)). 161. Pursuant to the Act on Auditors, an auditor and an audit firm are required to maintain the confidentiality of all information that they have obtained in connection with the execution of an audit (s. 30(1)). Auditors continue to be subject to a confidentiality duty also after having completed an audit or having been deleted from the relevant register. The confidentiality obligation, however, does not apply when disclosure is compulsory under a Slovak law (s. 30(7)). It therefore does not compromise the effective exchange of information. 162. Under the Act on Tax Advisors (78/1992), tax advisors must keep secret all facts with which became acquainted in relation with the provision of tax consultancy. The obligation to maintain secrecy is lifted only in
instances where disclosure is necessary to foil and notify commitment of a crime, and does not include disclosure for tax or EOI purposes (s. 18). 163. The confidentiality of information shared by a client with his lawyer is protected under Act No.586/2003 (Act on Attorneys). Under the Act on Attorneys, lawyers (both legal counsellors and attorneys) are obliged not to reveal any information learnt in connection with the practice of law 25 (Art. 23(1)). The privilege is not limited to giving legal advice or representation in legal matters. This is a broad scope of information that can go beyond the international standard. The Act on Attorneys provides some exemptions to legal professional privilege; these include disclosure of information in accordance with the AML Law and the Act on the protection of the classified (restricted) information (Act No. 241/2001, as amended). The duty of confidentiality is also lifted where lawful disclosure would prevent a crime (Art. 23(9)). There are no exceptions to the broad legal professional privilege pertaining to disclosure for tax purposes. Thus, if a lawyer acts as a nominee shareholder, trustee, tax advisor or under a power of attorney to represent a company in its business affairs, the lawyer is protected by professional secrecy and can decline to provide information to the tax administration.
Phase 1 determination The element is in place, but certain aspects of the legal implementation of the element need improvement. Factors underlying recommendations The power of the Slovak authorities to obtain information for EOI purposes is unclear in a narrow range of cases where a person has no nexus with the Slovak Republic for tax purposes, as the interaction between the EOI Act and TAA Act is unclear. Recommendations It is recommended that the Slovak Republic clarifies its legislation to put beyond doubt that the tax administrations information gathering powers can be exercised to meet all EOI requests.
25.
Practice of law is defined as representation of clients before courts of law, governmental authorities and other entities, acting for and defending individuals in criminal proceedings, legal consultancy, writing instruments about legal acts, making legal analyses, administration of clients property and other forms of legal advice, assistance and legal services, if provided continuously and in return for a fee. (s. 1(2), Act on Attorneys).

Phase 1 determination The element is in place, but certain aspects of the legal implementation of the element need improvement. Factors underlying recommendations Professional privilege is broadly defined under Slovak domestic laws and there are no express exceptions in the case of requests made under an EOI agreement. Recommendations The Slovak Republic should ensure that domestic provisions on professional privileges allow exchange of information in line with the standard.
B.2. Notification requirements and rights and safeguards

The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information.
Not unduly prevent or delay exchange of information (ToR B.2.1)

164. The Terms of Reference provides that rights and safeguards should not unduly prevent or delay effective exchange of information. For instance, notification rules should permit exceptions from prior notification (e.g. in cases in which the information request is of a very urgent nature or the notification is likely to undermine the chance of success of the investigation conducted by the requesting jurisdiction). 165. The EOI Act does not require the tax authorities to notify taxpayers or third parties of an EOI request, or when the tax authority collects information from a third party to fulfil an EOI request. 166. As explained in Section B.1, the Slovak Republics tax authorities can approach taxpayers or other persons holding relevant information for inspection during normal business hours (s. 14 TAA). There is no requirement for the tax authorities to give prior notice to taxpayers before commencing the inspection or investigation. 167. Under the TAA, parties to a tax proceeding 26 may appeal against any decision taken by the tax administration, including the collection of information. The parties to a tax proceeding are the taxpayer and any other third parties as the tax administration may permit. Once a decision has been made by a branch of the tax administration, any further appeals in response to any decisions must be made to a higher authority. The order of authorities
26. Defined as any proceeding involving the rights and duties of taxpayers.
to which appeals are to be made is as follows: local tax administration, central tax administration, Ministry of Finance, Minister of Finance. A decision made by the Minister of Finance is final and may not be reviewed. (ss 6, 46, 47, 48, 51 and 52, TAA). During the appeal process, the tax proceeding is deferred (s. 46(9)).The TAA does not prescribe any timeline for the resolution of appeals. The impact in practice of these appeal rights on international exchange of information in tax matters will be examined in the Phase 2 review of the Slovak Republic.
COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION 57
C. Exchanging information
Overview
168. Jurisdictions generally cannot exchange information for tax purposes unless they have a legal basis or mechanism for doing so. In the Slovak Republic, the legal authority to exchange information is derived from its EOI agreements as well as from domestic law. This section examines whether the Slovak Republic has a network of information exchange that would allow it to achieve effective EOI in practice. 169. Pursuant to Act 76/2007 on International Assistance and Cooperation in Administration of Taxes (EOI Act), the Ministry of Finance is the Slovak Republics competent authority for international exchange of information in tax matters. The Ministry may designate the tax or customs authorities to be competent authorities. The Slovak Republic also shares information with other jurisdictions pursuant to the EU Mutual Assistance Directive 77/799/ EC, the EU Savings Directive, Council Regulation No. 904/2010 on administrative cooperation and combating fraud in the field of value added tax and Council Regulation (EC) No. 2073/2004 on administrative cooperation in the field of excise duties. 170. The Slovak Republic has signed 64 DTCs, 62 of which are in force as of 31 December 2011 (see Annex 2). 27 While the Slovak Republic has to date not signed any TIEAs, there are no legal restrictions to the Slovak Republic doing so. Indeed, the Slovak Republic authorities have advised that it is in the process of negotiating TIEAs with about 20 jurisdictions. 171. The Slovak Republics network of EOI agreements covers most of its major trading partners and other major OECD/G20 jurisdictions. 172. Out of the 64 signed DTCs, two DTC (with Vietnam and Georgia) contains the full text of Article 26, expressly obliging the Slovak Republic
27. There is also a Protocol to the Switzerland-Slovak Republic DTC which is not yet in force.
58 COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION

