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 Review Report Phase 2 Implementation of the Standard in Practice

SLOVAK REPUBLIC
Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews: Slovak Republic 2014
PHASE 2: IMPLEMENTATION OF THE STANDARD IN PRACTICE
April 2014 (reflecting the legal and regulatory framework as at December 2013)
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 (2014), Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews: Slovak Republic 2014: Phase 2: Implementation of the Standard in Practice, OECD Publishing. http://dx.doi.org/10.1787/9789264210080-en
ISBN 978-92-64-21002-8 (print) ISBN 978-92-64-21008-0 (PDF)
Series: Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews ISSN 2219-4681 (print) ISSN 2219-469X (online)
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OECD 2014
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TABLE OF CONTENTS 3
Table of Contents
About the Global Forum . 5 Executive Summary . 7 Introduction11 Information and methodology used for the peer review of the Slovak Republic.11 Overview of the Slovak Republic. 12 Recent developments 19 Compliance with the Standards 21 A. Availability of Information 21 Overview 21 A.1. Ownership and identity information 23 A.2. Accounting records 55 A.3. Banking information 61 B. Access to Information . 65 Overview 65 B.1. Competent authoritys ability to obtain and provide information 66 B.2. Notification requirements and rights and safeguards. 75 C. Exchanging Information 77 Overview 77 C.1. Exchange of information mechanisms 79 C.2. Exchange of information mechanisms with all relevant partners 88 C.3. Confidentiality 90 C.4. Rights and safeguards of taxpayers and third parties. 94 C.5. Timeliness of responses to requests for information 96
PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014
4 TABLE OF CONTENTS Summary of Determinations and Factors UnderlyingRecommendations. 107 Annex1: Jurisdictions Response to the Review Report111 Annex2: List of Slovakias Exchange of Information Mechanisms112 Annex3: List of all Laws, Regulations and Other Material Received .121 Annex4: People Interviewed During the On-Site Visit . 123
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 120jurisdictions, 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 Article26 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 the application of a dual criminality standard. 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 Phase2 reviews look at the practical implementation of that framework. Some Global Forum members are undergoing combined Phase1 and Phase2 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 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 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 as well as the practical implementation of that framework. 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 a 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 1January 1993. 4. The Slovak Republic is actively involved in all forms of administrative co-operation for tax purposes. The Slovak Republic has a well developed and robust treaty network for exchange of information for tax purposes. As at December 2013 it has signed 65 DTCs, 63 of which are in force. Slovakia has also signed one TIEA which is not yet in force. Most of these treaties contain exchange of information articles that meet the international standard. Being a European Union member, the Slovak Republic also exchanges information under the EU exchange of information mechanisms. The Slovak Republic signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters on 29May 2013. The Convention has been ratified and enters into force on 1March 2014 in the Slovak Republic. The Multilateral Convention covers 28 jurisdictions that the Slovak Republic does not have a bilateral agreement with. 5. Most relevant entities are subject to comprehensive requirements under commercial and accounting laws to maintain and have available relevant ownership and accounting information. Sufficient supervisory and enforcement measures are taken by the respective government authorities to ensure that the information is available in practice. The Slovak Republic
8 EXecutive SummarY
tax authority also has extensive powers to gather and exchange information for tax purposes. All these powers are effectively used in practice to gather information for EOI purposes. Availability and access to information is complemented by an extensive network of EOI instruments with 94 partners. These instruments mostly allow the Slovak Republic to exchange information effectively and to the standard. 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 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 and this may limit the effective exchange of information in some instances. 8. The Slovak Republics domestic laws and all Slovakias EOI agreements contain provisions to ensure that the information exchanged will be kept confidential. Nevertheless, Slovak law allows the taxpayer to inspect his/her file containing information obtained from the requesting jurisdiction, including the EOI request itself without appropriate exceptions. This is not in line with the standard. 9. The Slovak Republic has long experience in EOI and it is considered by its EOI partners as an important and reliable partner. The Slovak Republic received 519requests over the period from 1July 2009 to 30June 2012. The requested information was provided within 90days in 28% of the cases, within a period of between 91 and 180days in 21% of the cases, within between 181days and one year in 30% of the cases and after a year in 16% of the cases. The Slovak Republic has in place appropriate organisational processes to ensure effective exchange of information. 10. The Slovak Republics competent authority for exchange of information is the Central Liaison Office (CLO) Unit situated in the anti-fraud department of the Financial Directorate. The CLO Unit is responsible for exchange of information in the field of direct and indirect taxes. In the majority of cases the requested information is obtained by local offices. Provision of information is regularly monitored by the CLO Unit and contact persons at each tax office. However, there are certain areas where improvement is needed in order to ensure that information or status updates are provided in a timely manner in all cases.
EXecutive SummarY 9
11. The Slovak Republic has been assigned a rating for each of the 10 essential elements as well as an overall rating. The ratings for the essential elements are based on the analysis in the text of the report, taking into account the Phase1 determinations and any recommendations made in respect of Slovakias legal and regulatory framework and the effectiveness of its exchange of information in practice. On this basis, the Slovak Republic has been assigned the following ratings: Compliant for elements A.2, A.3, B.2, C.1 and C.2, Largely Compliant for elements A.1, B.1, C.4 and C.5; and Partially Compliant for elementC.3. In view of the ratings for each of the essential elements taken in their entirety, the overall rating for the Slovak Republic is Largely Compliant. 12. Recommendations have been made where elements of the Slovak Republics EOI regime have been found to be in need of improvement. The Slovak Republics follow-up report on progress in these areas should be provided to the PRG within twelve months after the adoption of this report.
Introduction 11
Introduction
Information and methodology used for the peer review of the Slovak Republic
13. The assessment of the legal and regulatory framework of the Slovak Republic as well as its practical implementation 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 has been conducted in two stages: the Phase1 review assessed Slovakias legal and regulatory framework for the exchange of information as at December 2011, while the Phase2 review assessed the practical implementation of this framework during a three year period (July 2009 through June 2012) as well as amendments made to this framework since the Phase1 review up to December 2013. The following analysis reflects the integrated Phase1 and Phase2 assessments. 14. The assessment was based on the laws, regulations, and exchange of information mechanisms in force or effect as at 23December 2013, Slovakias answers to the Phase1 and Phase2 questionnaires, information provided during the on-site visit, other materials supplied by the Slovak Republic and information provided by partner jurisdictions. During the on-site visit, the assessment team met with officials and representatives of relevant Slovak government agencies including the Ministry of Finance, Financial Directorate, Commercial Registrar, Ministry of Justice, Central Security Depository, National Bank of Slovakia and Financial Intelligence Unit (see Annex4). 15. 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 and its application
12 Introduction
in practice 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. In addition, to reflect the Phase2 component, recommendations are made concerning Slovakias practical application of each of the essential elements and a rating of either: (i)compliant, (ii)largely compliant, (iii) partially compliant, or (iv) non-compliant is assigned to each element. As outlined in the Note on Assessment Criteria, an overall rating is applied to reflect the jurisdictions level of compliance with the standards (see the Summary of Determinations and Factors Underlying Recommendations at the end of this report). 16. The Phase1 and Phase2 assessments were conducted by assessment teams comprising expert assessors and representatives of the Global Forum secretariat. The 2011 Phase1 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. The Phase2 assessment team consisted of Ms La Toya James, Crown Counsel of the International Tax Authority, Ministry of Finance, Virgin Islands (British), Mr. Salah Gueydi, Senior Tax Advisor, Ministry of Economy and Finance, Qatar and Mr Radovan Zidek from the Global Forum Secretariat.
Overview of the Slovak Republic

17. 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 49000 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 1January 1993. 18. The Slovak Republic has a diversified economy with one of the fastest growth rates in the European Union and the OECD.1 Following
1. CIA, The World Factbook Country Comparison: National product real growth rate, https://www.cia.gov/library/publications/the-world-factbook/ rankorder/2003rank.html.
Introduction 13
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 and 3% in 2011. 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 2012, the Slovak Republics gross domestic product was approximately EUR102billion and the per capita GDP was approximately EUR18690.3 19. The service sector constitutes the largest component of GDP (59.2%), followed by industry (37%) and agriculture (3.8%).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 and is in the following sectors: industry; banking and insurance; wholesale and retail trade; production of electricity, gas and water; transport and telecommunications. 20. The main industry sectors are car manufacturing and electrical engineering. From 2005 to 2011, the Slovak Republics exports increased by 40%, and imports by 26%. Both imports and exports were diversified across partners. Overall, the Slovak Republics main trading partners are the European Union, Russia and China.6 21. 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).
2.
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 3November 2011. 3. CIA, The World Factbook Slovakia: https://www.cia.gov/library/publications/ the-world-factbook/geos/lo.html. 4. CIA, The World Factbook Slovakia: https://www.cia.gov/library/publications/ the-world-factbook/geos/lo.html. 5. US Department of State, www.state.gov/e/eeb/ifd/2008/101009.htm, retrieved 10October 2011. 6. WTO data http://stat.wto.org/CountryProfile/WSDBCountryPFView. aspx?Language=E&Country=SK.
14 Introduction
Governance and legal system

22. 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 30days. 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. 23. 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). 24. 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 (Obiansky zkonnk). The Commercial Code (Obchodn zkonnk) 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 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. 25. 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 are appointed by the President from a slate of candidates nominated by parliament. 26. International treaties are negotiated and ratified by the President of the Slovak Republic (Art.102(1)a Constitution). The President may delegate
Introduction 15
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). 27. Under the Income Tax Act (Act No.595/2003), the Slovak government can also conclude agreements regulating 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. There is only one EOI agreement which falls into this category. 28. A complete list of relevant legislation and regulations is set out in Annex3.
Tax system
29. 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 system underwent a major tax reform in 2003-4 aimed at simplifying the calculation of taxes and transferring the tax burden from direct to indirect taxes. The administrative aspects of taxation are governed by Act No.563/2009 Coll. on tax administration (Tax Code). 30. 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 taxable income below 176.8 times the yearly minimum subsistence amount (EUR34402 in 2013); income above this threshold is taxed at a rate of 25%. Tax allowances can be claimed to reduce active income only, i.e.income from employment, entrepreneurial income and self-employment income. 31. 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 has its registered seat or 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,
16 Introduction
even if this place is not entered into the Commercial Register (s. 2(1)d(2) ITA). Permanent establishments of foreign companies7 are generally taxed on Slovak-source income only. The corporate tax year is the companys financial year. The corporate tax rate is 23%. Dividends received by resident and non-resident shareholders from a resident or non-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 1January 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% and 25% progressive tax rates. Equally, capital gains on the sale of shares in a resident company by resident corporate shareholders are included in ordinary corporate income. 32. 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). 33. Municipalities may introduce local taxes and local fees (such as fees for communal waste). A vehicle tax is levied by the regions. Value-added tax (VAT) and excise duties are also levied. The Slovak Republics VAT system is fully harmonised with the European VAT legislation. The standard VAT rate is 20% and the reduced rate is 10%. 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 EUR49790 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. 34. The total tax revenues in 2012 amounted to EUR8.5billion (79% of Slovak total revenue). Corporate income tax revenue was EUR1.9billion (22.3% of total tax revenues). The total tax revenue (excluding compulsory social contributions) represented 12.7% of GDP in 2011. 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. In January 2012, the Tax Directorate and the Customs Directorate were merged into the Financial Directorate and the number of local tax offices was reduced to eight plus one specialised tax office
7. 8. A permanent establishment is a fixed place of business which generally gives rise to income or value-added-tax liability in a particular jurisdiction. The projects name UNITAS was chosen as unitas means unity in Latin.
Introduction 17
for large business entities. Under UNITAS 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

35. Act No.442/2012 Coll., on international assistance and co-operation in administration of taxes (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 and 4(1)). 36. The avenues other than EOI agreements through which the Slovak Republic provides international co-operation in tax matters include: the EU Council Directive 2011/16/EU on Administrative Cooperation in the Field of Taxation the Slovak Republic is able to exchange information on tax matters under this directive; the EU Savings Directive 2003/48/EC (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; and Council Directive No.2010/24/EU concerning mutual assistance for the recovery of claims relating to taxes, duties and other measures.
37. In addition to the above instruments, the Slovak Republic as an EU Member State applies the following regulations in the field of administrative co-operation: Council Regulation (EU) No.904/2010 of 7October 2010 on administrative co-operation and combating fraud in the field of value added tax (recast of the Council Regulation (EC) No 1798/2003 of 7October 2003 on administrative co-operation in the field of value added tax); and Council Regulation (EC) No.2073/2004 of 16November 2004 on administrative co-operation in the field of excise duties. These co-operation mechanisms involve: spontaneous exchange of information; automatic exchange of information; multilateral controls; recovery assistance.
38.
18 Introduction
39. The Slovak Republic is actively involved in exchange of information in the field of VAT. Over the period under review the Slovak Republic received 6376 requests related to VAT, which made up 92% of all received EOI requests. Over the same period the Slovak Republic sent 6107 VAT requests. In the first half of 2013 there were 14 ongoing simultaneous tax audits, 13 of them concerning VAT and one concerning direct taxes. The Slovak Republic spontaneously exchanged information in 184 cases over the period under review. During the period 2009-11 the Slovak Republic received 421 requests for recovery assistance and recovered EUR30.6million for its partners. VAT exchange of information is a priority in Slovakia since most of the suspected tax fraud relates to excessive VAT refunds and fraudulent carrousel transactions.
The Slovak Republics commercial laws and financial sector

40. 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 Security 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 October 2013, there were 28 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. 41. The Slovak Republics financial sector is relatively modest, with total banking assets of about EUR57.5billion as of August 2013. It is dominated by foreign owned institutions.9 42. With reference to professional service providers, in October 2013 there were 341 public notaries in the Slovak Republic and 4931 lawyers authorised to practice law. Audit services were performed by 239 audit companies and 790 natural persons. There were 809 natural persons and 94 legal persons with licenses to provide tax advisory services. These service providers are regulated under the Slovak Republics AML/CFT laws. Provision of
9. MONEYVAL Report on the Fourth Assessment Visit. 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 three review reports on Slovakia (in 2006, 2007 and 2009).
Introduction 19
notary, audit, law or tax advisory services is regulated by special laws. The Slovak Republic has advised that standalone company service providers that are not lawyers, auditors, tax advisors or notaries are rare in the Slovak Republic. 43. The Slovak Republics AML/CFT legislation is based on EU Directive 2005/60/EC of 26October 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 jednotka finannej polcie radu boja proti organizovanej kriminalite Prezdia 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
44. The Slovak financial administration is currently undergoing a major structural reform called the project UNITAS. The purpose of the project is to merge tax, customs and social security administration into one organisation. With effect from 1January 2012 the two separate authorities the Tax Directorate and the Customs Directorate of the Slovak Republic were merged into one institution (the new Financial Directorate of the Slovak Republic) in order to improve the effectiveness of the tax and customs administration. The Financial Directorate was also designated as the Slovak Republics Competent Authority for EOI purposes. 45. On 1January 2012, the new Act No.563/2009 Coll. on tax administration (also known as the Tax Code) replaced the Tax Administration Act (TAA) that was in force up to 31December 2011. The new act reiterates 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. 46. A new Administrative Cooperation Directive 2011/16/EU was adopted by the European Council on 15February 2011 and came into effect on 1January 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
20 Introduction
type of financial institution. The new Directive was transposed into Slovak law by Act No.442/2012 Coll. on international assistance and co-operation in administration of taxes (EOI Act). The EOI Act covers exchange of information under the Directive as well as exchange of information under EOI agreements. In addition to changes which follow from the new Directive, the new Act clarifies a few procedural issues, including interaction between the EOI Act and the Tax Code in cases where there is no domestic tax interest. 47. In January 2013 the Financial Directorate issued internal directive to ensure uniform procedures for requesting or providing information within the framework of international exchange of information upon request No.4/2012/1100204 (Internal EOI Directive). The Internal EOI Directive also defines technical and practical measures to ensure effectiveness of exchange of information including internal deadlines and standard request formats. The Internal EOI Directive came into force in January 2013.
Compliance with the Standards: AvailabilitY of Information 21
Compliance with the Standards
A. Availability of Information
Overview
48. 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 and implementation of the Slovak Republics legal and regulatory framework on availability of information. 49. 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 to conduct commercial activities, but continue to be regulated by the laws of their jurisdiction of incorporation. They are not expressly
22 Compliance with the Standards: AvailabilitY of Information

