Slovakia Patent Box Regime

Slovakia's Income Tax Act includes a tax exemption for intangible assets commonly described as a patent box. PwC states that amendments effective since 1 January 2018 introduced a 50% exemption for income from granting the right to use, or using, a protected patent, utility model, or software created by the taxpayer (the basic patent box).

An extended exemption can also apply to a portion of income from selling goods manufactured on the basis of a protected patent or utility model, using an allocation method that deducts related costs and a profit margin. The exemption is limited to assets created by the taxpayer's own activities and is applied in tax periods where amortisation of the intangible asset is included in tax expenses.

If the taxpayer used intangible research results acquired from another person to develop the intangible assets, the exemption is reduced by a coefficient. Entities applying the exemption are entered in a public register kept by the Financial Directorate of the Slovak Republic.

In practical terms, a 50% income exemption roughly halves the corporate tax rate on qualifying income. PwC notes Slovakia applies tiered corporate income tax rates from 1 January 2025 (10%, 21%, and 24% depending on taxable income), so the effective patent box rate will vary accordingly.