to exchange information according to the international standard and 55 DTCs allow the Slovak Republic to exchange information according to the international standard. Only seven DTCs are not completely in line with the international standard. The Slovak Republics DTCs with Austria, Brazil, Germany, the Netherlands and Sri Lanka do not meet the standard in terms of the scope of information that may be exchanged. 28 The Slovak Republics DTC with Switzerland (including the 2010 Protocol) contains interpretative provisions that are unduly restrictive and inconsistent with the standard. The Slovak Republics DTC with Chinese Taipei does not allow for the exchange of taxpayer-specific information because it is not regulated by the Slovak Republic Constitution, and as such does not override the other domestic laws relating to confidentiality. 29 173. All of the Slovak Republics EOI agreements contain confidentiality provisions to ensure that the information exchanged will be disclosed only to authorised persons. While the articles in these EOI agreements might vary slightly in wording, these provisions generally contain all of the essential aspects of Article 26(2) of the OECD Model Tax Convention. 174. Most 30 of the Slovak Republics EOI agreements ensure that the contracting parties are not obliged to provide information which would disclose trade, business, industrial, commercial or professional secrets or information which is the subject of legal professional privilege or to make disclosures which would be contrary to public policy. As noted in Part B of this report, the scope of information subject to legal professional privilege in the Slovak Republic is wide and may potentially go beyond the international standard. 175. There are no legal restrictions on the ability of the Slovak Republics competent authority to respond to requests within 90 days of receipt by providing the information requested or by providing an update on the status of the request.
C.1. Exchange of information mechanisms

Exchange of information mechanisms should allow for effective exchange of information.
176. The EOI agreements signed by the Slovak Republic are regulated by the Constitution of the Slovak Republic. Under the Constitution, the execution of international agreements that directly establish rights or obligations of natural
28. 29. 30. Exchange of information to the standard is however possible with Austria, Germany and the Netherlands under the EU Mutual Assistance Directive 77/799/ EC. Act on Personal Data Protection, or Act on Banks, etc. The exception is the DTC with Sri Lanka.
or legal persons does not require any special law, and the provisions of these international agreements override the domestic laws of the Slovak Republic (Art.7(4)). Each EOI agreement that is signed is ratified according to the following steps: approval by national Parliament; ratification by President of the Slovak Republic; and exchange of notes on ratification or exchange of notes on completion of domestic approval with the relevant EOI partner. 177. It is also possible for the Slovak Republic to sign DTCs that are not regulated under the Constitution. Under the Income Tax Act, the Slovak government can conclude agreements regulating taxation and related legal relations in respect of dependent territories entitled to conclude international relations (Art. 1(2)). Such agreements are not ratified by the national Parliament or the President, but rather, are simply given effect through the Income Tax Act. They take precedence over the Income Tax Act itself, but not over the other laws in the Slovak Republic, including those governing confidentiality of information 31. Hence, the exchange of information under such treaties is limited to non-taxpayer specific information. So far, only one agreement 32 has been concluded under Article 1(2) of the ITA. 178. The Slovak Republic has signed 64 Double Tax Conventions (DTCs), 62 of which are in force. Whilst the Slovak Republic has not signed any TIEAs yet, there are no legal restrictions on it doing so and the authorities reported that negotiations to conclude TIEAs are currently ongoing with around 20 jurisdictions.
Foreseeably relevant standard (ToR C.1.1)

179. The international standard for exchange of information envisages information exchange on request to the widest possible extent, but does not allow speculative requests for information that have no apparent nexus to an open inquiry or investigation. The balance between these two competing considerations is captured in the standard of foreseeable relevance which is included in Article 26(1) of the OECD Model Tax Convention: The competent authorities of the Contracting States shall exchange such information as is foreseeably relevant for carrying out the provisions of this Convention or to the administration or enforcement of the domestic laws concerning taxes of every kind and description imposed on behalf of the Contracting States, or of their
31. 32. Examples are the Bank Act and the Act on Personal Data Protection. Chinese Taipei.

political subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Articles 1 and 2. 180. Most of the Slovak Republics DTCs provide for the exchange of information that is foreseeably relevant or necessary to the administration and enforcement of the domestic laws of the contracting parties concerning taxes covered in the DTCs. This scope is set out in EOI Article in the relevant DTCs and is consistent with the international standard. 181. The Slovak Republics DTCs with India, the Netherlands and Sri Lanka provide for EOI for the purposes of enforcing the provisions of the DTC and for preventing tax avoidance or evasion. This scope has been interpreted by the Slovak Republic as being wide enough to allow for EOI up to the foreseeably relevant standard. 182. Four DTCs do not meet the foreseeably relevant standard. The Switzerland-Slovak Republic DTC (including the provisions of the 2010 Protocol) includes the full wording of Article 26 of the OECD Model Tax Convention, including paragraphs 4 and 5, supplemented by additional rules listing the types of information to be provided by the requesting jurisdictions in its request for information. It includes provisions requiring the requesting party to provide the name and address of the holder of information and to identify the name and address of the person under examination when making an exchange of information request. These requirements are unduly restrictive and inconsistent with the standard (see Article 5(5) of the OECD Model TIEA and its Commentary). However, Switzerland is taking steps to bring the agreement into line with the standard. 183. The Slovak Republics DTCs with Austria, Brazil and Germany do not meet the international standard as they only permit EOI for the purposes of enforcing the provisions of the DTC. However, as Austria and Germany are EU members subject to the Council Directive 77/799/EEC, which allows for exchange of information in line with the foreseeably relevant standard, the limited wording in these two DTCs is not a concern in practice.
In respect of all persons (ToR C.1.2)

184. For exchange of information to be effective it is necessary that a jurisdictions obligation to provide information is not restricted by the residence or nationality of the person to whom the information relates or by the residence or nationality of the person in possession or control of the information requested. For this reason the international standard envisages that EOI mechanisms provide for EOI in respect of all persons.
185. All of the Slovak Republics DTCs provide for EOI in respect of all persons.
Exchange of information held by financial institutions, nominees, agents and ownership and identity information (ToR C.1.3)
186. Jurisdictions cannot engage in effective exchange of information if they cannot exchange information held by financial institutions, nominees or persons acting in an agency or a fiduciary capacity. The international standard stipulates that bank secrecy cannot form the basis for declining a request to provide information and that a request for information cannot be declined solely because the information is held by nominees or persons acting in an agency or fiduciary capacity or because the information relates to an ownership interest. This is spelt out in Article 26(5) of the OECD Model Tax Convention. 187. Out of the Slovak Republics 64 DTCs: the DTC with the Netherlands contains a protocol specifically prohibiting the exchange of bank information and information on insurance companies. 33 As such, this DTC is not to the international standard. However, as noted above, the Netherlands is subject to the Council Directive 77/799/EEC, which allows for exchange of all types of information in the absence of domestic law impediments. As both the Netherlands and the Slovak Republic do not have domestic law impediments to effective EOI, the wording in the DTC is not a concern in practice; the DTCs with Georgia, Vietnam and Switzerland (including the 2010 Protocol) contain Article 26(5) of the OECD Model Tax Convention spelling out the obligations of the contracting parties to exchange information held by financial institutions, nominees, agents and ownership and identity information; and the Slovak Republics other 60 DTCs do not contain Article 26(5) of the OECD Model Tax Convention. 188. For the 60 DTCs that do not contain Article 26(5) of the OECD Model Tax Convention, the absence of this paragraph does not automatically create restrictions on exchange of bank information. The commentary to Article 26(5) indicates that while paragraph 5, added to the Model Tax Convention in 2005, represents a change in the structure of the Article, it should not be interpreted as suggesting that the previous version of the Article did not authorise the exchange of such information. As described in Part B of this report, the Slovak Republic is able to obtain and exchange information
33. Paragraph 4 of the 1974 protocol.

held by financial institutions, nominees, agents and ownership and identity information pursuant to an EOI request. However, exchange of such information will be subject to reciprocity and there may be domestic limitations in the laws of some of these partners. 34 189. It is recommended that the Slovak Republic update the DTCs with partners that currently have restrictions under their domestic laws on access to bank information in the absence of a specific DTC provision requiring such access for EOI purposes. The Slovak Republic should continue to renegotiate such DTCs to include a provision similar to Article 26(5) of the OECD Model Taxation Convention.
Absence of domestic tax interest (ToR C.1.4)

190. The concept of domestic tax interest describes a situation where a contracting party can only provide information to another contracting party if it has an interest in the requested information for its own tax purposes. A refusal to provide information based on a domestic tax interest requirement is not consistent with the international standard. EOI partners must be able to use their information gathering measures even though invoked solely to obtain and provide information to the requesting jurisdiction. 191. Out of the Slovak Republics 64 DTCs: seven DTCs 35 contain provisions similar to Article 26(4) of the OECD Model Tax Convention, which oblige the contracting parties to use their information gathering measures to obtain and provide information to the requesting jurisdiction even in cases where the requested party does not have a domestic interest in the requested information; the DTCs with Sri Lanka and the Netherlands 36 only allow the exchange of information at the disposal of the competent authorities, meaning that both of these agreements do not meet the international standard. However, as noted above, the Netherlands is subject to
34. 21 of the 60 jurisdictions with DTCs that do not include Article 26(5) have already been reviewed by the Global Forum (Australia, Austria, Belgium, Canada, Denmark, Estonia, France, the Former Yugoslav Republic of Macedonia, Germany, Hungary, India, Indonesia, Ireland, Italy. Japan, Luxembourg, Norway, Singapore, Spain, the UK and the US). Limitations have been identified within the legislation of Austria, Luxembourg, Estonia and Singapore. Canada, Chinese Taipei, Georgia, Russia, Switzerland (including the 2010 protocol), USA and Vietnam. Slovakia and the Netherlands can nevertheless exchange information to the standard under the EU Mutual Assistance Directive 77/799/EC.
35. 36.
the Council Directive 77/799/EEC, which allows for exchange of information in the absence of domestic tax interest. As both the Netherlands and Slovak Republic do not require a domestic interest for obtaining and exchanging information, the wording in the DTC is not a concern in practice; and the remaining 55 DTCs do not contain explicit provisions obliging the contracting parties to use information-gathering measures to obtain and exchange requested information without regard to a domestic tax interest. 192. There are no domestic tax interest restrictions on the Slovak Republics powers to access information in EOI cases (see Section B above). As such, the exchange of information in the absence of domestic interest in respect of the remaining 55 DTCs will be subject to reciprocity and will depend on the domestic limitations (if any) in the laws of some of these partners. 37 Where such restrictions exist, it is recommended that the Slovak Republic work with the relevant DTC partners to remove these restrictions.
Absence of dual criminality principles (ToR C.1.5)