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. 50. 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 arises from the AML/CFT obligations on such professional service providers but it is not clear whether these AML/CFT obligations would ensure that the trust settlors and beneficiaries are fully identified. 51. 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. 52. 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 in the Commercial Register and appropriate sanctions apply to address the risk of non-compliance.10 53. 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). 54. In respect of banks and other financial institutions, a combination of the anti-money laundering/counter-financing of terrorism regime and 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
10. 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 EUR3310. Also see sectionA.1.6.
prohibited from establishing business relationships with or carrying out transactions for anonymous customers. 55. Over the period under review, the Slovak Republic received in total 519 requests. Out of these 81 requests were for ownership information (79 related to companies and two to partnerships), 217 requests for accounting information, 65 requests for banking information and 154 requests for other information related to individuals (such as tax residency status, identity information). The requested information was provided in all cases when the person in possession or control of the information was contactable or identifiable (see part C.5). Out of the 27 cases when the person in possession or control of the information was not contactable or identifiable 22 requests related to accounting information and five requests to banking information. Once the person holding the requested information was identified and contactable there was no case when the requested information was not available. Availability of information in the Slovak Republic was also confirmed by peers. 56. Overall, ownership, accounting and bank information is in practice available in the Slovak Republic. Effective enforcement measures and monitoring activities are taken by the supervisory bodies to ensure availability of information.
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.
57. 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 a list of documents needed for registration in the Commercial Register. 58. 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.
59. As from 1July 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 Article3(5) of Directive 2009/101/EC.
Companies (ToRA.1.1)
60. The Slovak Republics laws provide for the creation of the following types of companies: Private limited liability companies Private LLCs are regulated under PartIV 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 EUR5000 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). Since January 2013, a LLC cannot be established by a person who has tax or customs arrears (s.105b). An individual conducting business as a sole entrepreneur can be a single shareholder in up to three Slovak companies. There are 201789 LLCs registered in the Slovak Republic. Joint stock companies Joint stock companies are regulated under PartV 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. There are 7547 joint stock companies registered in the Slovak Republic.
European public limited liability companies (Societas Europaeas, SEs) SEs are regulated under Act No.562/2004. Pursuant to Article10 of the relevant EU legislation (Regulation No.2157/2001), the laws that apply to Slovak joint stock companies apply mutatis mutandis to SEs. There are 74 SEs operating in the Slovak Republic. European co-operative societies (SCEs) SCEs are regulated under Act No.91/2007. Pursuant to Article11 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). There are six SCEs operating in the Slovak Republic. 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. There are 2424 co-operatives registered in the Slovak Republic.
61. 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 the Commercial Code stipulate differently. The founders signature must be officially authenticated. The official authentication is carried out by a notary or municipal office (s.57 CC); the authenticity of signatures on the inscription proposal also needs 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 ajoint stock company shall be in aform of anotarial 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 ajoint stock company shall be in aform of anotarial deed (s.171 CC); in case of ajoint 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 anotarial deed (s.172 CC); the major decisions of the General Meeting of ajoint stock company are subject to a qualified majority voting and report of such General Meetings shall be in aform of anotarial 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 ajoint stock company which has asole shareholder have to be in aform of anotarial 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 aco-operative (which among other things adopts the Articles of Association) shall be in aform of anotarial deed (s.224 CC); and the decision of a General Meeting of a co-operative 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

62. 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 region 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 90days from its establishment or its receipt of a trade licence for limited liability companies and joint-stock companies. The company or co-operative obtains legal personality only upon its registration (s.64 CC). For joint-stock companies, the application must be signed by all members of the board of directors. 63. 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 offices11 inside the Slovak Republic (s.21, CC). 64. 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. 65. 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.
66. 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
11. A Registered Office in the context of the Commercial Code refers to the primary place of business of the company.

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). 67. 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. 68. 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. 69. A person authorised to act on behalf of a registered entity must no later than 30days after a change in relevant details apply to the Registration Court to change the registered data and include the updated information (s.5 Commercial Registration Act). No notarial deed is required to update the registered data. 70. 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). 71. 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.
In practice
72. Commercial Registers are maintained by courts of first instance (Okresn sd). There are eight such courts maintaining a Commercial Register, each for one of the eight regions in Slovakia. A company is registered by one of the register courts based on the region where it has its seat or place of business. Upon application by the company and check of the provided information, the Registration Court enters the required information into the Commercial Register database and archives the provided documentation. An application for registration has a standard format and obligatory attachments. Information contained in the Register is publicly available online.12 In order to be used for official proceedings (including tax or crime proceedings) information contained in the Register must be authorised by the respective Registration Court. 73. In order to register the company must complete registration form which includes information as prescribed by law (see above). The registration form for private LLCs (registration form no.7) includes information on the names, surnames, and residence address of members. Registration form for joint stock companies (registration form no.9) requires identification of shareholders if the joint stock company has only one shareholder. Identity of members of a co-operative is not included in the registration form (registration form no. 15). 74. The Registration Court establishes prior to the registration whether: the application has been filed by the entitled person; the application is complete; all required documents are attached to the application and in the form required by law; the information provided in the application for registration complies with information contained in documents attached to the application ; the court fee has been paid.
75. If the application for registration does not satisfy these conditions, the registry court notifies the applicant by issuing a notice of rejection of the entry. A person applying for the registration in the name of the company is liable upon conviction for any damage caused to third parties or to the company by providing wrong or incomplete information to the Register (e.g.wrong identification data, address, contact details).
12.
www.orsr.sk/.

76. In practice about 30% of companies register on-line. The same information must be provided as in the case of paper application. Standard formats are used. The person applying for registration of an entity needs to be identified by an authorised electronic signature. 77. Courts and other government authorities are obliged to report to the Registration Court cases where they find during performing their duties any discrepancy between the facts and information contained in the Commercial Register. Such reports mainly come from the Trade License Office and are frequent in practice. Most reported discrepancies relate to typographical errors or misspellings. Entities conducting business are required to report changes concerning their main activities to the Trade License Office. The reported information relates to the description of their business activity and includes the name of the entity and its seat. Based on reports from Courts or other authorities the Registration Court initiates court proceedings in order to achieve conformity of the entry in the Commercial Register with the actual state of affairs. If such proceedings are initiated by the Registration Court its decision to do so is provided to the registered person. The Registration Court can decide on the content of the entry without a hearing by issuing a resolution (s. 200a Code of Civil Procedure). Registration courts initiated such proceedings in 206 cases over the three year period under review. In all these instances sanctions under s.11 of the Commercial Registration Act were applied (see sectionA.1.6). 78. Compliance with registration obligations is further ensured by the fact that information contained in the register has legal value, e.g.the business entity receives its legal personality and the member his/her rights only upon entry into the Commercial Register (ss.62(1), 225 and 27(3) CC). Accordingly it is not possible for an entity to open a bank account, own any assets or receive dividend payments unless the entity is incorporated and the respective information is entered into the Register. It is also in the interest of a person acting on behalf of the company to be registered and keep registered information updated as required under s. 5 of the Commercial Registration Act since without being entered into the Register the person is not legally authorised to act on behalf of the registered entity and his/her acts are not legally binding on the company. Further, it is standard practice that a business partner verifies the identity of its partner through public information contained in the Commercial Register. 79. The level of compliance with registration obligations ensures that the ownership information required to be registered is available in Slovakia.
Foreign companies
80. 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). Such information is also not contained in the registration form (registration form 15). 81. For company law purposes, a foreign company incorporated in a foreign register is not treated as a Slovak company, unless it moves its registered office to the Slovak Republic (s. 21). If it has a registered office in the Slovak 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. There is no information available on how many foreign companies were incorporated in Slovakia due to moving their registered offices there. 82. Registration of branches in the Commercial Register is organised and carried out in the same way as in the case of domestic companies. The Registration Court establishes prior to the registration whether all required information is provided. The branch is required to report any changes. If it is reported by other government authorities or by other persons that the branch has not fulfilled its obligation and therefore there is a discrepancy between the registered information and the actual facts the Registration Court initiates proceedings to address the shortcoming and applies sanctions.
Tax Administration Act

83. 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).
13. An enterprise is defined under Section5 of the Commercial Code as tangible, intangible and personnel assets which are used in business but it is basically covered by the term branch.

84. 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 by the end of the month following the month in which the company was registered (s. 49a ITA). The information that must be submitted to the tax office includes business name, seat of business, business identification number, branches located in Slovakia, main scope of business, taxes for which they shall be registered, 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 30days of the date of change. 85. 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 related14; 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 Slovakincorporated company has one or more permanent establishments abroad, and (c) a Slovak-incorporated company is a subsidiary or parent of a foreignincorporated company.15 86. 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. 87. 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
14.
15.
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. Section2, 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 section18(1) of the Income Tax Act.
commercial companies which fulfil two of the following conditions: - - - the average headcount more than 2000; overall assets greater than EUR165 969 594; and annual turnover greater than EUR165 969 594.
88. Such taxpayers must keep full 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.
89. The taxpayer should maintain documentation on controlled transactions, which are significant. The appraisal of controlled transaction significance is up to taxpayer. 90. 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. 91. Any change in majority membership of LLCs is subject to approval by the tax administration (s.115(5) CC). Majority membership is defined as holding more than 50% of the LLC (s.115(7). The approval is based on verification of whether the transferee and the transferor have tax or customs debt (s.115(6). If so the transfer cannot be approved (s.105b). 92. 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. The Slovak authorities indicate that in practice it is very rare for such notes not to be provided. If Notes are not provided with the tax return as required sanctions under s.155(1) Tax Code apply. This

obligation will apply to a number of, but not all relevant foreign companies in the Slovak Republic.
In practice
93. Compliance with tax reporting obligations is monitored and supervised by the tax office. The compliance with tax return filing obligation was above 98% over the period under review. If the tax return is not filed within the statutory deadline the tax office issues a notice informing the taxpayer of his/her obligation and sanctions for late filing. About 0.08% of all tax returns is not filed after the notice is issued and sanctions for not filing the tax return are applied (see sectionA.1.6). All received income tax returns are checked to ascertain whether they contain the obligatory information. If the tax return is incomplete, the tax office issues a notice requiring additional information or clarification. The tax return was found incomplete in about 1.13% of filed tax returns over the period under review and in about 15% of incomplete returns the missing information was provided upon notice from the tax office. If the information is not provided upon receipt of notice the tax office uses its information gathering powers to obtain the missing information, for example through a local inquiry or tax audit. If the taxpayer does not provide the requested information or is otherwise uncooperative sanctions are applied (see sectionA.1.6). Further, the tax administration verifies information provided through checking against information contained in the tax database and through research and monitoring activities which may include use of public sources or third party reporting. The level of compliance with tax registration obligations was over 97% for the period under review. 94. All information that is relevant for the administration of taxes is contained in the tax database. The tax database comprises several modules: RDS a data warehouse containing information obtained on the basis of tax filing obligations and from information gathering measures taken in the course of tax administration (e.g.tax registrations, tax returns, tax audit reports, interviews, third party reporting). VIES the EU information system containing information regarding VAT registered entities and intra-Community supplies. EUROFISC EU mechanism for combating organised VAT fraud providing a platform for quick and targeted sharing of information between all EU Member States on fraudulent activities. Crime Reporting Database a database allowing sharing of information between law enforcement agencies and the tax administration on suspected tax crimes.
AML Database an information warehouse containing reports from AML authorities on fraudulent activities.
95. The RDS contains a vast volume of information received from third parties or open sources. The database is linked to the Commercial Register and is updated every 24 hours. Banks are required to report monthly to the tax administration all newly opened business accounts. The reported information contains identity details of the owner of the bank account and the account number. 96. There is no statutory limit on the time the information can be kept in the RDS. In practice, the information is not deleted and all historical data on taxpayers are kept. 97. The tax administration uses several IT tools to retrieve ownership information from the database. The most frequently used tool for EOI purposes is the data mining application allowing officials to search for defined sets of information through all modules of the database including identity or ownership information. Entities are identified based on one or more criteria such as name, TIN, business identification number, registered address or, in the case of individuals, the name and date of birth or birth certificate number (if the name is not unique). Another IT tool frequently used by tax auditors is the analytical system AISR. The system allows the finding of specified links between data contained in the database based for example on names of directors or members of statutory bodies or allows for verification of suspicious transactions. 98. The practical application of tax obligations ensures that ownership information required for administration and enforcement of tax laws is available in the Slovak Republic.
Information required to be held by companies

99. 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 (s.118(2)).16
16.
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.

100. 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. 101. 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) 102. 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 Security Depository, a joint stock company established and regulated under Section99(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. There is only one Central Depository licensed in the Slovak Republic and there are no plans to enlarge the number. 103. For ownership information relating to bearer shares, please see the section on bearer shares below. 104. 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) 105. 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.
In practice
106. Companies compliance with requirements to maintain ownership information is ensured mainly by the need to maintain the register of shareholders to properly handle their affairs with shareholders or members. In addition, information contained in the register of shareholders of joint stock
17. Section156 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.
companies has legal value and membership transfer in a co-operative is legally effective only by submitting the contract to the co-operative (ss.156(6) and 230 CC). If the register is not kept properly the company is liable for any damage caused to the shareholder transferring a share and to the transferee of the share (s.156 (7)) (see sectionA.1.6). Although the government authorities do not directly supervise companies compliance with the requirement to maintain a register of shareholders or list of members, information on shareholders is frequently checked during tax audits and if such information is not made available to the tax administration sanctions under s. 38 of the Accounting Act are applied (see sectionA.1.6).
Information held by service providers

107. 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 2July 2008 on the Prevention of Legalisation 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 Security 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 distrainer18; 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

18.
A person who seizes or holds property to compel the repayment of debts.

company, management or safekeeping of funds, securities or other 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.
108. 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.
109. 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 includes foreign trusts administered or having a trustee in the Slovak Republic and the AML rules are applied in practice accordingly (see part A.1.4). 110. 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. 111. 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. 112. 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.
In practice
113. Supervision of obligations under the AML rules is carried out by the National Bank of Slovakia in respect of bank and financial institutions, by the Ministry of Finance in respect of lotteries and gambling and by the FIU, which supervises DNFBPs and foundations and has an overall supervisory role. Supervision is mostly performed through on-site visits and desk audits which take a risk based approach. If failure to comply with any of the obligations is detected, the deficiency is indicated in the report and time is given to the service provider to address the issue. If the deficiency is not addressed

in due time fines are imposed. The most common deficiency is that service providers do not notify the FIU about suspected operations or clients. 114. During on-site visits the supervisory authorities follow a standard procedure including a checklist based on AML obligations and other relevant laws (e.g.banking law, law on advocates and notaries). The on-site visit focuses mainly on the organisational and procedural set up of AML measures and includes checking of CDD and transactional documentation kept by the service provider. The authorities take a sample of clients and operations to check measures in place for the identification of the customer (including whether copies of ID cards or passports are kept, whether there are documents identifying the beneficiaries) and measures taken to identify money laundering transactions. The authorities also monitor how the compliance officer notifies the FIU in cases of suspicious or unusual transactions. 115. The FIU conducted 36 on-site inspections in 2010, 41 in 2011 and 22 in 2012 representing about 1.5% of all DNFBPs inspected over the indicated period. Sanctions were applied in 15, 26 and 12 cases respectively. The total fines applied were EUR18050, EUR76100 and EUR117800. The decrease in number of inspections between 2011 and 2012 was caused by a significant increase in the number of unusual operations reports processed by the FIU and by implementation of a newly developed internal information system. The FIU received 2470 unusual operations reports in 2010, 2982 in 2011 and 3600 in 2012. Out of them 549 were forwarded to the financial administration in 2010, 929 in 2011 and 1231 in 2012. No serious deficiencies were identified in the period under review by the National Bank of Slovakia or Ministry of Finance and accordingly no sanctions were applied. Based on the on-site inspection carried out in the second half of 2012, the National Bank issued a recommendation to one bank. Since the recommendation was not addressed by the bank legal proceedings for imposition of sanctions have been launched.
Nominee identity information