193. The principle of dual criminality provides that assistance can only be provided if the conduct being investigated (and giving rise to an information request) would constitute a crime under the laws of the requested jurisdiction if it had occurred in the requested jurisdiction. In order to be effective, exchange of information should not be constrained by the application of the dual criminality principle. 194. There are no dual criminality provisions in any of the Slovak Republics DTCs.
Exchange of information in both civil and criminal tax matters (ToR C.1.6)
195. Information exchange may be requested both for tax administration purposes and for tax prosecution purposes. The international standard is not limited to information exchange in criminal tax matters but extends to information requested for tax administration purposes (also referred to as civil tax matters).
37. 19 of the remaining 55 jurisdictions with DTCs that do not include Article 26(4) have already been reviewed by the Global Forum (Australia, Austria, Belgium, Denmark, Estonia, France, the Former Yugoslav Republic of Macedonia, Germany, Hungary, India, Indonesia, Ireland, Italy. Japan, Luxembourg, Norway, Singapore, Spain and the UK). Limitations have been identified within the legislation of Singapore.

196. All of the Slovak Republics DTCs provide for exchange of information in both civil and criminal tax matters.
Provide information in specific form requested (ToR C.1.7)

197. There are no restrictions in the Slovak Republics domestic laws that would prevent it from providing information in a specific form, so long as this is consistent with its own administrative practices. This is reinforced in the Slovak Republics DTC with the United States, which contains express provisions (under Article 27(3)) that strengthen the need to provide information in the form requested.
In force (ToR C.1.8)

198. Exchange of information cannot take place unless a jurisdiction has exchange of information agreements in force. The international standard requires that jurisdictions take all steps necessary to bring information agreements that have been signed into force expeditiously. 199. The Slovak Republic has brought all its EOI agreements into force expeditiously, mostly within a year of them being signed. There are only three agreements (Georgia, Egypt and the Protocol with Switzerland) which have not been brought into force to date; and for these agreements the Slovak Republic has completed all steps which are necessary on its part to bring them into force.
Be given effect through domestic law (ToR C.1.9)

200. For information exchange to be effective the parties to an EOI arrangement need to enact any legislation necessary to comply with the terms of the arrangement. The Slovak Republics EOI agreements are given the force of law once they are approved by national Parliament, ratified by the President of the Slovak Republic; and there is an exchange of notes on ratification or exchange of notes on completion of domestic approval with the relevant EOI partner. The Slovak Constitution provides that the provisions of the EOI agreements override domestic laws. 201. The above procedures do not apply where the EOI agreement is not regulated by the Slovak Constitution. Such agreements are applied through the Income Tax Act, which specifies that Any international treaty, approved, ratified and promulgated in the manner prescribed by law, or any agreement, signed or approved by the Government of the Slovak Republic, that regulates the taxation and related legal relations in respect of dependent territories entitled to conclude international relations takes precedence over this Act (s. 1(2)). The provisions of these agreements do not take precedence over
any of the Slovak Republics domestic laws other than the Income Tax Act. As a result, the EOI provisions of such DTCs (currently only the DTC with Chinese Taipei) cannot be given full effect. 202. As noted in Part B of this report, the power of the Slovak authorities to obtain information for EOI purposes is unclear in a narrow range of cases. The legislation should be clarified to ensure that the Slovak Republics EOI agreements are effective in all cases. This practical impact of this issue will be examined in detail during the Slovak Republics Phase 2 review.
C.2. Exchange of information mechanisms with all relevant partners

The jurisdictions network of information exchange mechanisms should cover all relevant partners.
203. Ultimately, the international standard requires that jurisdictions exchange information with all relevant partners, meaning those who are interested in entering into an information exchange arrangement. Agreements cannot be concluded only with counterparties without economic significance. If it appears that a jurisdiction is refusing to enter into agreements or negotiations with partners, in particular ones that have a reasonable expectation of requiring information from that jurisdiction in order to properly administer and enforce its tax laws, it may indicate a lack of commitment to implement the standards. 204. The Slovak Republic has an extensive EOI network comprising 64 signed DTCs, of which 62 have already been brought into force. Out of these 64 DTCs: 43 are with Global Forum member jurisdictions; 31 are with OECD countries; 17 are with G20 countries; and 22 are with EU members. 205. The Slovak Republics current EOI network covers all of its biggest trading partners, including Russia, China, France, the Czech Republic, Austria and Germany. The EOI agreements with two of its biggest trading partners Austria and Germany are not to the standard. However, as mentioned