116. 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
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
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). 117. The same supervisory measures are applied in respect of service providers operating as professional nominees as in respect of other service providers (see above). During the review period the FIU came across nine cases where a person held assets on behalf of somebody else based on a custodian or similar contract. In these cases the FIU checked the contractual and CDD documentation. In all these cases the required documentation was kept and the FIU reported these cases to the financial administration. These cases mostly relates to nominee directors. 118. 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. This has been confirmed in the course of the Phase2 review where no such case has been identified either in the domestic or EOI context during the last five years. Legal uncertainty relating to such an arrangement seems to be the main factor limiting the materiality of the legal gap.
Conclusion
119. 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). 120. In practice, ownership information in respect of companies is available on the basis of commercial and tax law obligations. The requested information is obtained directly from the person concerned or contained in the Commercial Register or in the tax database. The Slovak Republic was requested to provide ownership information regarding companies in 79cases over the period under review. No requests related to foreign companies having a nexus with the Slovak Republic. In all cases the information was provided. Availability of ownership information in Slovakia was confirmed by peers.
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 (ToRA.1.2)

121. 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 Security 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 bearer shares. Shareholders were given until the end of 1999 to either to make their bearer shares take the form of book entry shares or convert their shares to registered form, after which time any remaining joint stock companies with shares in bearer form would be compulsorily dissolved and liquidated (s.768b, CC). No company has been dissolved or liquidated due to failure to convert its shares into registered form. This law effectively immobilises or converts all bearer shares in the Slovak Republic and ensures that ownership and identity information of bearer share owners is available. 122. Bearer shares can be issued only in dematerialised form, i.e.as bookentry shares. All these shares are in the Central Depository. Entry into the Central Depositorys register of shareholders confers legal ownership, i.e.the transfer of a share has no legal effect unless the new owner is entered into the register (s.22, Act on Securities and Investment Services). Transfer of bookentry shares is subject to the same conditions set by legislation and the Rules of Operations of the Central Securities Depository of the Slovak Republic as any other transfer of book-entry security. It means that when the share has been traded on the Stock Exchange, the trade must be settled in the Central Securities Depository within three days from the day when the trade was concluded. In practice, the Stock Exchange submits information on concluded trades to the depository after closure of trading on the day when the trade was concluded. If a trade of shares admitted to trading at the Stock Exchange is concluded outside of the Stock Exchange (OTCtrade) the trade is reported for settlement to the Stock Exchange within a deadline of 15days from the day when it was concluded. In the case of an OTC trade in shares that are not admitted to trading at the Stock Exchange, the deadline for their settlement is seven days from concluding the agreement unless the seller and the buyer agree otherwise. Transfer instructions in case of OTC trades are submitted to the depository by the buyer and the seller and have to be matched by the Central Depository. There is no sanction for breaking deadlines for reporting transfers, however, the buyer cannot claim dividends from the period before
being registered as owner of the share by the Central Depository and no delays have been encountered in practice. 123. The Central Depository is licensed and supervised by the National Bank of the Slovak Republic. It is a joint stock company fully owned by the stock exchange. The Central Depository registers all types of securities such as bond issues, treasury bills or coupons and carries out clearing operations. The Central Depository maintains three types of accounts: Owner accounts contain information on the security registered (e.g.type of security and its issuance number) and identification of its owner, i.e.for legal persons business name or name, identification number and registered office or for individuals name, birth certificate number and permanent residence. Members client accounts register data on securities where the owners are registered by the member of the Central Depository. The member itself does not own the securities kept in its client account. Holders accounts contains information on nominee holders of securities. The holders account can be opened only to the central depository, a securities dealer or a bank authorised to perform service of custodianship.
124. The Central Depositorys compliance is monitored by the National Bank. Minor deficiency concerning interpretation of specific technical information required to be kept was identified and remedied in 2009. Otherwise no deficiencies were found.
Partnerships (ToRA.1.3)
125. 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). There are currently 1256 GPs registered in the Slovak Republic. 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). There are 984 LPs registered in the Slovak Republic. 126. There are also European Economic Interest Groupings (EEIGs) (Council Regulation (EEC) No.2137/85 of 25July 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. There are nine EEIGs registered in the Slovak Republic. 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 30days 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. 127. 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

128. Like companies, both general partnerships and limited partnerships are incorporated when entered into the Commercial Register of the competent Registration 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 90days 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). 129. 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).
130. 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.
131. 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. 132. Registration of general and limited partnerships is organised in the same way as for companies. There is no difference in registration procedures for general or limited partnerships. Information on general or limited partners is provided upon registration and kept updated. Electronic registration is available also for partnerships. Court proceedings are initiated in order to achieve conformity of the entry in the Commercial Register with the actual state of affairs. There are about 100 such proceedings initiated in respect of partnerships per year (4.5% of all partnerships). 133. Limited partnerships are required to register with the tax authority pursuant to s.49a of ITA. Limited partnerships are considered taxable parties and as such they are subject to inspection by the financial 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.36 Tax Code). 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. 134. In practice, the tax registration of partnerships follows the same procedures as for companies (see sectionA.1.1). The identity of all partners of general or limited partnerships is entered into the tax database upon registration of the partnership and is kept updated. The level of compliance with tax registration obligations was over 97% for the period under review.

135. 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.15 Tax Code). 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. Therefore, information on whether a partner is general or limited is required upon registration and entered in the tax database. Any subsequent change is reported.
Ownership and identity information required to be held by partnerships

136. 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. Further, information on the identities of all partners is contained in the memorandum of association and necessary for proper administering of the partnership.
Conclusion
137. 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. 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. 138. Respective legal provisions are properly implemented in the Slovak Republic to ensure that ownership information regarding partnerships is available (see also sectionA.1.6). Over the period under review the Slovak Republic received two requests for ownership information regarding partnerships and in both cases the requested information was provided.
Trusts (ToRA.1.4)
139. 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
20. www.hcch.net/index_en.php?act=conventions.text&cid=59.
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. 140. 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. 141. 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. 142. 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). 143. 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. 144. 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. 145. In practice the AML authorities have not come across a Slovak trustee operating a foreign trust. However, application of CDD measures under ss.7, 9 and 10 AML Act requires the service provider to keep contractual documentation, i.e.in this case a trust deed which should normally include identification of settlors and beneficiaries (based on law under which the trust is created). The service provider is further obliged to identify his/her client
21. See paragraph109.

and persons on whose behalf he/she acts. It is the practice of the AML supervisory bodies to check service providers compliance with CDD obligations during on-site audits. 146. Non-professional trustees of foreign trusts are not regulated under Slovak AML laws. The Slovak Republic authorities have advised that such trustees (if any) are rare and they have not been encountered in any instances. The Slovak authorities also do not see any practical situation in which it would be reasonable to engage a Slovak non-professional trustee, due to legal uncertainty about such an arrangement. 147. 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 information in the context of trusts would necessarily include the identity of the trust settlors and beneficiaries. The Slovak authorities have advised that such foreign trusts are rare in the Slovak Republic and have never been encountered in practice. The Slovak Republic has received no requests for information relating to a trust operated by a Slovak trustee during the period under review.
Foundations (ToRA.1.5)
148. 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 EUR6 638. There are 933 foundations registered in the Slovak Republic. 149. 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)). 150. 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). 151. 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. 152. 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

153. 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.

154. 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 EUR331 (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.
155. In practice, the Register of Foundations is kept by the Ministry of the Interior of the Slovak Republic. The Ministry of the Interior is also responsible for the supervision of obligations and application of sanctions under the Foundations Act. Supervision is based on desk audits of each foundation. A desk audit consists of analysis of information provided by the foundation for the current year (i.e.the annual report), upon registration and other information provided throughout existence of the foundation. The main focus of such analysis is whether the foundation is managed according to the foundation deed and whether it distributes its funds in line with its purpose. Therefore, information allowing identification of founders, members of the foundation council and beneficiaries must be available in the Register and is provided by foundations in all cases. The Foundation Register is publicly available on the internet.22 156. About 4% of foundations fail to submit annual report on time. According to the law on foundations a foundation has until the 31st May of each year to submit the annual report. If the foundation fails to submit a report within the statutory deadline sanction automatically applies. There
22. http://portal.ives.sk/registre/startrnd.do.
were 34 foundations on which sanction was applied in 2010, 41 in 2011 and 45 in 2012. The amount of fine depends on the number of cases (i.e.years) where the foundation failed to submit the report within the statutory deadline. The minimum fine is EUR331 and maximum EUR3319. The total amount of applied fines in 2010, 2011 and 2012 was EUR16550, EUR18536 and EUR21846 respectively. After lapse of the statutory deadline the Ministry of Interior issues a notice informing the foundation of its failure, imposition of a fine and additional 15day period for submitting the annual report. If the report is not submitted within 15days after lapse of the additional 15day period the Ministry of Interior files a proposal to the court to liquidate the foundation. There are about 10 such cases per year. The most common shortcomings identified during the period under review include failure to submit annual financial statements or other obligatory parts of the annual report. This is the case for about 160 foundations per year (17% of all foundations). Although in about 95% of these cases deficiencies are remedied upon notice to the foundation and sanctions do not then need to be applied, Slovakia is recommended to consider applying sanctions in cases where missing information is not provided.
Tax laws
157. Foundations that derive taxable income must register and file tax returns with the tax authority. Registration for tax purposes is ensured in the same way as for other taxable entities. Information that needs to be submitted does not include ownership information.
Anti-money laundering legislation

158. 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. 159. 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. Foundations compliance with these obligations is supervised by the FIU. The FIU conducted eight on-site inspections of foundations in

2011, two on-site inspections in 2012 and one on-site inspection in the first half of 2013 resulting in only 1.2% of all foundations being inspected by the FIU during the indicated period. However, identified deficiencies were only of a formal nature and sanctions were applied.
Conclusion
160. In conclusion, the Slovak Republics legal and regulatory framework, in particular the Foundations Act and its practical implementation ensure the availability of information on the founders, the members of the foundations board, the directors and any other beneficiaries. No EOI request relating to foundations was received over the period under review.
Enforcement provisions to ensure availability of information (ToRA.1.6)

161. 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. 162. 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 EUR3310 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). In practice, these fines are applied directly by the respective court maintaining the commercial register. The registration courts applied sanctions under s.11 of the Commercial Registration Act in 40 cases in 2009, 24 cases in 2010, 79 cases in 2011 and 63 cases in 2012. The total amount of sanctions applied is not centrally available. a taxable party that does not comply with its registration or reporting duty under s.49a of the ITA, or a registration or reporting duty under a special act, is subject to a fine of not less than EUR60 and not more than EUR20000 for failure to fulfil its registration duty (s.155(1) Tax Code); or from EUR30 up to EUR3000 for failure to fulfil its reporting duty (s.155(1) Tax Code). Till January 2012 these sanctions were provided for under s. 35(7) TAA. In practice, these
sanctions were applied in 2877 cases in the period from July 2009 to December 2009, in 5433 cases in 2010, 5208 cases in 2011 and in 19 cases in the period from January 2012 to June 2012. The total amount of sanctions applied for the same periods was EUR249566, EUR429261, EUR420565 and EUR3100. The sharp decline in number of cases and amount of sanctions applied in the first half of 2012 was caused by organisational changes within the financial administration and resulting flaws in newly set up IT systems. The problem was solved since the second half of 2012. an obliged entity which fails to conduct appropriate customer due diligence on its customers is liable to a fine of up to EUR165969 (s.33, AML Act). In practice, this sanction was applied in 14 cases during the period under review. During this period the FIU conducted about 75 on-site inspections. The total amount of fines applied was EUR124500. In 2012 there were 22 inspections carried out by the FIU, which applied sanctions in 12 cases, totalling EUR83 800. 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). Pursuant to s. 15 the Ministry of the Interior may file an application for cancelling the registration of a foundation to a relevant court. In the period under review the Ministry of the Interior filed 28 such applications to court. Most of the foundations were dormant and were liquidated. 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 EUR66387 (s. 33 AML Act). The FIU did not detect any failure or breach to comply with this obligation and therefore no fine was imposed. 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)). Information on the exact number of cases where a shareholder claimed damage caused by a company which had not entered him/her into the list of shareholders is not available. However, such cases are considered by the Slovak authorities to be very rare. 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 EUR663878. (s. 144). There was no case when the fine was applied in practice. There was one occasion in 2009 when shortcomings of a technical nature were identified and appropriate measures were taken to address the identified issue. A taxable party that fails to file a tax return is liable to a fine of between EUR30 and EUR32000 (155(1) Tax Code) Till January 2012 this sanction was stipulated under s. 35 TAA. In practice, the fine was applied in 16933 cases in the period from July 2009 to December 2009, in 19774 cases in 2010, in 20959 cases in 2011. The amount of fines applied for the same periods was EUR26.7million, EUR31.4million, EUR31.8million.
163. There are no direct financial sanctions for private LLCs, joint stock companies and co-operatives that fail to maintain a register of members/ shareholders since shareholder rights are constituted by being entered in the Commercial Register in the case of LLCs or being entered in the list of shareholders in the case of joint stock companies and co-operatives. In addition, LLCs, joint stock companies and co-operatives must submit any changes in their memorandum of association, or establishment deed to the Commercial Register. This includes any changes in private LLCs members/shareholders since the memorandum of association must contain the identity of all the shareholders/members of the private LLC. Sanctions for not submitting such information are mentioned above.
Conclusion
164. The Slovak Republics commercial and AML legislation includes 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. However, transferee can acquire shareholder rights only upon being registered in the Commercial Register or in the list of shareholders. Where enforcement provisions exist, they are adequately applied in practice and ensure that ownership information with regard to the relevant entities is available.
Determination and factors underlying recommendations

Phase1 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. 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 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.
Phase2 Rating Largely compliant.
A.2. Accounting records

Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements.
General requirements (ToRA.2.1), Underlying documentation (ToRA.2.2) and 5-year retention standard (ToRA.2.3) Accounting Act
165. 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 persons23 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.
166. 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; all cash receipts and expenditures; and profit or loss of the accounting entity.
167. 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). 168. 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
169. The Slovak authorities have advised that the above accounting records refer to underlying documents such as invoices and contracts (s.10).
23. 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.
170. 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).
In practice
171. Accounting information is available in the Commercial Register, in the tax database and with the obligated entity. Compliance with accounting obligations under the Accounting Act is supervised by the financial administration (see below) and by Registration Courts monitoring filing obligations with the Commercial Registrar, where annual financial statements must be filed. Based on the newly adopted law, an electronic Register of Financial Statements will be set up in January 2014. The Register will integrate information provided to the financial administration and to the Commercial Registrar. In 2012 there were 206 entities that failed to file their annual financial statements with the Commercial Registrar. The total amount of fines for failing to file financial statements applied by the registration courts for the same year was EUR 307897. 172. The financial administration carries out supervisory measures and applies sanctions as detailed below. In addition, the financial administration also conducts preventative measures. A dedicated website has been established on the financial administration portal containing all legal and practical information on accounting obligations in the Slovak Republic.24 The information is periodically updated. The obligated entities can also turn directly to the financial administration with their individual queries through the call centre or via post or electronically. 173. 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 2% of its total assets. Breaches of other obligations stated above attract a fine of up to 2% of an accounting entitys total assets (s.38 Accounting Act). The financial administration applied sanction under s.38 in 476 cases during the period from July 2009 to December 2009, in 729 cases in 2010, in 679 cases in 2011 and in 98 cases in the period since January 2012 to June 2012. The total amount of fines applied was EUR0.7million, EUR1.5million, EUR3.9million and EUR0.2million respectively. The decline in number of cases and amount of sanctions applied in the first half of 2012 was caused by organisational changes within the financial administration (see part A.1.6).
24.
www.finance.gov.sk/Default.aspx?CatID=8618.
Income Tax Act

174. 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). 175. As Slovakia is an EU Member State and hence part of the intracommunity VAT system, Slovak undertakings must further fulfil specific requirements regarding documentary evidence of transactions performed. Among other things, they must keep all documents from which intra-community flows of goods and services can be traced, and, more generally, all invoices. 176. The financial administration supervises compliance with accounting obligations during the course of tax administration and tax audits. Tax audits adopt a risk based approach and are also carried out where there are discrepancies between information provided in the tax return and the actual facts on the ground. Such entities are typically persons declaring tax losses for several years or not filing tax returns. The financial administration also receives reports on suspicious entities from the police, the FIU, the Trade Licence Office or other government authorities. 177. During the period under review the financial administration conducted 1878 tax audits focused on accounting where deficiencies were found and sanctions including additional tax were applied. Applied sanctions amounted to EUR6363776. 178. All accounting information received for tax purposes is stored in a file of taxpayers. This information includes tax returns with annual financial statements, tax reports and other accounting information gathered during the course of tax administration such as accounting books, contracts and invoices.
179. The financial 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.51 Tax Code). Taxpayers entitled to deduct expenses from their taxable income are specifically required to keep chronological records of their income, inventories and debts receivable (s.6 para 10 ITA). 180. During the period under review the financial administration imposed obligations to keep additional records in 368 cases. The record keeping obligations related among other things to records of shortages and damages, records of expenditure on motor vehicles included in the commercial property associated with the operation of a motor vehicle, specific records of acquisition and sale of used motor vehicles necessary for the correct determination of value added tax, attachments to invoices issued with a breakdown of type and amount of material used; information about transactions which the taxpayer realised in the specified period with non-resident related parties in the following classification: intangible assets (purchase/sale), tangible assets (purchase/sale), financial assets (purchase/sale), reinsurance in structured life and non-life insurance (prescribed/assigned), credits and loans (received/provided), services (received/rendered), dividends (received/paid) and royalties (received/paid) separately for each nonresident related party.
Accounting records for trusts

181. 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). In practice, there is no experience with a Slovak settlor, trustee or beneficiary of a foreign trust.
Accounting records to be kept by service providers

182. 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 is implemented in practice as including documents underlying the transactions. 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). 183. Supervision of service providers obligations to keep transaction records is carried out in the same way as supervision of their CDD measures. The FIU, the National Bank of Slovakia and the Ministry Finance conduct on-site inspections which include control of record keeping requirements.
Conclusion
184. 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. 185. The Slovak Republics legal and regulatory framework is adequately applied to ensure availability of accounting information. This has been confirmed by EOI in practice. The Slovak Republic provided accounting information in 195 cases during the period under review. Of these, 193 requests related to accounting information in respect of companies and two related to partnerships. The requested information was not provided in 22 cases during the period under review when the person holding the requested information was not contactable (further see C.5). No peer indicated any issue regarding availability of accounting information in Slovakia.

Phase1 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. Compliant. Recommendations The Slovak Republic should ensure that such accounting records are maintained for a minimum of five years for any foreign trusts which have Slovakresident administrators or trustees.
Phase2 rating
A.3. Banking information

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

186. 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). 187. 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).25 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 188. 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. 189. In addition, banks are required to maintain adequate records in order to fulfil tax requirements under the EU Savings Directive to report automatically the identity and residence, the account number and information concerning interest payments to account holders that are not resident in the Slovak Republic but are residents in other EU member states. 190. 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 EUR165 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 EUR99 581 (s.33). No deficiencies of this type were detected during the period under review and therefore the sanction was not applied. 191. Supervisory measures in respect of availability of banking information are carried out by the National Bank of the Slovak Republic and the FIU (see sectionA.11). There are in total 29 banks or financial institutions. Each bank was subject to an on-site inspection during the last two years and is under desk based continuous monitoring by the National Bank. After each on-site inspection a report is prepared. If deficiencies breaking the law are identified sanctions are applied and measures to address the identified issues are requested. If these deficiencies are not in breach of the law but only best practices required by the regulator then only recommendations are given to address the issue within the prescribed deadline. According to the Slovak
25. 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).
authorities the deficiencies found during the last three years were of a minor nature and banks are very responsive in addressing recommendations. The most severe deficiencies detected related to insufficient reporting of unusual transactions to the FIU. 192. On-site inspections are carried out also by the FIU. The FIU conducted 41 on-site inspections in the financial sector in 2011 and 22 in 2012. The most common deficiency related to not keeping sufficient CDD documentation. In 11 cases sanctions amounting to a total of EUR76100 were applied in 2011. In 2012, there were 12 cases where sanction were applied and the total amount of sanctions applied was EUR117800. 193. The Slovak Republic provided banking information in 60 cases during the period under review. No issue has been indicated by peers regarding availability of banking information in the Slovak Republic. In view of the above, it is concluded that legal framework and its practical implementation ensure that banking information is available in the Slovak Republic.
Phase1 determination The element is in place. Phase2 rating Compliant.
Compliance with the Standards: Access to Information 65
B. Access to Information
Overview
194. 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 and its implementation in practice gives to the 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. 195. The Slovak Republic competent authority is the Financial Directorate as designated by the Ministry of Finance (s. 4(1) EOI Act). The competent authority, through the financial 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. 196. These powers are exercised to obtain all information relevant for the administration of taxes, including foreign taxes as has been confirmed in practice. 197. The financial administration uses various sources to obtain the requested information. The main sources of information are the tax database, taxpayers file and the Commercial Register. Specific information is also held by other government authorities such as information on the identity of individuals, ownership of real estates etc. The tax auditor always uses the most effective way to obtain the requested information. The taxpayer or third party holding or controlling the information is usually only contacted when it is not available from other sources.
66 Compliance with the Standards: Access to Information

198. Taxpayers and third parties need not be notified when an inspection is to be carried out at their premises. The application of rights and safeguards is compatible with effective exchange of information. 199. 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. However, there was no case in practice during the period under review when the requested information was not provided because of professional privilege.
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).
The Slovak Republics competent authority

200. The Slovak Republics competent authority for exchange of information is the Central Liaison Office Unit (CLO Unit) situated in the anti-fraud department of the Financial Directorate. The CLO Unit is responsible for exchange of information in the field of direct and indirect taxes. The CLO unit is staffed with 13 persons including the head of the unit. Out of these two officials are responsible for assistance in the field of direct taxation. One person deals with exchange of information on request and spontaneous information exchange and one person handles automatic exchange. The CLO Unit has an established network of 20 contact persons located throughout the nine local tax offices. The contact persons are responsible for co-ordination between tax auditors gathering the requested information at the local level and the CLO Unit.
Ownership and identity information (ToRB.1.1) and Accounting records (ToRB.1.2)

201. The main sources of ownership information for the purposes of tax administration are: the Commercial Register ownership information on companies and partnerships;
the tax database all information filed with the financial administration and gathered in the process of tax assessments (e.g.ownership information contained in annual financial statements, transfer pricing documentation); the taxpayer or third party; other government authorities such as the Trading Licence Office, Register of Foundations, Register of Citizens, Register of Real Estates or Register of Cars; public sources.
202. The tax auditor always uses the most effective way to obtain the requested information. The primary source of information is the tax database, if the requested information is not available there, then it can be filed with the Commercial Registrar (e.g.notes from general meetings). Specific information is also held by other government authorities such as information on the identity of individuals, ownership of real estate etc. If these options fail public sources are used. The taxpayer or third party holding or controlling the information is usually contacted when it is not available from other sources which is the majority of cases. 203. from Over the period under review, the requested information was obtained the person subject to the enquiry in 70% of requests; sources already at the disposal of the financial administration in 15% of requests; sources available to the CLO Unit in 5% of requests; other government authorities in 5% of request; third parties in 5% of requests.
204. Under the Tax Code, the Slovak financial administration has broad powers to obtain a wide variety of information for Slovak financial administration purposes. Local tax offices, municipalities and customs offices are all considered as financial administrators and enjoy the same powers with reference to the taxes and duties that are within their competence as the financial administration (s. 4(1) Tax Code). They can collect information from the taxpayer and other persons,26 collect documents and carry out onsite inspections.
26. Under the Tax Code, a taxable party means a party, to which the Tax Code or other tax act impose obligations or confers rights (s.4(2)). The term taxpayer means a party, which transfers to the tax administration any tax collected or

205. In particular, the financial administration can conduct local inquiries (ss.37-39 Tax Code); tax audits (ss.44-47); or issue summons (s.20).
206. During a local enquiry the tax auditor has unlimited access to the taxpayers premises, to accounting documents, records and information, including those stored on electronic media. The auditor can make extracts or copies of the relevant documentation, secure objects needed as evidence or make audio-visual records or photographic documentation from the enquiry. The taxpayer is obliged to provide assistance and co-operation necessary for efficient performance of the local enquiry. A local inquiry is the most commonly used power for EOI purposes (ss.38, 39 Tax Code). 207. During tax audits the taxpayer is obliged to provide the requested information, submit any requested records as well as other documents verifying economic operations and accounting practices, in the form requested by the tax administrator. The requested items may include any records and recordings which the tax administrator ordered him to keep. The taxpayer is obliged to provide oral or written explanations concerning the provided items and submit evidence supporting his statements. The taxpayer is also obliged to enable access to communication means which the taxable entity uses for his business activity (s.45 Tax Code). The tax audits are used in more complex EOI cases which require intensive co-operation with the taxpayer and involve several entities. 208. The tax auditor can also summon a person whose personal participation is necessary for the purposes of tax administration (s.20 Tax Code). This power is used in cases where oral explanation from the taxpayer or third person is sufficient for obtaining the requested information. It is not used frequently for EOI purposes. 209. The financial 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.26 Tax Code). Public inspection authorities are required to disclose to the financial
withheld from the taxable party, and which is liable for the payment of such a tax (s.2 ITA). 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.
administration the findings of their inspections, if such findings suggest that there is or there may be a breach of tax liability (s. 26(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.26(47)). 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 10days of the end of the calendar month in which the account was opened or closed (s.90, Banking Act). 210. Finally, the financial 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.36 Tax Code). When performing these checks, tax officials enjoy the same powers they are entitled to during an on-site inspection. 211. The International Assistance and Cooperation in Administration of Taxes Act (442/2012) (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.15). The scope of co-operation is wide and covers all the taxes that may be covered by any particular agreement (s.3). 212. 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. Further, if the taxpayer can be identified (e.g.by name and address, name and birth date, unique name, TIN, or passport number) it is not necessary to provide in the request an account number. In most cases account numbers are provided by Slovakias treaty partners which significantly facilitates processing of the request but there have been cases when neither the name of the bank nor the account number were provided and the requested banking information was obtained nevertheless.
Use of information gathering measures absent domestic tax interest (ToRB.1.3)

213. 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. 214. The EOI Act provides for exchange of information under the EU EOI mechanisms and under Slovakias international treaties and clarifies interaction between the EOI Act and the Tax Code in cases where there is no domestic tax interest. Under the EOI Act, the competent authority of the Slovak Republic may provide the requesting competent authority with any information which can be collected for the purposes of tax administration (s. 2). Newly introduced section22 of the EOI Act which came into force on 1January 2013 further specifies that exchange of information should be provided in the scope of the respective EOI agreement by way of measures provided for by the Tax Code for domestic cases unless the EOI Act says otherwise. There is no provision in the EOI Act which indicates domestic tax interest as a condition for obtaining and providing the requested information. It also means that the financial administration can use its information gathering measures as provided for by the Tax Code in respect of all persons within Slovakias territorial jurisdiction in possession or control of the requested information. This is confirmed in point 8.5 of the Internal EOI Directive which states that in obtaining and gathering the relevant information as requested under the respective EOI agreement the tax auditor shall use the same sources and administrative procedures as those used to obtain information for domestic purposes. 215. The financial administration can use all their information gathering powers for EOI purposes regardless of their domestic statute of limitation. The statute of limitation for domestic purposes is 10 years from the end of the taxable period or taxable event to which the requested information relates (s.69(5) Tax Code). Even after the lapsing of this statutory limitation period the financial administration can provide information which it already has at its disposal and can conduct research activities, local inquiries or tax audits. 216. Upon the receipt of a request, the competent authority (the Financial Directorate) will determine the appropriate government authority (in most cases the financial 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 financial administration does not distinguish whether a query from the Financial Directorate originates from the Slovak Republic or a foreign jurisdiction. Relevant information obtained by the financial administration is passed on to the CLO unit, which transmits it to the requesting jurisdiction.
217. In practice, the Slovak Republic received 11 requests over the period under review where the requested information related to a person which had no nexus with the Slovak Republic for tax purposes and the requested information was always provided. No issue of domestic tax interest was indicated by peers either.
Enforcement provisions to compel production and access to information (ToRB.1.4)

218. If necessary to verify certain facts that are relevant for tax purposes, tax officials can seize goods and property including documents and files (s. 40 Tax Code). In the period under review local tax offices used search and seizure powers in 31 cases. All cases were for domestic tax purposes. Equally, if strictly necessary to ensure that an inspection reaches its purpose, the financial administration may issue an injunction obliging the taxable party to take action, refrain from an action or tolerate an action (s.50). An appeal can be filed against the decision ordering an injunction but it does not have deferring effect (s.50(3)). Injunctions were issued in 591 cases in 2009, 565 cases in 2010 and 585 cases in 2011. 219. 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 financial administration. Following this, the criminal authority will commence the criminal proceedings and proceed with the investigation of the taxable person. The financial administration filed 2467 suspicion reports in 2009, 1922 in 2010 and 1826 in 2011. Criminal authorities frequently 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. 220. Taxpayers or third parties that fail to comply with their obligations under the Tax Code (including not providing the necessary information to the Slovak tax authority) are liable to a fine of between EUR60 and EUR3000 which can be applied repeatedly (s.155(1)). Fines for failure to comply with procedural tax obligations were applied in 58 cases in the second half of 2009, in 91 cases in 2010, in 87 cases in 2011 and in 19 cases in the first half of 2012. The total amount of fines imposed for the same periods was EUR20938, EUR16390, EUR152180 and EUR2646. 221. A new criminal offence, perverting the course of tax administration, was introduced in January 2013. If a person submits false or grossly misleading information, conceals information decisive for correct assessment of taxes, modifies or damages documents relevant for tax purposes or does not meet his/ her legal obligation during a tax audit it can be punished by imprisonment from two to eight years (s.278a(1) Criminal Act). It is unclear whether this offence

can be applied for purely EOI cases, however, the Slovak authorities stated that the offence subsumes also breach of obligations during tax audit which can be performed solely for the purpose of EOI and therefore this sanction should be applicable also in such cases. Since the offence was introduced only recently no information on its practical application and effectiveness is available. 222. In addition to the fine inflicted under the Tax Code or Criminal Act, 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 EUR3300 and EUR332000, and in case of a recurrent or serious default, it may be up to EUR664000 (s.50(1) d Banking Act). In practice no such fine was imposed by the National Bank during the period under review. The Slovak authorities are also not aware of any instance when a bank has failed to comply with obligations to provide information required for tax purposes.
Secrecy provisions (ToRB.1.5) Financial institutions

223. Confidentiality of bank information is protected under section91 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. 224. 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 Tax Code. 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. 225. 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 is 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. 226. In practice, banking information is obtained directly from banks by the local tax auditor based on a request under s.26 of the Tax Code. There has been no case when a bank refused to provide the requested information because it was covered by banking secrecy. Banking information was provided in 60 cases during the period under review. The requested information was not provided in five cases when neither an account number nor the name of the bank were indicated by the requesting jurisdiction and the Slovak authorities did not manage to identify the bank account by other means. No peer indicated any problem in obtaining banking information from Slovakia where information allowing identification of the bank account was provided.
Professional privileges
227. Under the Tax Code, it is mandatory to disclose to the financial 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.24(7)). 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.15). 228. 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. 229. 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). 230. 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 law27 (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 goes 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 financial administration. According to the interpretation by Slovak authorities, the professional privilege relates not to the information but to the person holding it. Therefore the privilege can be claimed only if the requested information is held by a tax advisor or a lawyer covered under the Act on Tax Advisors or Act on Attorneys. 231. In practice, the tax auditor requests information from the taxpayer who is obliged to provide the requested information. Cases when the relevant information is held only by a tax advisor or a lawyer are according to the Slovak authorities very rare in practice. Over the period under review there was no case when a person refused to provide the requested information because of professional privilege.
Phase1 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.
27.
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).
Phase2 rating Largely compliant.
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 (ToRB.2.1)

232. 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). 233. 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. In practice, the tax auditor proceeds as in domestic cases and the taxpayer is not notified that the information is requested for purposes of EOI. This is confirmed by the Internal Directive No.3/3/2010. 234. As explained in SectionB.1, the Slovak Republics tax authorities can approach taxpayers or other persons holding relevant information for inspection during normal business hours (s.38 Tax Code). There is no requirement for the tax authorities to give prior notice to taxpayers before commencing the inspection or investigation. 235. Under the Tax Code, parties to a tax proceeding28 cannot appeal information gathering measures taken by the financial administration to obtain the requested information. The parties can, however, appeal a decision regarding tax assessment. Such a decision may be based on information obtained via the use of information gathering powers but in the absence of such a decision there can be no appeal. This means collection of information and its provision to the requesting jurisdiction cannot be appealed unless the Slovak tax authorities have issued a decision regarding tax assessment prior
28. The parties to a tax proceeding are the taxpayer and any third parties as the tax administration may permit. The tax proceeding is defined as any proceeding involving the rights and duties of taxpayers in the context of a tax assessment by the Slovak tax authorities. It is part of the process of any tax assessment in Slovakia.