above, both are EU members subject to the Council Directive 77/799/EEC, which allows EOI to the standard as long as the jurisdictions do not have domestic law impediments to effective EOI. As Germany does not have domestic law impediments to effective EOI, Germany is able to exchange information effectively with the Slovak Republic in practice. Austria is unable to exchange bank information in the absence of an express provision obliging it to do so 38, and therefore will not be able to exchange information effectively with the Slovak Republic under 77/799/EEC. Austria will however be able to engage in effective EOI with the Slovak Republic once Directive 2011/16/EU (which replaces 77/799/EEC with effect from 1 January 2013 and which allows exchange of information fully in line with the standard), comes into force. 206. The Slovak authorities have advised that the Slovak Republic is taking active steps to expand its EOI network and is in the process of holding TIEA negotiations with about 20 jurisdictions. 207. No jurisdictions have advised the assessment team during the course of the review that the Slovak Republic had refused to negotiate or conclude an EOI agreement with it.
Phase 1 determination The element is in place. Factors underlying recommendations Recommendations The Slovak Republic should continue to develop its EOI network to the standard with all relevant partners.
C.3. Confidentiality
The jurisdictions mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received.
Information received: disclosure, use, and safeguards (ToR C.3.1)

208. Governments would not engage in information exchange without the assurance that the information provided would only be used for the purposes permitted under the exchange mechanism and that its confidentiality would be preserved. Information exchange instruments must therefore contain
38. See Peer Review Report of Austria.
confidentiality provisions that spell out specifically to whom the information can be disclosed and the purposes for which the information can be used. In addition to the protections afforded by the confidentiality provisions of information exchange instruments, jurisdictions with tax systems generally impose strict confidentiality requirements on information collected for tax purposes. 209. Under the TAA, any information obtained within the framework of a tax proceeding must be kept confidential. However, the TAA permits the disclosure of such information to certain parties, including those not involved in or having overview of the enforcement of the Slovak Republics tax laws, such as the Social Insurance Agency and Central Office of Labour, Social Issues and Family, for the discharge of their functions. This is not in line with the international standard. 210. As noted above, however, the provisions of the Slovak Republics DTCs ratified under the Constitution override domestic laws, meaning that the confidentiality provisions present therein have full legal effect in the Slovak Republic. All the Slovak Republics EOI agreements have confidentiality provisions to ensure that the information exchanged will be disclosed only to persons authorised by the agreements. While each of the articles might vary slightly in wording, these provisions contain all of the essential aspects of Article 26(2) of the OECD Model Tax Convention. 211. The agreement with Chinese Taipei has been enacted under the ITA and not under the Constitution. As a consequence, its provisions do not prevail on the confidentiality provisions contained in other laws, in particular the TAA. As a result, the Slovak Republic is unable to provide taxpayer specific information to Chinese Taipei under and will not request taxpayer specific information from Chinese Taipei. The Slovak Republic should ensure that all the confidentiality provisions of all its EOI agreements are given effect through its domestic laws.
All other information exchanged (ToR C.3.2)

212. Confidentiality rules should apply to all types of information exchanged, including information provided in a request, information transmitted in response to a request and any background documents to such requests. 213. The confidentiality provisions in the Slovak Republics DTCs and domestic laws do not distinguish between information received in response to a request and information received in a request; therefore these provisions apply equally to requests for such information, background documents to such requests, and any other document reflecting such information, including communications between the requesting and requested jurisdictions and communications within the tax authorities of either jurisdiction.

C.4. Rights and safeguards of taxpayers and third parties

The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties.
Exceptions to requirement to provide information (ToR C.4.1)

214. The international standard allows requested parties not to supply information in response to a request in certain identified situations where an issue of trade, business or other secret may arise, or where the disclosure of information would be contrary to public policy. Among other reasons, an information request can be declined where the requested information would disclose confidential communications protected by legal professional privilege. 215. Communications between a client and an attorney or other admitted legal representative are only privileged to the extent that the attorney or other legal representative acts in his or her capacity as an attorney or other legal representative. Where attorney-client privilege is more broadly defined it does not provide valid grounds on which to decline a request for EOI. To the extent, therefore, that an attorney acts as a nominee shareholder, a trustee, a settlor, a company director or under a power of attorney to represent a company in its business affairs, EOI resulting from and relating to any such activity cannot be declined because of legal professional privilege. 216. All but one of the Slovak Republics DTCs ensure that the contracting parties are not obliged to provide information which would disclose any trade, business, industrial, commercial or professional secret, information which is subject to legal professional privilege, or information the disclosure of which is contrary to public policy. However, the term professional secrets is not defined in the DTCs and therefore, considering the provisions of Article 3(2) of the DTCs, this term would derive its meaning from the domestic laws of the Slovak Republic. As noted in Part B of this report, the scope of information subject to professional privilege in the Slovak Republic is wide and may potentially go beyond the international standard. 217. The Slovak Republics DTC with Sri Lanka does not contain express safeguards that allow the contracting parties to decline to supply information when doing so is contrary to public policy. This is not consistent with the international standard and it is recommended that the Slovak Republic renegotiate the DTC to bring it up to the standard.