to providing the information to the requesting jurisdiction. This is confirmed in practice by the fact that there has been no case when information gathering powers used for the purpose of providing information to an EOI partner or provision of the requested information have been appealed. Although information gathering powers or provision of information cannot be appealed as such the taxpayer has the right to inspect his/her own tax file which is further described in part C.3.
Compliance with the Standards: EXchanging Information 77
C. Exchanging Information
Overview
236. 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 allows it to achieve effective EOI in practice. 237. Pursuant to the EOI Act, the Ministry of Finance delegated powers of the Slovak Republics competent authority for international exchange of information in tax matters to the Financial Directorate. The Slovak Republic also shares information with other jurisdictions pursuant to the EU Administrative Cooperation Directive 2011/16/EU, the EU Savings Directive, Council Regulation No.904/2010 on administrative co-operation and combating fraud in the field of value added tax and Council Regulation (EC) No.2073/2004 on administrative co-operation in the field of excise duties. 238. The Slovak Republic has signed 65 DTCs, 63 of which are in force as of December 2013 (see Annex2). Further, the Slovak Republic signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters (the Multilateral Convention) on 29May 2013. The Multilateral Convention has been ratified and enters into force on 1March 2014 in the Slovak Republic. The Slovak Republic signed a TIEA with Guernsey in October 2013 and the Slovak Republic authorities have advised that it is in the process of negotiating TIEAs with four other jurisdictions which are not signatories of the Multilateral Convention. 239. The Slovak Republics network of EOI agreements covers most of its major trading partners and other major OECD/G20 jurisdictions. 240. Out of the 65 signed DTCs, three (with Vietnam, Georgia and Kuwait) contain the full text of Article26, expressly obliging the Slovak Republic to exchange information according to the international standard and 56 DTCs allow the Slovak Republic to exchange information according to the
78 Compliance with the Standards: EXchanging Information

international standard. Only six 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.29 However, only the DTC with Sri Lanka is of concern in practice since Austria, Brazil, Germany and the Netherlands are covered by the EU Directive 2011/16/EU or the Multilateral Convention which both provide for exchange of information in line with the standard. The Slovak Republics DTC with Chinese Taipei does not allow for the exchange of taxpayer-specific information because it does not have the status of an international treaty under the Slovak Republic Constitution, and as such does not override the other domestic laws relating to confidentiality.30 241. 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 Article26(2) of the OECD Model Tax Convention. The Slovak Republic has implemented measures to ensure that confidentiality of information received is ensured in practice, except in certain circumstances where a taxpayer exercises his/her right to inspect files (see sectionC.3). The Slovak Republics law allows the taxpayer to inspect his/her file containing information obtained from the requesting jurisdiction including the EOI request without appropriate exceptions. This is not in line with the standard and the Slovak authorities should ensure that the received information cannot be disclosed to the taxpayer or his legal representative before tax proceedings are launched and that the EOI request will not be disclosed to the taxpayer in cases when the requesting jurisdiction has indicated that it should not be disclosed. 242. Most31 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 PartB 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. However, during the period under review there was no occasion in practice when the requested information was not provided because it was covered by trade, business, industrial, commercial or professional secrets or subject of legal professional privilege.
29. Exchange of information to the standard is however possible with Austria, Germany and the Netherlands under the EU Administrative Cooperation Directive 2011/16/EU. 30. Act on Personal Data Protection, or Act on Banks, etc. 31. The exception is the DTC with Sri Lanka.
243. The Slovak Republics competent authority for exchange of information is the CLO Unit situated in the anti-fraud department of the Financial Directorate. The CLO Unit is responsible for exchange of information in the field of direct and indirect taxes. There are no legal restrictions on the ability of the Slovak Republics competent authority to respond to requests within 90days of receipt by providing the information requested or by providing an update on the status of the request. The Slovak Republic received 519 requests related to direct taxes over the period 1July 2009 to 30June 2012. Including the time taken by the requesting jurisdiction to provide additional information, the requested information was provided within 90days, 180days and within one year in 28%, 49% and 79% of the time respectively32. 244. The Slovak Republic has in place appropriate organisational processes to ensure effective exchange of information. However, there are certain areas for improvement in order to ensure that information is provided in a timely manner in all cases (see sectionC.5). The Slovak Republic should also provide status updates in cases where it is not in position to meet the 90day deadline.
C.1. Exchange of information mechanisms

Exchange of information mechanisms should allow for effective exchange of information.
245. 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 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.
246. It is also possible for the Slovak Republic to sign DTCs that are not directly 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
32. These figures are cumulative.

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 information33. Hence, the exchange of information under such treaties is limited to non-taxpayer specific information. Only one agreement34 has been concluded under Article1(2) of the ITA and the Slovak authorities have indicated that there are no plans to conclude any other such agreement. 247. The Slovak Republic has signed 65 Double Tax Conventions (DTCs), 63 of which are in force. Further, the Slovak Republic signed the Multilateral Convention on 29May 2013. The Convention has been ratified and will enter into force on 1March 2014 in the Slovak Republic. The Slovak Republic signed a TIEA with Guernsey in October, 2013 and the authorities reported that negotiations to conclude TIEAs are currently ongoing with four jurisdictions which are not signatories of the Multilateral Convention. Most of these negotiations have been initiated by the Slovak Republic. 248. The Slovak Republic also participates in other forms of administrative co-operation such as spontaneous and automatic exchange of information, multilateral controls and recovery assistance. These forms of co-operation are mainly based on the EU Mutual Assistance Directive, EU Savings Directive, EU Recovery Directive35 and EU Regulation on Administrative Cooperation in the Field of VAT.36
Foreseeably relevant standard (ToRC.1.1)

249. 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 Article26(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,
33. 34. 35. Examples are the Bank Act and the Act on Personal Data Protection. Chinese Taipei. Council Directive No.2010/24/EU concerning mutual assistance for the recovery of claims relating to taxes, duties and other measures. 36. Council Regulation No.904/2010 EEC, on Administrative Cooperation and Combating Fraud in the Field of Value Added Tax.
or of their political subdivisions or local authorities, insofar as the taxation thereunder is not contrary to the Convention. The exchange of information is not restricted by Articles1 and 2. 250. Most of the Slovak Republics DTCs, the TIEA with Guernsey and the Multilateral Convention 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 agreement. This scope is set out in EOI Article in the relevant agreement and is consistent with the international standard. 251. 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. The Slovak Republic is currently in contact with Sri Lanka and India to renegotiate the EOI provisions of these treaties. 252. The Switzerland-Slovak Republic DTC (including the provisions of the 2010 Protocol) includes the full wording of Article26 of the OECD Model Tax Convention, including paragraphs4 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 Article5(5) of the OECD Model TIEA and its Commentary). However, subparagraph (c) of paragraph7 of Article9 of the 2010 Protocol states that these requirements need to be interpreted in order not to frustrate effective exchange of information. This is confirmed by the Mutual Agreement which clarifies that the provisions of the 2010 Protocol should be interpreted as meaning that the person under investigation may be identified by other means than the name and address and that the name and address of the holder of the information should be indicated only to the extent known. The Mutual Agreement came into force on 1September 2012. Consequently, the Switzerland-Slovak Republic DTC allows for EOI in line with the standard. 253. 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 all three jurisdictions are signatories of the Multilateral Convention which provides for exchange of information in line with the standard, the limited wording in these three DTCs is not a concern in practice. In addition, Austria and Germany are EU members subject to the EU Council Directive 2011/16/EU, which allows for

exchange of information in line with the foreseeably relevant standard as well. Nevertheless, the Slovak Republic contacted Brazil to renegotiate the EOI provision of the treaty. 254. The Slovak Republic did not decline any request for information during the period under review on the basis that the requested information was not foreseeably relevant. The Slovak authorities require the following information to be included in the request: identity of the person under investigation; statement of the information sought; the tax purpose for which the information is sought; to the extent known, the name and address of any person believed to be in possession of the requested information; a statement that the applicant Party has pursued all means available in its own territory to obtain the information, except those that would give rise to disproportionate difficulties.
255. If the information needed to proceed with the request is not provided the Slovak authorities will attempt to supplement it with information from their own sources (e.g.the tax database, Commercial Register, Register of Citizens). No underlying documentation is needed in order to demonstrate the tax purpose for which information is sought. Only if the information cannot be supplemented the Slovak authority will ask for clarification. This was the case in 15 requests over the period under review (3% of received requests). In most of these cases the information provided did not allow identification of the person concerned. Clarifications were sought in respect of individuals with a name which was not unique and no address or other identifying information was provided. All companies have to have a unique name and therefore no clarification was needed in their respect. In some cases the request referred to missing attachments. 256. No issue in respect of the Slovak Republics interpretation of the foreseeable relevance was reported by peers.
In respect of all persons (ToRC.1.2)

257. 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.
258. All of the Slovak Republics EOI agreements provide for EOI in respect of all persons. No issue restricting exchange of information in this respect has been indicated by the Slovak authorities or Slovak EOI partners.
Exchange of information held by financial institutions, nominees, agents and ownership and identity information (ToRC.1.3)
259. 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 Article26(5) of the OECD Model Tax Convention. 260. Out of the Slovak Republics 67 EOI agreements: the DTC with the Netherlands contains a protocol specifically prohibiting the exchange of bank information and information on insurance companies.37 As such, this DTC is not to the international standard. However, as noted above, the Netherlands is subject to the EU Council Directive 2011/16/EU and signatory of the Multilateral Convention, 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 Multilateral Convention, the TIEA with Guernsey and DTCs with Georgia, Vietnam, Switzerland (including the 2010 Protocol) and Kuwait contain Article26(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 Article26(5) of the OECD Model Tax Convention.
261. For the 60 DTCs that do not contain Article26(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 Article26(5) indicates that while paragraph5, added to the Model Tax Convention in 2005, represents a change in the structure of the Article,
37. Paragraph 4 of the 1974 protocol.

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 PartB of this report, the Slovak Republic is able to obtain and exchange information 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. Out of these 60 jurisdictions 43 are signatories of the Multilateral Convention and 27 jurisdictions are covered by the EU Council Directive 2011/16/EU. Out of the remaining 15 jurisdictions three were reviewed and no limitation was found.38 Therefore the wording of DTCs may be a concern in practice in respect of the remaining 12 jurisdictions.39 262. It is recommended that the Slovak Republic update the DTCs with partners that currently may 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 Article26(5) of the OECD Model Taxation Convention. 263. In practice, the Slovak Republic has never declined a request because the information was held by a bank, other financial institution, nominees or persons acting in an agency or fiduciary capacity or because the information related to an ownership interest. This has been confirmed by peers. Where the EOI instrument does not contain a provision similar to the one in Article26(5) of the Model Tax Convention, the Slovak Republic does not require reciprocity from the EOI partners which do not provide such information. The financial administration is not required to follow any special procedures in order to obtain information in these cases. Reference to a court or other authority is not required.
Absence of domestic tax interest (ToRC.1.4)

264. 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.
38. 39. These reviewed jurisdictions are China, FYROM and Israel. These jurisdictions are Belarus, Bosnia, Egypt, Kazakhstan, Libya, Montenegro, Serbia, Sri Lanka, Syria, Chinese Taipei, Turkmenistan and Uzbekistan.
265.
Out of the Slovak Republics 67 EOI agreements: eight DTCs40, the TIEA with Guernsey and the Multilateral Convention contain provisions similar to Article26(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 Netherlands41 only allow the exchange of information at the disposal of the competent authorities. Agreements with this restrictive language do not allow the competent authorities to use their access powers to obtain all kinds of information for EOI purposes and therefore both of these agreements do not meet the international standard. However, as noted above, the Netherlands is subject to the EU Council Directive 2011/16/EU, 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.
266. There are no domestic tax interest restrictions on the Slovak Republics powers to access information in EOI cases (see SectionB above). As such, the exchange of information in the absence of domestic interest in respect of the 55 DTCs will be subject to reciprocity and will depend on the domestic limitations (if any) in the laws of some of these partners. Out of these 55 jurisdictions 40 are signatories of the Multilateral Convention and 27 jurisdictions are covered by the EU Council Directive 2011/16/EU. Out of the remaining 13 jurisdictions three were reviewed and no limitation was found.42Therefore the wording of DTCs may be a concern in practice in respect of the remaining 10 jurisdictions.43 Where such restrictions exist, it is recommended that the Slovak Republic work with the relevant DTC partners to remove these restrictions.
40. Canada, Chinese Taipei, Georgia, Kuwait, Russia, Switzerland (including the 2010 protocol), USA and Vietnam. 41. Slovakia and the Netherlands can nevertheless exchange information to the standard under the EU Administrative Cooperation Directive 2011/16/EU. 42. These reviewed jurisdictions are China, FYROM and Israel. 43. These jurisdictions are Belarus, Bosnia, Egypt, Kazakhstan, Libya, Montenegro, Serbia, Syria, Turkmenistan and Uzbekistan.

267. In practice, the Slovak Republic is able to use all its domestic information gathering measures for EOI purposes regardless of a domestic tax interest (see part B.1.3). The Slovak Republic does not require reciprocity from the EOI partners who require a domestic tax interest for gathering and providing the requested information, i.e.the competent authority does not request its treaty partners to declare that they would be able to exchange of information in the absence of a domestic tax interest. No peer indicated that the Slovak Republic requires domestic tax interest for gathering and providing requested information.
Absence of dual criminality principles (ToRC.1.5)

268. 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. 269. There are no dual criminality provisions in any of the Slovak Republics DTCs or other EOI agreements. Accordingly, there has been no case when the Slovak Republic declined a request because of dual criminality requirement as has been confirmed by peers.
Exchange of information in both civil and criminal tax matters (ToRC.1.6)

270. 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). 271. All of the Slovak Republics DTCs and other EOI agreements provide for exchange of information in both civil and criminal tax matters. 272. The Slovak Republic does not require information from the requesting competent authority as to whether the requested information is sought for criminal or civil tax purposes as there is no difference in administrative procedures or information gathering powers in respect of EOI requests related to civil or criminal tax matters. No peer input indicated any issue in this respect.
Provide information in specific form requested (ToRC.1.7)

273. 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 Article27(3)) that strengthen the need to provide information in the form requested. Peer inputs indicate that the Slovak Republic provides the requested information in adequate form and no issue in this respect has been reported.
In force (ToRC.1.8)
274. 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. 275. 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 (DTCs with Egypt and Kuwait and TIEA with Guernsey) which have not been brought into force to date. The DTC with Egypt was already ratified in the Slovak Republic. The DTC with Kuwait and the TIEA with Guernsey were signed recently.
Be given effect through domestic law (ToRC.1.9)

276. 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. This is further confirmed in s.22 of the EOI Act. 277. The above legislative procedures do not apply where the EOI agreement is not directly regulated by the Slovak Constitution as an international treaty. Such agreement is 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 this agreement 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. The Slovak Republic is currently analysing the possibilities for bringing this DTC into line with the standard. There are no plans to conclude this type of agreement with any other jurisdiction in the future.
C.2. Exchange of information mechanisms with all relevant partners

The jurisdictions network of information exchange mechanisms should cover all relevant partners.
278. 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. 279. The Slovak Republic has an extensive EOI network covering 94 jurisdictions through 65 DTCs, one TIEA, the Multilateral Convention and EU mechanisms for exchange of information. Out of these relations: 66 are with Global Forum member jurisdictions; 32 are with OECD countries; 19 are with G20 countries; and all EU members are included.
280. 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 EU Council Directive 2011/16/EU, which allows EOI to the standard and therefore the Slovak Republic has an EOI relationship with these countries that allows for exchange of information in line with the standard. 281. The Slovak Republic signed the Multilateral Convention on 29May2013 and deposited ratification documents in November, 2013. The Convention comes into force in Slovakia on 1March 2014. Signing of the Convention broadened the Slovak Republics EOI network by 28 jurisdictions.44 Slovak Republic has also signed a TIEA with Guernsey which is not yet in force. In addition, the Slovak authorities have advised that the Slovak Republic is taking active steps to expand its EOI network via negotiation of new DTCs or TIEAs. The Slovak Republic is in the process of holding TIEA negotiations with four jurisdictions since majority of other partners identified by Slovakia is already covered by the Convention. 282. Upon the split of the former Czechoslovakia into two successor countries, the Czech Republic and the Slovak Republic, on 1January 1993, the Slovak Republic submitted a Proclamation of the National Council of the Slovak Republic to the UN, other international organisations and to all countries. The Proclamation states that in accordance with the principles of international law the Slovak Republic as a successor state will consider itself as bound by multilateral and bilateral treaties vested with the former Czechoslovakia. Therefore, all DTCs of Czechoslovakia are considered by the Slovak Republic as in force unless the treaty was formally terminated according to its termination provision. 283. 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. The Slovak Republic has developed over decades an extensive EOI network including bilateral and multilateral instruments. Nevertheless, the Slovak Republic is encouraged to continue to develop its EOI network with all relevant partners.
44.
These jurisdictions are Albania, Andorra, Anguilla, Argentina, Aruba, Azerbaijan, Belize, Bermuda, British Virgin Islands, Cayman Islands, Chile, Colombia, Costa Rica, Curacao, Faroe Islands, Ghana, Gibraltar, Greenland, Guatemala, Isle of Man, Liechtenstein, Montserrat, Morocco, New Zealand, San Marino, Saudi Arabia, Sint Maarten and Turks & Caicos.

Phase1 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. Phase2 rating Compliant.
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 (ToRC.3.1)

284. 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 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. 285. Under the Tax Code, any information obtained within the framework of a tax proceeding must be kept confidential. However, the Tax Code 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 (s.11(6)). This is not in line with the international standard. 286. As noted above, however, the provisions of the Slovak Republics EOI agreements 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 Article26(2) of the OECD Model Tax Convention. 287. 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 Tax Code. As a result, the Slovak Republic is unable to provide taxpayer specific information to Chinese Taipei under the agreement and will not request taxpayer specific information from Chinese Taipei. However, the Slovak Republic can receive such information provided spontaneously. Accordingly, there has been no case when the Slovak Republic sent or received an EOI request under the DTC with Chinese Taipei. The Slovak Republic should ensure that all the confidentiality provisions of all its EOI agreements are given effect through its domestic laws. 288. In practice, information obtained in response to an EOI request is kept separately from information obtained from domestic sources and such information is used only for purposes authorised by the respective treaty. The obtained information is kept in the respective taxpayers file and can be provided upon request only to authorities dealing with assessment, collection or prosecution of the tax at stake. Further, the Slovak authorities indicate that they have never come across a case where information obtained upon request has been requested by another government authority except for those dealing with assessment, collection or prosecution of taxes. 289. Based on section23 of the Tax Code, the taxpayer has a right to inspect upon request his/her tax file at any time. Information which cannot be disclosed is information which is not related to his/her tax obligations (i.e.classified information under Act No.215/2004 Coll. where disclosure is not in the states interest, or where disclosure would affect the legitimate interests of another person), documents related to a request sent or received by Slovakia where the requested information has not yet been provided (or the request closed) or documents related to a domestic request by one tax office for assistance from another where the requested information has not yet been provided. For the purposes of section23 taxpayer only refers to a taxpayer of Slovakia. In the context of a receipt of a request from an EOI partner jurisdiction, the letter of request is placed in the tax file of the taxpayer who has the requested information in his/her possession or control. For the purposes of section23 the information holder is regarded as the taxpayer concerned. As such, the taxpayer has the right to inspect the file and gain access to the request. This means that information provided by the requesting jurisdiction (including the EOI request itself) can be disclosed to the taxpayer after the requested information has been provided, irrespective of whether a tax procedure has been launched in Slovakia (which is the stage when the

taxpayer can exercise his appeal rights under Slovak law). Further, there are no provisions that would ensure that the EOI request itself is not disclosed to the taxpayer after it has been exchanged if the requesting jurisdiction requests that it should not be disclosed. 290. The Slovak Republics EOI agreements ratified under the Constitution override domestic laws. However, the Slovak authorities indicated that the domestic rule should be followed since in their view treaties do not clearly prohibit such disclosure. 291. In practice, it is rather rare, according to the Slovak authorities, that the taxpayer requests to see his/her tax file. The standard taxpayer who has no open issue with the Slovak tax authority asks usually only for limited information, for example regarding his/her tax liability for a certain tax year. However, there are cases where the taxpayer or his/her legal representative asks for inspection of the tax file in order to verify procedural aspects of a tax proceeding launched in order to assess his/her tax liability. This is especially the case when bigger amounts of taxes are at stake. 292. Although the taxpayer (even when being the information holder) is not informed during the gathering of the information whether the information is requested for domestic or EOI purposes (see sectionB.2.1) the legal framework does not rule out disclosure of information provided by the requesting jurisdiction to the taxpayer at any time after the requested information has been provided, i.e.even before the tax proceeding is open and appeal rights can be exercised. Hence the disclosure of information is not linked to the exercise of appeal rights or the requirements of domestic court proceedings or the like, which would necessitate such disclosure. Further, the Slovak Republic cannot insure that the request itself (i.e.original document including sensitive information such as identification of the requesting competent authoritys official or of the source of information) will not be disclosed to the taxpayer if the requesting jurisdiction specifically indicates that it should not be disclosed. Although the Tax Code has been in force only since January 2012 it has been confirmed in practice that the possibility of inspection of files is used by taxpayers especially when his/her tax liability is at stake. It is therefore recommended that the Slovak Republic ensures that the received request and accompanying documents cannot be disclosed to the taxpayer or his legal representative before tax proceedings are launched and that the EOI request will not be disclosed to the taxpayer in cases when the requesting jurisdiction indicated that it should not be disclosed.
In practice
293. In practice, information received or sent is stored in a secure manner and access is restricted to the officers handling the request. Compliance with secrecy obligations is monitored by the superior of the respective officer, and
no breach of confidentiality has been experienced in practice in relation to an EOI request. 294. All exchange of information files are stored in a secured archive and EOI database. Authorisation to access exchange of information files and the EOI database is granted only to the tax officials at the CLO Unit handling the respective requests and to the director of the anti-fraud department of the Financial Directorate. The officer responsible for the specific file/request is responsible also for any unauthorised access to the information contained in the file/request. 295. Once the request is received the original letter is kept only at the CLO Unit. Based on the request the CLO Unit fills in a standard form which is sent by secure email to the relevant contact person. The standard form does not include the identity of the requesting competent authority. The standard form is accompanied by a copy of annexes to the request (if provided) and their translations. 296. Confidentiality of information is further ensured by strict regulation of access rights. Each tax office is authorised to access taxpayer specific information related only to taxpayers under their responsibility. Further, the access rights are granted based on the position of each tax official. The respective tax official is authorised to access only files on which he/she is working on. Each access to the tax database is recorded and the respective tax official is identifiable based on his/her ID code. Each official has his own computer protected with a password (that he is not allowed to share) which is changed every 3months. Access rights in the system do not allow for any changes to be made to the stored information unless such rights are granted to the official by the system administrator. The tax officials are not allowed to download any new software without specific authorisation from the administrator.
All other information exchanged (ToRC.3.2)

297. 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. 298. The confidentiality provisions in the Slovak Republics EOI agreements 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. 299. In practice, all types of information exchanged including official communications between the Competent Authorities are protected under

the Slovak tax secrecy rules in the same way. Confidentiality of information exchanged is ensured, with the exception of the issue discussed above concerning the right to inspect files.
Phase1 determination The element is in place, but certain aspects of the legal implementation of the element need improvement. The taxpayer can inspect his/her file containing all information obtained from the requesting jurisdiction and the EOI request without appropriate exceptions. The Slovak authorities should ensure that an EOI request cannot be disclosed to the taxpayer or his/ her legal representative before a tax proceeding is launched or when the requesting jurisdiction has indicated that it should not be.
Phase2 rating Partially compliant.
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 (ToRC.4.1)

300. 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. 301. 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.
302. All but one of the Slovak Republics EOI agreements 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 agreements and therefore, considering the provisions of Article3(2) of the DTCs, this term would derive its meaning from the domestic laws of the Slovak Republic. As noted in PartB of this report, the scope of information subject to professional privilege in the Slovak Republic is wide and goes beyond the international standard. 303. 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. 304. In practice, the Slovak Republic has never needed to approach legal representatives to obtain requested information and the Slovak Republic has never declined to provide the requested information because it is covered by legal professional privilege or any other professional secret. This has been confirmed by peers. The requested information is obtained from the person concerned or other government sources. So far there has been no case when professional legal privilege has been claimed to cover the information requested for EOI purposes.
Phase1 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.
Phase2 rating Largely compliant.
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 90days (ToRC.5.1)

305. There are no legal restrictions on the Slovak Republic tax authorities ability to respond to EOI requests within 90days of receipt by providing the information requested or providing an update on the status of the request. None of the Slovak Republics DTCs nor the Multilateral Convention states specific deadlines in which the requested information should be provided. Since 1January 2013 specific time limits have been prescribed for exchange of information among EU members states. According to Article7 of the EU Administrative Cooperation Directive 2011/16/EU the requested information should be provided as quickly as possible, and no later than six months from the date of receipt of the request. However, where the requested authority is already in possession of that information, the information shall be transmitted within two months of that date. These time limits were incorporated into Slovak law by the EOI Act also in respect of exchange of information based on EOI treaties. 306. The Slovak Republic received 519 requests related to direct taxes over the period 1July 2009 to 30June 2012. Requests are counted as per number of entities to which the request relates. A request concerning one taxpayer is counted as one, irrespective of the pieces of information requested. In case that the requesting country sends one letter (one reference number) in which the information requested concerns one foreign taxpayer and two or more Slovak taxpayers, the request is counted according to the number of Slovak taxpayers. It means if the requesting country asks for information regarding one foreign taxpayer and two Slovak taxpayers, Slovakia counts this letter as two requests. The following table shows the time needed to send the final response to these EOI requests including the time taken by the requesting jurisdiction to provide clarification (if asked).
Jul-Dec 2009 nr. Full response**: 90days 1 year (cumulative) >1 year 11 59 3 % 17% 48% 5% 2010 nr. 39 67 12 % 25% 2011 nr. 83 % Jan-Jun 2012 Total Average nr. % 15% 37% 73% 19% nr. 519 147 255 411 81 % 100% 28% 49% 79% 16%
Total number of requests* received 64 100% 158 100% 201 100% 96 100% 41% 14 60% 36 70% 70 24% 18
180days (cumulative) 31
42% 121 90% 140 8% 48
92% 142
Jul-Dec 2009 nr. Declined for valid reasons Failure to obtain and provide information requested Requests still pending at date of review 0 2 0 % 0% 3% 0%
2010 nr. 0 4 0 % 0% 2% 0%
2011 nr. 0 13 0 % 0% 6% 0%
Jan-Jun 2012 Total Average nr. 0 8 0 % 0% 8% 0% nr. 0 27 0 % 0% 5% 0%
* Requests are counted as per number of Slovak taxpayers to whom they relate. If a request does not relate to any Slovak taxpayer it is counted as per number of foreign persons to whom it relates. ** The time periods in this table are counted from the date of receipt of the request to the date on which the final response was issued. It does not take into account partial responses provided in the meantime or any delays resulting from the need to seek clarifications of requests from a requesting jurisdiction.
307. As the table shows there can be identified a mild increase in the number of received requests during the period under review. The Slovak Republic sent 272 requests over the same period meaning that the number of sent requests is about half of the number of requests received. Most requests were received from the Czech Republic, Hungary, Austria, Russia and Poland (in order of significance). Since the Slovak Republic has its main economic relations with its neighbouring countries the majority of requests sent or received is with the EU members. The biggest number of requests relates to accounting information and the verification of transactions. 308. The Slovak Republic provided the requested information within 90days for 28% of requests. Response times increased between 2011 and June 2012 due to organisational changes in the tax administration, which included changes in the organisation of EOI (e.g.the appointment of contact persons, tracking of requests). Generally, ownership information is provided in shorter time than accounting information and underlying documentation. Most of the requests where a response was not provided within 90days related to requests for verification of specific transactions and providing underlying documentation. The main difficulties the Slovak authorities are confronted with are non-contactable fraudulent entities and verification of declared transactions when the owner of the information is an individual taxpayer, or his/her business partner, involved in the suspected tax fraud. 309. Some of the entities to which requests relate are set up for one-off fraudulent activities and are not contactable by the financial administration. There is nobody at the registered office and members of the statutory body are abroad. If the entity is operated by Slovak citizens the situation is easier since the financial administration can use its powers to summon the person. If the person doesnt respond to written correspondence or phone calls and refuse to

co-operate the financial administration uses the assistance of the police to detect the person and bring him/her to the tax auditor. Another difficulty is verification of declared transactions on the basis of information which needs to be obtained from an individual or his/her business partners involved in the fraudulent activity. In this case, the extent of the information obtained depends on the quality of work of the respective tax auditor immediately after realisation of the transactions concerned where trading partners, in order to substantiate the transaction, co-operate with tax auditors and provide requested documents and information. For this reason, tax auditors are trained in detailed procedure to detect tax fraud. It is required to archive certified photocopies of all documents submitted in paper or electronic form. Thus, lawfully obtained and verified documents are in the file of the taxpayer and can be used in any subsequent investigation. If the requested information is not contained in the taxpayers file and the taxpayer is not co-operative the financial administration will be assisted by the Police to obtain the requested information. If the required documentation is already held by the Police the financial administration is entitled to look into the criminal tax file and make photocopies of all documents and evidence to be found in that file. 310. The reasons delaying the gathering of information led in some cases to not providing the requested information. This was the case in respect of 27 requests (5%) over the period under review. Out of these 22 requests related to verification of individual transactions. The information was not contained in the tax database or the taxpayers files and the suspected holder of the requested information was not contactable. In most of the cases the holder of the information was a foreign citizen living abroad. The Slovak Republic always provides all information which the tax auditor believes is foreseeably relevant to the case even if such information is not expressly requested. If the tax auditor is not able to contact the person concerned information which is at the disposal of the financial administration is provided (such information contained in the tax database, income tax returns or arrears). The other five requests where the requested information was not provided related to banking information. In these cases the requesting jurisdiction did not indicate an account number nor the name of the bank and the Slovak authorities did not manage to identify the bank account by other means (see sectionB.1.5). 311. Although the requested information was provided within 180days in 50% of cases, peers state that the information was mostly provided in a timely manner and do not indicate an issue in this respect. 312. The CLO Unit instructs auditors gathering the requested information to provide partial responses if different deadlines for gathering the information are given (s.10.5 Internal EOI Directive). However, such interim responses are not provided to the CLO Unit in all cases. Interim responses were provided to the requesting jurisdiction in 83 cases over the period under review (16% of received requests).
313. Over the period under review the Slovak Republic did not provide updates on the status of requests systematically. According to the Slovak authorities, part of the reason was that before the new EU Directive came into force in January 2013 there was no legal obligation to do so. Nevertheless if the applicant competent authority asked for such an update it was always provided. The second reason is that as yet the monitoring of deadlines is not automatic and requires manual input. There is no automatic reminder from the EOI database to indicate breaching of certain deadlines or to generate a reminder for the local offices. There is also no standard format for communication between the CLO Unit and local tax offices or between the CLO Unit and the requesting jurisdiction for providing status updates. Considering the fact that there is only one person handling exchange of information for direct taxes upon request the provision of status updates was not given a priority. 314. Since January 2013 the Financial Directorates Internal EOI Directive requires the provision of status updates. If the requested information cannot be obtained by the prescribed date the tax auditor shall notify the CLO Unit no later than two months after the receipt of the request. In this notification the supplier of information shall indicate the anticipated date of the response (s.10.4 Internal EOI Directive). Further, the Financial Directorate is currently working on a new IT system for tax administration (IFS) which will include an EOI module. The EOI module will monitor that all deadlines are kept, produce automatic reminders before deadlines for local tax offices or replies to requesting competent authorities are reached and should allow the generation of automatic reminder letters and status updates. The trial version of the system is expected to operate from July 2014 and if it is going well it should be officially introduced in January 2015. 315. Although the Slovak Republic is taking steps to ensure that status updates on requests where information cannot be provided within 90days are provided, these steps are not yet implemented and therefore it is recommended that the Slovak authorities establish a routine process to update requesting authorities on the status of their requests where the response takes more than 90days.
Organisational process and resources (ToRC.5.2) Organisation of EOI practice