Phase 1 determination The element is in place, but certain aspects of the legal implementation of the element need improvement. Factors underlying recommendations The Slovak Republics tax treaties do not define the term professional secret and the scope of the term professional secret under its domestic laws is wide and may go beyond the international standard. Recommendations It is recommended that the Slovak Republic restricts the scope of the protection under the term professional secret in its domestic laws so as to be in line with the standard for the purpose of agreements for exchange of information.
C.5. Timeliness of responses to requests for information

The jurisdiction should provide information under its network of agreements in a timely manner.
Responses within 90 days (ToR C.5.1)

218. There appear to be no legal restrictions on the Slovak Republic tax authorities ability to respond to EOI requests within 90 days of receipt by providing the information requested or providing an update on the status of the request 219. A review of the Slovak Republics ability to respond to requests in a timely manner will be conducted in the course of its Phase 2 review.
Organisational process and resources (ToR C.5.2)

220. The Slovak Republics competent authority for its EOI agreements is the Ministry of Finance or a tax authority designated by the Ministry. Currently, the department responsible for EOI is the Tax Directorate, a unit within the Ministry of Finance. The Ministry of Finance is responsible for negotiating EOI agreements. The power to sign EOI agreements lies with the President, but this is typically delegated to other appropriate signatories such as Ministers or Ambassadors. 221. A review of the Slovak Republics organisational process and resources will be conducted in the context of the Slovak Republics Phase 2 review.
Absence of restrictive conditions on exchange of information (ToR C.5.3)

222. Exchange of information assistance should not be subject to unreasonable, disproportionate, or unduly restrictive conditions. 223. There are no aspects of the Slovak Republics domestic laws that appear to impose additional restrictive conditions on exchange of information.
Phase 1 determination The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 71
Summary of Determinations and Factors Underlying Recommendations

Factors underlying recommendations
Determination
Recommendations
Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1) The element is in place, but certain aspects of the legal implementation of the element need improvement. Not all companies incorporated outside of the Slovak Republic but having their place of effective management (and therefore resident) therein are subject to clear requirements to maintain identity information concerning their owners. The availability of such information will generally depend on the law of the jurisdiction in which the company is incorporated and so may not be available in all cases. Persons in the Slovak Republic who act as professional trustees for foreign trusts are not obliged to identity the settlors and beneficiaries of such trusts. Ownership and identity information should be available for all foreign companies having a sufficient nexus with the Slovak Republic.
Persons in the Slovak Republic who act as professional trustees for foreign trusts should be required to maintain identity information on the settlors and beneficiaries of the foreign trusts for which they act.
72 SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS

Determination
Recommendations
Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements. (ToR A.2) The element is in place. Slovak trustees of foreign trusts are not required to keep accounting records that fully reflect the financial position and assets/liabilities of the foreign trust\. The Slovak Republic should ensure that such accounting records are maintained for a minimum of five years for any foreign trusts which have Slovak-resident administrators or trustees.
Banking information should be available for all account-holders. (ToR A.3) The element is in place. Competent authorities should have the power to obtain and provide information that is the subject of a request under an exchange of information arrangement from any person within their territorial jurisdiction who is in possession or control of such information (irrespective of any legal obligation on such person to maintain the secrecy of the information). (ToR B.1) The element is in place, but certain aspects of the legal implementation of the element need improvement. The power of the Slovak authorities to obtain information for EOI purposes is unclear in a narrow range of cases where a person has no nexus with the Slovak Republic for tax purposes, as the interaction between the EOI Act and TAA Act is unclear. Professional privilege is broadly defined under Slovak domestic laws and there are no express exceptions in the case of requests made under an EOI agreement. It is recommended that the Slovak Republic clarifies its legislation to put beyond doubt that the tax administrations information gathering powers can be exercised to meet all EOI requests.
The Slovak Republic should ensure that domestic provisions on professional privileges allow exchange of information in line with the standard.
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the requested jurisdiction should be compatible with effective exchange of information. (ToR B.2) The element is in place. Exchange of information mechanisms should allow for effective exchange of information. (ToR C.1) The element is in place.
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 73
Determination
Recommendations
The jurisdictions network of information exchange mechanisms should cover all relevant partners. (ToR C.2) The element is in place. The Slovak Republic should continue to develop its EOI network to the standard with all relevant partners.
The jurisdictions mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3) The element is in place. The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4) The element is in place but certain aspects of the legal implementation of the element need improvement. The Slovak Republics tax treaties do not define the term professional secret and the scope of the term professional secret under its domestic laws is wide and may go beyond the international standard. It is recommended that the Slovak Republic restricts the scope of the protection under the term professional secret in its domestic laws so as to be in line with the standard for the purpose of agreements for exchange of information.
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5) The assessment team is not in a position to evaluate whether this element is in place, as it involves issues of practice that are dealt with in the Phase 2 review.
ANNEXES 75
Annex 1: Jurisdictions Response to the Review Report*
The Slovak Republic highly appreciates the tremendous work performed by the members of the Assessment Team during the evaluation of legal and regulatory framework of the Slovak Republic, and welcomes the Phase 1 Peer Review Report as approved by the Peer Review Group. The Slovak Republic has taken note of the positive findings of the Report and continues to develop its exchange of information network to the standard with all relevant partners. With regard to Joint Council of Europe/OECD Convention on Mutual Administrative Assistance in Tax Matters, the Slovak Republic is committed to sign this important instrument for effective exchange of tax information, as soon as substantial transformation of tax administration system in the Slovak Republic (carried out from 2012 to 2013) is completed, and all possible technical difficulties are resolved.
* This Annex presents the Jurisdictions response to the review report and shall not be deemed to represent the Global Forums views.
76 ANNEXES
Annex 2: List of all Exchange-of-Information Mechanisms in Force
Multilateral agreements
The Slovak Republic exchanges information under: the new EU Council Directive 2011/16/EU of 15 February 2011 on administrative co operation in the field of taxation. This Directive comes into force on 1 January 2013. It repeals Council Directive 77/799/EEC of 19 December 1977 and provides inter alia for exchange of banking information on request for taxable periods after 31 December 2010 (Article 18). All EU members are required to transpose it into national legislation by 1 January 2013. The current EU members, covered by this Council Directive, are: Austria, Belgium, Bulgaria, Cyprus 39, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, the Slovak Republic, Slovenia, Spain, Sweden and the United Kingdom. EU Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments. This Directive aims to ensure that savings income in the form of interest payments generated in an EU member state in favour of individuals or residual
39. Note by Turkey: The information in this document with reference to Cyprus relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Turkey shall preserve its position concerning the Cyprus issue. Note by all the European Union Member States of the OECD and the European Commission: The Republic of Cyprus is recognised by all members of the United Nations with the exception of Turkey. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.
ANNEXES 77
entities being resident of another EU member state are effectively taxed in accordance with the fiscal laws of their state of residence. It also aims to ensure exchange of information between member states. Council Regulation (EU) No. 904/2010 of 7 October 2010 on administrative cooperation and combating fraud in the field of value added tax (recast of the Council Regulation (EC) No 1798/2003 of 7 October 2003 on administrative cooperation in the field of value added tax); Council Regulation (EC) No. 2073/2004 of 16 November 2004 on administrative cooperation in the field of excise duties.
Bilateral agreements
Jurisdiction 1 Australia Type of EOI arrangement Double Taxation Convention (DTC) DTC DTC DTC DTC DTC DTC DTC DTC DTC
40
Date signed 24-Aug-99
Date in force 22-Dec-99
2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17
Austria Belarus Belgium Bosnia Brazil Bulgaria Canada China Croatia Cyprus Czech Republic Denmark Egypt Estonia Finland France
7-Mar-78 12-Jan-99 15-Jan-97 2-Nov-08 26-Aug-86 12-Nov-99 22-May-01 11-Jun-87 12-Feb-96 15-Apr-80 26-Mar-02 5-May-82 20-Jan-04 21-Oct-03 15-Feb-99 1-Jun-73
12-Feb-79 5-Jul-00 13-Jun-00 17-Apr-83 14-Nov-90 2-May-01 18-Dec-01 23-Dec-87 14-Nov-96 30-Dec-80 14-Jul-03 27-Dec-82 ---29-Mar-06 6-May-00 25-Jan-75
DTC DTC DTC DTC DTC DTC DTC
40.
See previous footnote.
78 ANNEXES
Type of EOI arrangement DTC
Jurisdiction 18 Former Yugoslav Republic of Macedonia Georgia Greece
Date signed 05-Oct-09
Date in force 27-Apr-10
19 21
DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC
27-Oct-11 19-Dec-80 23-Oct-86 5-Jan-94 15-Apr-02 27-Jan-86 12-Oct-00 8-Jun-99 8-Sep-99 05-May-81 11-Oct-77 21-Mar-07 27-Aug-01 11-Mar-99 20-Feb-09 15-Mar-01 18-Mar-91 07-Sep-99 13-May-06 25-Nov-03 26-Feb-01 04-Mar-74 31-Aug-89 27-Jun-79 18-Aug-94 06-Jun-01 03-Mar-94 24-Jun-94 26-Feb-01 09-May-05
---17-Nov-83 23-May-89 21-Dec-95 19-Jun-03 13-Mar-87 30-Jan-01 30-Dec-99 23-May-00 26-Jun-84 25-Nov-78 28-Jul-08 08-Jul-03 12-Jun-00 21-Jun-10 16-Dec-02 30-Dec-92 20-Aug-00 28-Sep-07 17-Sep-06 15-Oct-01 05-Nov-74 02-Dec-90 28-Dec-79 21-Dec-95 02-Nov-04 29-Dec-95 01-May-97 15-Oct-01 12-Jun-06
20 Germany 22 Hungary 23 Iceland 24 India 25 Indonesia 26 Ireland 27 Israel 28 Italy 29 Japan 30 Kazakhstan 31 Korea 32 Latvia 33 Libya 34 Lithuania 35 Luxembourg 36 Malta 37 Mexico 38 Moldova 39 Montenegro 40 Netherlands 41 42 Nigeria Norway
43 Poland 44 Portugal 45 Romania 46 Russia 47 Serbia 48 Singapore
ANNEXES 79
Jurisdiction 49 Slovenia 50 South Africa 51 52 Spain Sri Lanka
Type of EOI arrangement DTC DTC DTC DTC DTC DTC Protocol DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC
Date signed 14-May-03 28-May-98 08-May-80 26-Jul-78 16-Feb-79 14-Feb-97 07-Feb-11 18-Feb-09 10-Aug-11 14-Mar-90 02-Apr-97 08-Aug-96 05-Nov-90 23-Jan-96 08-Oct-93 06-Mar-03 27-Oct-08
Date in force 11-Jul-04 30-Jun-99 05-Jun-81 19-Jun-79 08-Oct-80 23-Dec-97 ---27-Feb-10 24-Sep-11 25-Oct-91 02-Dec-99 26-Jun-98 20-Dec-91 22-Nov-96 30-Dec-93 17-Oct-03 29-Jul-09
53 Sweden 54 Switzerland 55 Syria 56 Chinese Taipei 57 Tunisia 58 Turkey 59 Turkmenistan 60 UK 61 Ukraine 62 USA 63 Uzbekistan 64 Vietnam
80 ANNEXES
Annex 3: List of all Laws, Regulations and Other Material Received
Commercial Laws
Act 513/1991 Commercial Code Act 431/2002 on Accounting Act 566/2001 on Securities and Investment Services Act 586/2003 on the Legal Profession and on Amending Act No. 455/1991 on the Business and Self-Employment Services (Business Licensing Act) Act 34/2002 on Foundations Act 530/2003 on Business Registers
Taxation Laws
Act 595/2003 Coll. on Income Tax Act 76/2007 on International assistance and cooperation in administration of taxes Act 511/1992 Administration of Taxes and Fees and Changes to the System of Local Financial Authorities Act
Banking Laws
Act 483/2001 Coll. on banks and on changes and amendments to certain other laws
ANNEXES 81
Anti-Money Laundering Laws