316. The Slovak Republics competent authority for its EOI agreements is the Ministry of Finance or a tax authority designated by the Ministry. Since January 2012, the authority responsible for EOI is the Financial Directorate, the CLO Unit. Before January 2012 the competent authority was the Tax Directorate 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. 317. The CLO Unit is responsible for all types of exchange of information for tax purposes. It handles exchange of information for direct and indirect taxes and other forms of administrative co-operation, excluding recovery assistance. Out of the 13 employees working within the CLO Unit (including the head of unit), two are dealing with exchange of information in respect of direct taxes. One is responsible for spontaneous exchange of information and exchange of information upon request and the other one is responsible for automatic exchange of information. All other employees are dedicated to exchange of information within the field of VAT. 318. All requests for information are received or sent by the CLO Unit. The CLO Unit is responsible for communication between the competent authorities and for administration of the gathering of the requested information. This includes checking whether the responses sent by the tax offices include all the required information, that the information is provided in the requested format or if the requested information cannot be provided that the tax office provides an explanation as to why it was not able to provide all the requested information. 319. Once the request is received it is allocated by the CLO Unit to one of the nine tax offices responsible for handling the tax affairs of single taxpayers. There are eight tax regions.45 Each tax office is responsible for one of the regions. In addition to eight tax offices with local jurisdiction there is one office for large taxpayers46 which has jurisdiction over the whole country. The CLO Unit has established a network of 20 contact persons meaning that there are two contact persons for each tax office. These contact persons are responsible for smooth co-operation between the CLO Unit and the tax auditor gathering the requested information. This includes ensuring allocation of the request to a tax auditor, use of proper formats for providing or requesting information and maintaining proper communication between the CLO Unit and the tax auditor handling the request. The contact person can gather the requested information himself/herself but this is not very common in practice. Requests are normally handled by the tax auditor responsible for the taxpayer concerned. It is the responsibility of the tax auditor to ensure that all steps necessary to obtain the requested information were taken and that the provided information is correct and well evidenced.
45. 46.
These regions are: Bansko-Bystricky, Bratislavsky, Kosicky, Nitriansky, Presovsky, Trenciansky, Trnavsky and Zilinsky. The tax office for large taxpayers is responsible for banks, insurance companies and taxpayers with a year turnover over EUR0.3million.
Handling of EOI requests

320. Procedures for handling of EOI requests are the same for all types of the requested information and there is no difference in criminal cases. When a request for exchange of information is received, a unique reference number is assigned to it by the CLO Unit officer. After that the CLO officer checks the validity of the request, i.e.its legal basis and competent authority authorisation. The request is then manually registered on an Excel sheet which is used also for statistical purposes. Upon its registration the CLO officer checks whether all necessary information for processing the request is included (see sectionC.1.1). In case additional information is needed the CLO officer asks the requesting competent authority for clarification. This was the case in 3% of received requests (see sectionC.1.1). 321. The CLO officer verifies the identity of the person concerned via the tax database or Register of Citizens. Based on the seat of the registered office or address of the person concerned the request is allocated to the respective local tax office. If the request does not concern any Slovak taxpayer and information requested relates to banking information, it is allocated to the tax office responsible for large taxpayers. The necessary information is translated into Slovak by the CLO officer and filed in a standard format which is sent together with the supporting documentation (if any) to the respective contact person in the local tax office who arranges the tax offices response. If it is a request from an EU country the standard format for sending information to the contact person is not used since the EU request format already contains the necessary information. 322. The Slovak Republic accepts requests preferably in English. If the request is not in English, German or French the requesting competent authority will be asked to translate the request into one of these languages but so far it has never happened that a request was received in any other language than these three. 323. The CLO Unit responds directly to requests which ask for verification of identity or the address of a specified person. A response was provided directly by the CLO Unit in about 5% of the requests. In all other cases requests are handled by local offices so that all relevant information can be provided. 324. Once received by the contact person the information in standard format together with the supporting documentation (if provided by the requesting jurisdiction) is forwarded to the respective head of unit within the tax investigation department in the local tax office who assigns the request to the tax auditor. The tax auditor then decides on the most efficient way to obtain the requested information.

325. Once the requested information is gathered the tax auditor completes a standard reply form47, fills in the information and attaches supplementary documentation (if needed). These documents then go through the same route as the request back to the CLO Unit. The head of unit within the tax investigation department checks whether appropriate measures have been taken. The contact person is responsible for the correctness of the documents provided to the CLO Unit. Once the reply is received the CLO checks whether the obtained information represents an adequate response to the request. If not, the tax auditor is required to provide clarification as to why the requested information was not appropriately provided. If the information is sufficient, the reply (including titles of supplementary documentation) is translated into English and sent to the requesting Competent Authority. 326. Communication between the CLO Unit and the local tax office is carried out through a secure email network. For communication between competent authorities of EU member states the CCN network is used.48 With regard to other countries, the requested information is sent by the registered post.
Internal deadlines
327. The Internal EOI Directive (No.4/2012/1100204) states deadlines in which the tax auditor is required to provide the requested information to the CLO Unit. If the requested information is already at the disposal of the financial administration (e.g.in the tax file or within the tax database) the tax auditor is required to obtain and send the information to the CLO Unit without unnecessary delay and not later than one month after the receipt of the request by the contact person (s.10.2). If the requested information is not at the disposal of the financial administration and therefore it needs to be obtained otherwise (e.g.from the taxpayer or by co-operation with third parties) the tax auditor is required to send the information to the CLO Unit not later than four months after the receipt of the request by the contact person (s. 10.3). If the requesting competent authority indicates that the request is urgent the CLO Unit may determine the time necessary to process the request other than referred to in paragraph10.3.(s.10.6). 328. The CLO Unit indicates deadlines according to the Internal EOI Directive in the email in which the request is provided to the contact person. The deadlines are counted from the moment the request is received by the
47. Annex2 of the Internal Directive No.4/2012/1100204 or for exchange of information under the EU Directive 2011/16/EU standard e-Forms. 48. CCN mail means the common platform based on the common communication network (CCN), developed by the European Union for all transmissions by electronic means between competent authorities in the area of customs and taxation.
contact person (which is the same day when it was sent via the encrypted email by the CLO). 329. The internal deadlines are set up in order to give the CLO Unit enough time to process the request and provide the requested information according to the deadlines prescribed in Article7 of the EU Administrative Cooperation Directive 2011/16/EU. Although the deadline for cases when the requested information is not at the disposal of the financial administration is four months it is recommended that the requested information is provided as quickly as possible and that the tax auditor is aware of crucial importance of timely responses for the effectiveness of EOI.
IT tools, monitoring, training

330. The main IT tool used for gathering of the requested information is the tax database and its internal applications (see sectionA.1). The information contained in the tax database can be supplemented with information in the persons tax file (e.g.correspondence with the taxpayer, notifications regarding the taxpayer from other government bodies) or other public or government sources (e.g.internet, Commercial Registry, Register of Foundations, Register of Citizens, Register of Real Estates or Register of Cars). 331. The EOI database currently consists of an excel sheet where all information needs to be manually entered. Monitoring of the process of handling requests is based on the information contained in the EOI database but there are no automatic monitoring functionalities built in such as reminders to keep deadlines or statistical reports. The Financial Directorate is developing a new database which will be part of the new tax administration system (IFS). The new IT system is expected to become fully operational in January 2015. 332. CLO officers are in daily contact with the head of the CLO Unit and discuss with him any issues that arise. The overall EOI performance is evaluated by the head of the CLO Unit on a monthly basis based on an overview of outstanding cases as produced by the respective CLO officers. The head of unit is responsible for effective exchange of information to the director of the anti-fraud department of the Financial Directorate. The Head of CLO Unit and the director of the anti-fraud department have also direct access to the EOI database to check any outstanding issues. Reports on EOI performance form part of annual reports of the financial administration which are provided to the Ministry of Finance. 333. Officers of the CLO Unit are well trained and appropriately educated. All officers receive regular training on internal guidelines and directives. Officers in the CLO Unit also attend international forums on EOI (e.g.EU committees, FISCALIS seminars, OECD WP10 meetings, IOTA,) so as to

keep up-to-date with global developments as well as establish network of personal contacts for more effective exchanges. 334. The CLO Unit trains all contact persons on a regular basis. Training is given at least once a year at each of nine tax offices. In addition, training is organised when changes in the legal and regulatory framework of EOI occur or when some practical issues arise. Training for the new Internal EOI Directive and new EU request formats was organised in September 2013 for all contact persons. The Internal EOI Directive was distributed in December 2012 to tax auditors (including contact persons) via official channels. The CLO Unit has further distributed to all contact persons guides developed by the EU. The CLO Unit has a dedicated intranet site where all relevant materials and updates can be found. 335. The EOI training for tax auditors is part of their general tax training. The training seminars are in the form of workshops, lectures or computer based training courses. When the current EU request forms were introduced the CLO Unit organised computer based training for 202 persons which was followed by a manual distributed to all tax auditors. The CLO Unit is contactable via phone and provides consultations to contact persons and tax auditors on a case by case basis. The CLO Unit is also conducting training on request of individual tax offices.
Conclusion
336. The Slovak Republic is considered by peers an important and reliable EOI partner. Although responses were provided within 90days in only 28% of cases no peer indicated that Slovakia is not providing information in a timely manner. While Slovakias response times can be partially explained by the difficulty of the cases (e.g.non-contactable persons), the assessment team identified some areas in Slovakias EOI processes and resources where improvements should be made: staffing of the CLO Unit The Slovak Republic received or sent during the period under review on average 261 requests per year. All these requests together with related monitoring of local offices are handled by one person. This person is responsible also for spontaneous exchange of information. In addition to handling requests the two officers responsible for exchange of information in the field of direct taxes carry out training and seminars (including updating intranet and internet webpages), participate in international meetings and co-operate in the preparation of legislative amendments and policy issues related to EOI domestically and within the EU. It is also difficult to ensure that requests are processed without unnecessary delay when there seems to be limited substitution when the only person
handling the exchange of information upon request in the field of direct taxes is absent from the office. handling of requests by contact persons In some cases provision of information was delayed due to time spent on the allocation of the request by the contact person and the head of unit to the tax auditor. Further, the CLO Unit is not informed about the individual tax auditor handling the request which led in a limited number of cases to delays since the tax auditor was not properly reminded of the breached deadline and a status update was not provided. These problems seem to be caused by work overload of contact persons for whom the responsibility for co-ordination of EOI is added to their normal responsibilities as tax auditors or analysts. EOI database Monitoring of the handling of EOI requests is relatively time consuming (especially considering the staffing of the CLO Unit), such as monitoring of deadlines, issuing reminders and asking for status updates. The Financial Directorate is currently working on a new EOI database which is expected to be fully operational in January 2015.
Absence of unreasonable, disproportionate, or unduly restrictive conditions on exchange of information (ToRC.5.3)

337. Exchange of information assistance should not be subject to unreasonable, disproportionate, or unduly restrictive conditions. 338. Other than those matters identified earlier in this report, there are no further aspects of the Slovak Republics domestic laws or practices that impose additional restrictive conditions on exchange of information.
Phase1 determination This element involves issues of practice that are assessed in the Phase2 review. Accordingly no Phase1 determination has been made.

Phase2 rating Largely compliant. Factors underlying recommendations The Slovak Republic does not systematically provide updates to the requesting jurisdiction on the status of requests where the requested information is not provided within 90days. The fact that the requested information or the status update is usually not provided within 90days can be attributed mainly to understaffing of the CLO Unit, excessive workload of contact persons and inadequate monitoring tools. Recommendations The Slovak Republic should ensure that the requesting authority is updated on the status of the request in cases where it is not in position to meet the 90day deadline. The Slovak Republic should ensure that appropriate resources and measures are put in place so that information is provided in a timely manner in all cases.
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 107
Summary of Determinations and Factors UnderlyingRecommendations
Determination
Factors underlying recommendations
Recommendations
Jurisdictions should ensure that ownership and identity information for all relevant entities and arrangements is available to their competent authorities. (ToR A.1) Phase1 determination: 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 identify 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.
Phase2 rating: Largely compliant.
108 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) Phase1 determination: Slovak trustees of foreign The element is in trusts are not required to keep place. accounting records that fully reflect the financial position and assets/liabilities of the foreign trust. Phase2 rating: Compliant. Banking information should be available for all account-holders. (ToR A.3) Phase1 determination: The element is in place. Phase2 rating: Compliant. 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) Phase1 determination: The element is in place, but certain aspects of the legal implementation of the element need improvement. Phase2 rating: Largely compliant. 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) Phase1 determination: The element is in place. Phase2 rating: Compliant. 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. The Slovak Republic should ensure that domestic provisions on professional privileges allow exchange of information in line with the standard. 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.
SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 109
Determination
Recommendations
Exchange of information mechanisms should allow for effective exchange of information. (ToR C.1) Phase1 determination: The element is in place. Phase2 rating: Compliant. The jurisdictions network of information exchange mechanisms should cover all relevant partners. (ToR C.2) Phase1 determination: The element is in place. The Slovak Republic should continue to develop its EOI network to the standard with all relevant partners.
Phase2 rating: Compliant. The jurisdictions mechanisms for exchange of information should have adequate provisions to ensure the confidentiality of information received. (ToR C.3) Phase1 determination: The element is in place, but certain aspects of the legal implementation of the element need improvement. The taxpayer can inspect his/her file containing all information obtained from the requesting jurisdiction and the EOI request without appropriate exceptions. The Slovak authorities should ensure that an EOI request cannot be disclosed to the taxpayer or his/her legal representative before a tax proceeding is launched or when the requesting jurisdiction has indicated that it should not be.
Phase2 rating: Partially compliant. The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties. (ToR C.4) Phase1 determination: The element is in place but certain aspects of the legal implementation of the element need improvement. Phase2 rating: Largely compliant. 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.
110 SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS

Determination
Recommendations
The jurisdiction should provide information under its network of agreements in a timely manner. (ToR C.5) This element involves issues of practice that are assessed in the Phase2 review. Accordingly no Phase1 determination has been made. Phase2 rating: Largely compliant. The Slovak Republic does not systematically provide updates to the requesting jurisdiction on the status of requests where the requested information is not provided within 90days. The fact that the requested information or the status update is usually not provided within 90days can be attributed mainly to understaffing of the CLO Unit, excessive workload of contact persons and inadequate monitoring tools. The Slovak Republic should ensure that the requesting authority is updated on the status of the request in cases where it is not in position to meet the 90day deadline. The Slovak Republic should ensure that appropriate resources and measures are put in place so that information is provided in a timely manner in all cases.
ANNEXES 111
Annex1: Jurisdictions Response to the Review Report49

The Slovak Republic from the very beginning has strongly supported the work of the Global Forum on tax transparency. This work is very important in order to ensure that countries can fully and effectively apply their national tax systems. We strongly believe that the effective exchange of information in the tax area and mutual assistance/cooperation in tax matters significantly contribute to the fight against tax fraud and tax evasion. The Slovak Republic is actively involved in all forms of administrative cooperation for tax purposes. Slovakia has a well developed treaty network for exchange of information for tax purposes. These agreements cover both mutual assistance for the recovery of tax claims and exchange of information. Nevertheless, the results of the peer review have shown that there is still room for improvement. The recommendations in the report mainly concern disclosure of information contained in the EOI request and the improvement of systems for following-up on requests that are not answered within 90days. The Slovak Republic acknowledges the recommendations set out in the peer review report; the results are taken very seriously and will be addressed in close cooperation between the Ministry of Finance, Financial Administration and other relevant bodies. The peer review process provided us with a deeper understanding of complex issues concerning work on exchange of information, from the legislative and practical point of view, and inspiration for future work in this field. Since the Phase1 peer review the Slovak Republic has undertaken all necessary steps to become a party to the Joint Council of Europe/OECD Convention on Mutual Administrative Assistance in Tax Matters. The Convention came into force in the Slovak Republic on 1March 2014.
49.
This Annex presents the jurisdictions response to the review report and shall not be deemed to represent the Global Forums views.
112 ANNEXES
Annex2: List of Slovakias Exchange of Information Mechanisms
European Union exchange of information mechanisms

The Slovak Republic exchanges information with EU members under: the new EU Council Directive 2011/16/EU of 15February 2011 on administrative co operation in the field of taxation. This Directive came into force on 1January 2013. It repeals Council Directive 77/799/EEC of 19December 1977 and provides inter alia for exchange of banking information on request for taxable periods after 31December 2010 (Article18). All EU members were required to transpose it into national legislation by 1January 2013. The current EU members, covered by this Council Directive, are: Austria, Belgium, Bulgaria, Cyprus5051, 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 3June 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
50. Footnote 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 United Nations, Turkey shall preserve its position concerning the Cyprus issue. 51. Footnote by all the European Union Member States of the OECD and the European Union: 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 113
generated in an EU member state in favour of individuals or residual 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 7October 2010 on administrative co-operation and combating fraud in the field of value added tax (recast of the Council Regulation (EC) No 1798/2003 of 7October 2003 on administrative co-operation in the field of value added tax); Council Regulation (EC) No.2073/2004 of 16November 2004 on administrative co-operation in the field of excise duties.
Multilateral and bilateral exchange of information agreements