Act 297/2008 Coll. on the Prevention of Legalization of Proceeds of Criminal Activity and Terrorist Financing and on Amendments and Supplements to Certain Acts
Others
Constitution of the Slovak Republic
The Slovak Republics laws can be found online at

www.justice.gov.sk/Stranky/Zakony/Uvod.aspx http://eur-lex.europa.eu/n-lex/legis_sk/jaspi.predpisy_ form_en.htm www.finance.gov.sk/en/Default.aspx?CatID=6 www.minv.sk/swift_data/source/policia/finpol/297_2008en.pdf and www.vop.gov.sk/en/legal_basis/constitution.html
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

The OECD is a unique forum where governments work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to co-ordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The European Union takes part in the work of the OECD. OECD Publishing disseminates widely the results of the Organisations statistics gathering and research on economic, social and environmental issues, as well as the conventions, guidelines and standards agreed by its members.
OECD PUBLISHING, 2, rue Andr-Pascal, 75775 PARIS CEDEX 16 (23 2012 11 1 P) ISBN 978-92-64-16894-7 No. 59913 2012
Global Forum on Transparency and Exchange of Information for Tax Purposes
PEER REVIEWS, PHASE 1: SLOVAK REPUBLIC

The Global Forum on Transparency and Exchange of Information for Tax Purposes is the multilateral framework within which work in the area of tax transparency and exchange of information is carried out by over 100 jurisdictions which participate in the work of the Global Forum on an equal footing. The Global Forum is charged with in-depth monitoring and peer review of the implementation of the standards of transparency and exchange of information for tax purposes. These standards are primarily reected in the 2002 OECD Model Agreement on Exchange of Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax Convention on Income and on Capital and its commentary as updated in 2004, which has been incorporated in the UN Model Tax Convention. The standards provide for international exchange on request of foreseeably relevant information for the administration or enforcement of the domestic tax laws of a requesting party. Fishing expeditions are not authorised, but all foreseeably relevant information must be provided, including bank information and information held by duciaries, regardless of the existence of a domestic tax interest or the application of a dual criminality standard. All members of the Global Forum, as well as jurisdictions identied by the Global Forum as relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1 reviews assess the quality of a jurisdictions legal and regulatory framework for the exchange of information, while Phase 2 reviews look at the practical implementation of that framework. Some Global Forum members are undergoing combined Phase 1 plus Phase 2 reviews. The ultimate goal is to help jurisdictions to effectively implement the international standards of transparency and exchange of information for tax purposes. All review reports are published once approved by the Global Forum and they thus represent agreed Global Forum reports. For more information on the work of the Global Forum on Transparency and Exchange of Information for Tax Purposes, and for copies of the published review reports, please visit www.oecd.org/tax/transparency and www.eoi-tax.org.
Please cite this publication as: OECD (2012), Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews: Slovak Republic 2012: Phase 1: Legal and Regulatory Framework, OECD Publishing. http://dx.doi.org/10.1787/9789264168954-en This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical databases. Visit www.oecd-ilibrary.org, and do not hesitate to contact us for more information.
ISBN 978-92-64-16894-7 23 2012 11 1 P
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Global Forum On Transparency and Exchange of Information For Tax Purposes: Peer Reviews: Global Forum On Transparency and Exchange of Information For Tax Purposes Peer Reviews: Slovak Republic 2012

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GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE OF INFORMATION FOR TAX PURPOSES

Peer Review Report Phase 1 Legal and Regulatory Framework

ISBN 978-92-64-16894-7 (print) ISBN 978-92-64-16895-4 (PDF)

Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda.

ABOUT THE GLOBAL FORUM 5

About the Global Forum

Overview of the Slovak Republic

Governance and legal system

International issues and exchange of information

The Slovak Republics commercial laws and financial sector

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 17

Compliance with the Standards

18 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 19

A.1. Ownership and identity information

20 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Companies (ToR A.1.1)

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 21

22 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Information required to be provided to government authorities Commercial Laws

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 23

24 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 25

Tax Administration Act

26 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 27

Information required to be held by companies

28 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Information held by service providers

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 29

30 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Nominee identity information

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 31

Bearer shares (ToR A.1.2)

32 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Partnerships (ToR A.1.3)

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 33

Information required to be provided to government authorities

34 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Ownership and identity information required to be held by partnerships

Trusts (ToR A.1.4)

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 35

36 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Foundations (ToR A.1.5)

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 37

Information held by government authorities

38 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Anti-money laundering legislation

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 39

Enforcement provisions to ensure availability of information (ToR A.1.6)

40 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 41

A.2. Accounting records

42 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

Income Tax Act

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 43

Accounting records for trusts

Accounting records to be kept by service providers

44 COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

A.3. Banking information

Record-keeping requirements (ToR A.3.1)

COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION 45