The Slovak Republic signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters as well as its 2010 Protocol on 29May 2013. The Convention has been ratified and enters into force on 1March 2014 in the Slovak Republic. The status of the Multilateral Convention as at December 2013 is set out in the table below.52 The table also includes territories to which the Multilateral Convention applies based on territorial extension declared by a state party. The Slovak Republic has signed 65 DTCs and one TIEA out of which 64 are in force (see the table below).
Table of the Slovak Republics exchange of information relations

The table below summarises the Slovak Republics EOI relations with individual jurisdictions established through international agreements or EU Council Directive 2011/16/EU. These relations allow for exchange of information upon request in the field of direct taxes. In case of the Multilateral Convention the date when the agreement entered into force indicates date when the Convention becomes effective in relation to each jurisdiction. In case of the EU Directive the date signed indicates date when the EU Directive was adopted and the date of entry into force of the EU Directive indicates the date when implementing provisions dealing with exchange of information upon request should become effective in EU member countries.
52.
The chart of signatures and ratification of the Multilateral Convention is available at www.oecd.org/ctp/eoi/mutual.
114 ANNEXES
Jurisdiction 1 2 3 4 5 6 Albania Andorra Anguillaa Argentina Arubab Australia Type of EOI arrangement Multilateral Convention Multilateral Convention Multilateral Convention Multilateral Convention Multilateral Convention Double Taxation Convention (DTC) Multilateral Convention DTC 7 Austria Multilateral Convention EU Council Directive 2011/16/EU (EU Directive) 8 9 Azerbaijan Belarus Non-amended Multilateral Convention DTC DTC 10 Belgium Multilateral Convention EU Directive 11 12 13 14 15 16 17 18 Belize Bermudad Bosnia Brazil British Virgin Islandsd Bulgaria Canada Cayman Islandsc Multilateral Convention Multilateral Convention DTC DTC Multilateral Convention Multilateral Convention DTC EU Directive DTC Multilateral Convention Multilateral Convention 12-Nov-99 15-Feb-11 22-May-01 Signed 2-Nov-08 26-Aug-86 Signed 24-Aug-99 Signed 7-Mar-78 Signed 15-Feb-11 Signed 12-Jan-99 15-Jan-97 Signed 15-Feb-11 Signed Signed Date signed Signed Signed Date in force Not yet in force in Albania Not yet in force in Andorra 01-Mar-14 01-Jan-13 01-Sep-13 22-Dec-99 01-Dec-12 12-Feb-79 Not yet in force in Austria 01-Jan-13 01-Jun-11 05-Jul-00 13-Jun-00 01-Jun-12 (Protocol not yet in force in Belgium) 01-Jan-13 01-Sept-13 01-Mar-14 17-Apr-83 14-Nov-90 Not yet in force in Brazil 01-Mar-14 2-May-01 01-Jan-13 18-Dec-01 01-Mar-14 01-Jan-14
ANNEXES 115
Jurisdiction 19 China
Type of EOI arrangement DTC Multilateral Convention Multilateral Convention Multilateral Convention Multilateral Convention DTC EU Directive Multilateral Convention
Date signed 11-Jun-87 Signed Signed Signed Signed 12-Feb-96 15-Feb-11 Signed 15-Apr-80 15-Feb-11 26-Mar-02 Signed 15-Feb-11 5-May-82 Signed 15-Feb-11 20-Jan-04 21-Oct-03 Signed 15-Feb-11 15-Feb-99 Signed 15-Feb-11 1-Jun-73 Signed 15-Feb-11
Date in force 23-Dec-87 Not yet in force in China Not yet in force in Chile Not yet in force in Colombia 01-Aug-13 14-Nov-96 01-Jan-13 Not yet in force in Croatia 01-Sep-13 30-Dec-80 01-Jan-13 14-Jul-03 01-Feb-14 01-Jan-13 27-Dec-82 01-Jun-11 01-Jan-13 --29-Mar-06 Not yet in force in Estonia 01-Jan-13 01-Jun-11 6-May-00 01-Jun-11 01-Jan-13 25-Jan-75 01-Apr-12 01-Jan-13
20 Chile 21 Colombia
22 Costa Rica 23 Croatia 24 Curacaob
Multilateral Convention DTC EU Directive DTC Multilateral Convention EU Directive DTC
25 Cyprus53
26 Czech Republic
27 Denmark 28 Egypt 29 Estonia 30 Faroe Islands 31 Finland
Multilateral Convention EU Directive DTC DTC Multilateral Convention EU Directive

e
Multilateral Convention DTC Multilateral Convention EU Directive DTC
32 France
Multilateral Convention EU Directive
53.
See footnotes 50 and 51.
116 ANNEXES
Jurisdiction Former Yugoslav 33 Republic of Macedonia 34 Georgia Type of EOI arrangement DTC DTC Multilateral Convention DTC 35 Germany 36 Ghana 37 Gibraltard Multilateral Convention EU Directive Multilateral Convention Multilateral Convention DTC 38 Greece 39 Guatemala 40 Guernsey 41 42 Greenlande Hungary Multilateral Convention EU Directive Multilateral Convention Tax Information Exchange Agreement Multilateral Convention DTC EU Directive Multilateral Convention 43 Iceland 44 India 45 Indonesia DTC Multilateral Convention DTC Multilateral Convention DTC Multilateral Convention DTC 46 Ireland 47 Isle of Man
f
Date signed 05-Oct-09 27-Oct-11 Signed 19-Dec-80 Signed 15-Feb-11 Signed 23-Oct-86 Signed 15-Feb-11 Signed 22-Oct-13
Date in force 27-Apr-10 01-Jan 13 01-Jun-11 17-Nov-83 Not yet in force in Germany 01-Jan-13 01-Sept-13 01-Mar-14 23-May-89 01-Sept-13 01-Jan-13 Not yet in force in Guatemala
01-Jun-11 5-Jan-94 15-Feb-11 Signed 15-Apr-02 Signed 27-Jan-86 Signed 12-Oct-00 Signed 8-Jun-99 Signed 15-Feb-11 8-Sep-99 21-Dec-95 01-Jan-13 Not yet in force in Hungary 19-Jun-03 01-Jun-12 13-Mar-87 01-Jun-12 30-Jan-01 Not yet in force in Indonesia 30-Dec-99 01-Sep-13 01-Jan-13 01-Mar-14 23-May-00
Multilateral Convention EU Directive Multilateral Convention DTC
48 Israel
ANNEXES 117
Jurisdiction 49 Italy
Type of EOI arrangement DTC Multilateral Convention EU Directive DTC Multilateral Convention DTC Multilateral Convention DTC Multilateral Convention DTC DTC Multilateral Convention EU Directive DTC Multilateral Convention DTC
Date signed 05-May-81 Signed 15-Feb-11 11-Oct-77 Signed 21-Mar-07 Signed 27-Aug-01 Signed 13-Nov-12 11-Mar-99 Signed 15-Feb-11 20-Feb-09 Signed 15-Mar-01 Signed 15-Feb-11 18-Mar-91 Signed 15-Feb-11 07-Sep-99 Signed 15-Feb-11 13-May-06 Signed 25-Nov-03 Signed 26-Feb-01
Date in force 26-Jun-84 01-Jun-12 01-Jan-13 25-Nov-78 01-Oct-13 28-Jul-08 Not yet in force in Kazakhstan 08-Jul-03 01-Jul-13 -12-Jun-00 Not yet in force in Latvia 01-Jan-13 21-Jun-10 Not yet in force in Liechtenstein 16-Dec-02 Not yet in force in Lithuania 01-Jan-13 30-Dec-92 Not yet in force in Luxembourg 01-Jan-13 20-Aug-00 01-Sep-13 01-Jan-13 28-Sep-07 01-Sep-12 17-Sep-06 01-Mar-12 15-Oct-01
50 Japan 51 52 Kazakhstan Korea
53 Kuwait 54 Latvia 55 Libya 56 Liechtenstein
57 Lithuania
Multilateral Convention EU Directive DTC
58 Luxembourg
Multilateral Convention EU Directive DTC
59 Malta
Multilateral Convention EU Directive DTC Multilateral Convention DTC Multilateral Convention DTC
60 Mexico 61 Moldova
62 Montenegro
118 ANNEXES
Jurisdiction 63 Montserratg 64 Morocco 65 Netherlands 66 New Zealand 67 Nigeria Type of EOI arrangement Multilateral Convention Multilateral Convention DTC Multilateral Convention EU Directive Multilateral Convention DTC Multilateral Convention DTC 68 Norway Multilateral Convention EU Directive DTC 69 Poland Multilateral Convention EU Directive DTC 70 Portugal Multilateral Convention EU Directive DTC 71 Romania Multilateral Convention EU Directive DTC 72 73 74 75 76 Russia San Marino Saudi Arabia Serbia Singapore Multilateral Convention Multilateral Convention Multilateral Convention DTC DTC Multilateral Convention Signed 04-Mar-74 Signed 15-Feb-11 Signed 31-Aug-89 Signed 27-Jun-79 Signed 15-Feb-11 18-Aug-94 Signed 15-Feb-11 06-Jun-01 Signed 15-Feb-11 03-Mar-94 Signed 15-Feb-11 24-Jun-94 Signed Signed Signed 26-Feb-01 09-May-05 Signed Date signed Date in force 01-Oct-13 Not yet in force in Morocco 05-Nov-74 01-Sep-13 01-Jan-13 01-Mar-14 02-Dec-90 Not yet in force in Nigeria 28-Dec-79 01-Jun-11 01-Jan-13 21-Dec-95 01-Oct-11 01-Jan-13 02-Nov-04 Not yet in force in Portugal 01-Jan-13 29-Dec-95 Not yet in force in Romania 01-Jan-13 01-May-97 Not yet in force in Russia Not yet in force in San Marino Not yet in force in Saudi Arabia 15-Oct-01 12-Jun-06 Not yet in force in Singapore
ANNEXES 119
Jurisdiction 77 Sint Maartenb 78 Slovenia
Type of EOI arrangement Multilateral Convention DTC Multilateral Convention EU Directive DTC Multilateral Convention DTC Multilateral Convention EU Directive DTC DTC Multilateral Convention EU Directive DTC
Date signed 14-May-03 Signed 15-Feb-11 28-May-98 Signed 08-May-80 Signed 15-Feb-11 26-Jul-78 16-Feb-79 Signed 15-Feb-11 14-Feb-97 07-Feb-11 Signed 18-Feb-09 10-Aug-11 14-Mar-90 Signed 02-Apr-97 Signed 08-Aug-96 05-Nov-90 Signed 15-Feb-11 23-Jan-96 Signed
Date in force 01-Sep-13 11-Jul-04 01-Jun-11 01-Jan-13 30-Jun-99 01-Mar-14 05-Jun-81 01-Jan-13 01-Jan-13 19-Jun-79 08-Oct-80 01-Sep-11 01-Jan-13 23-Dec-97 01-Jan-13 Not yet in force in Switzerland 27-Feb-10 24-Sep-11 25-Oct-91 01-Feb-14 02-Dec-99 Not yet in force in Turkey 26-Jun-98 01-Dec-13 20-Dec-91 01-Oct-11 01-Jan-13 22-Nov-96 01-Sep-13
79
South Africa
80 Spain 81 Sri Lanka
82 Sweden
83 Switzerland 84 Syria 85 Chinese Taipei 86 Tunisia 87 Turkey
Protocol Multilateral Convention DTC DTC DTC Multilateral Convention DTC Multilateral Convention DTC Multilateral Convention DTC Multilateral Convention EU Directive DTC Multilateral Convention
88 Turkmenistan 89 Turks & Caicos 90 UK
91
Ukraine
120 ANNEXES
Jurisdiction Type of EOI arrangement DTC Date signed 08-Oct-93 Date in force 30-Dec-93 Non amended convention in force since 1November 1996 (amended convention not yet in force in USA) 17-Oct-03 29-Jul-09
92 USA
Multilateral Convention
Signed
93 Uzbekistan 94 Vietnam
DTC DTC
06-Mar-03 27-Oct-08
Notes: a. Extension by United Kingdom (receipt by Depositary on 13November 2013 and entry into force on 1March 2014). b. Extension by the Netherlands (receipt by Depositary on 29May 2013 and entry into force on 1September 2013). c. Extension by United Kingdom (receipt by Depositary on 25September 2013 and entry into force on 1January 2014). d. Extension by United Kingdom (receipt by Depositary on 13November 2013 and entry into force on 1March 2014). e. Extension by Denmark (receipt by Depositary on 28January 2011 and entry into force on 1June 2011). f. Extension by United Kingdom (receipt by Depositary on 21November 2013 and entry into force on 1March 2014). g. Extension by United Kingdom (receipt by Depositary on 25June 2013 and entry into force on 1October 2013).
ANNEXES 121
Annex3: 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 563/2009 Coll. on Tax Administration and on amendments and supplements to certain laws (Tax Code) Act 442/2012 Coll. on International assistance and co-operation in administration of taxes (EOI Act)
Banking Laws
Act 483/2001 Coll. on banks and on changes and amendments to certain other laws
122 ANNEXES
Anti-Money Laundering Laws

Act 297/2008 Coll. on the Prevention of Legalisation of Proceeds of Criminal Activity and Terrorist Financing and on Amendments and Supplements to Certain Acts
Others
Act 300/2005 Coll., Criminal Act 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 www.concourt.sk/en/A_ustava/ustava_a.pdf
ANNEXES 123
Annex4: People Interviewed During the On-Site Visit
Ministry of Finance
Unit of International Tax Relations Department of Accounting
Financial Directorate
CLO Unit Anti Fraud Department
Ministry of Foreign and European Affairs Ministry of Justice

Registrar of Companies
Ministry of the Interior

Registrar of Foundations
Financial Intelligence Unit Slovakia National Bank of Slovakia Central Security Depository
ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

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Global Forum on Transparency and Exchange of Information for Tax Purposes
PEER REVIEWS, PHASE 2: SLOVAK REPUBLIC

This report contains a Phase 2: Implementation of the Standards in Practice review, as well as revised version of the Phase 1: Legal and Regulatory Framework review already released for this country. 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.
Consult this publication on line at http://dx.doi.org/10.1787/9789264210080-en. This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical databases. Visit www.oecd-ilibrary.org for more information.
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Direitos autorais:

Global Forum On Transparency and Exchange of Information For Tax Purposes Peer Reviews

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Direitos autorais:

GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE OF INFORMATION FOR TAX PURPOSES

Peer Review Report Phase 2 Implementation of the Standard in Practice

ISBN 978-92-64-21002-8 (print) ISBN 978-92-64-21008-0 (PDF)

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

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

ABOUT THE GLOBAL FORUM 5

About the Global Forum

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

Overview of the Slovak Republic

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

Governance and legal system

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

International issues and exchange of information

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

The Slovak Republics commercial laws and financial sector

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

Compliance with the Standards: AvailabilitY of Information 21

Compliance with the Standards

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

22 Compliance with the Standards: AvailabilitY of Information

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

Compliance with the Standards: AvailabilitY of Information 23

A.1. Ownership and identity information

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

24 Compliance with the Standards: AvailabilitY of Information

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

Compliance with the Standards: AvailabilitY of Information 25

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

26 Compliance with the Standards: AvailabilitY of Information

Information required to be provided to government authorities Commercial Laws

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

Compliance with the Standards: AvailabilitY of Information 27

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

28 Compliance with the Standards: AvailabilitY of Information

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

Compliance with the Standards: AvailabilitY of Information 29

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

30 Compliance with the Standards: AvailabilitY of Information

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

Compliance with the Standards: AvailabilitY of Information 31

Tax Administration Act

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

32 Compliance with the Standards: AvailabilitY of Information

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

Compliance with the Standards: AvailabilitY of Information 33

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

34 Compliance with the Standards: AvailabilitY of Information

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

Compliance with the Standards: AvailabilitY of Information 35

Information required to be held by companies

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

36 Compliance with the Standards: AvailabilitY of Information

PEER REVIEW REPORT PHASE 2 THE SLOVAK REPUBLIC OECD 2014

Compliance with the Standards: AvailabilitY of Information 37

Information held by service providers