The Financial Administration is a modern, pro-client institution. The Financial Administration came into existence as of 1 January 2012 through the merger of the former Tax Administration and Customs Administration into a single organisation. The setting-up of the Financial Administration was preceded by the resolution to reform the administration of customs and taxes with a view to unifying the collection of taxes, duties and public insurance contributions through the UNITAS programme.
Based on the Act No 35/2019 [new Window; only Slovak language], the Financial Administration comprises the Financial Directorate of the Slovak Republic, customs offices, tax offices and the Criminal Office of the Financial Administration. As an institution wholly funded from the state budget, the Financial Directorate of the Slovak Republic operates throughout all the territory of the Slovak Republic. The Financial Directorate of the Slovak Republic has its seat in Banská Bystrica. Customs offices, tax offices and the Criminal Office of the Financial Administration are financed from allocations from the budget of the Financial Directorate of the Slovak Republic.
The statutory body of the Financial Directorate of the Slovak Republic (“SR”) is its President. The President is appointed and removed by the Minister of Finance of the SR. The President manages and controls the Financial Administration and accounts for its operations to the Minister of Finance of the SR.
The main mission of the Financial Administration is to effectively collect and administer duties and taxes in order to provide revenue for the state budget of the SR and the budget of the European Union (“EU”), and protect the state’s economic interests and guard state budget expenditure.
- Carries out the duties following from its main purpose, particularly in the field of countering violations of customs and tax laws;
- Exercises the supervision of compliance with the laws of general application, the legislation of the EU and international treaties through which the trade policy, customs policy, tax policy and the common agricultural policy are implemented in connection with the circulation of goods in trade with third countries;
- Exercises the supervision of goods within the customs territory of the EU in relation to the administration of indirect taxes and tax supervision of excise goods;
- Provides mutual international assistance and cooperation in tax and customs administration matters and in the recovery of financial claims;
- Carries out duties in the areas of customs tariffs, duty rates, the customs value and classification of goods under the combined nomenclature, the origin of goods and statistics of trade with third parties and between the Member States of the EU;
- Performs other duties arising for it from relevant laws.
The Financial Administration has undergone massive changes since its founding in 2012. It has successfully launched an array of projects aimed at improving tax and duty collection efficiency, fighting fraud and implementing measures to support clients. The excellent tax and duty collection performance and tax fraud countering efforts in the recent years have yielded an increase in state budget revenue of approx. EUR 3.7 billion and reduced the tax gap from 41 to 26 per cent.
As an essential measure, the obsolete and poorly functioning information system was replaced by a new one. The productive operation of the Financial Administration’s integrated information system for tax administration (“integrated IS”) was launched as at 1 March 2015. The new system provides more security and retrospective changes in data are disabled. The system provides full user support for the administration of taxes and is subject to updates to reflect changes in legislation and enable interfacing with other internal and external information systems. The integrated IS has provided the necessary basis for the development of electronic communication and better provision of services by the Financial Administration.
The Financial Administration extended the electronisation efforts to the customs area, too. The Central Electronic Mailbox (“CEM”) [new Window] facilitates electronic services in the area of foreign trade transactions with the involvement of both the business sphere and general government bodies. The Financial Administration has launched the electronic customs clearance system and the rate of customs declarations filed by electronic means as at the year-end of 2017 was 99.7%.
The electronic communication has also been extended to the tax area. With the Financial Administration Portal, citizens are able to manage their tax and customs related matters from the comfort of their homes, avoiding any physical visits to authorities. More than half million taxpayers, including VAT payers, incorporated legal entities as well as business natural persons have been communicating with the Financial Administration by electronic means. The Financial Administration Portal was launched as of 1 January 2014 and it functions as a one-stop service providing information to all types of client.
The Financial Administration has gradually opened itself to people and started to communicate with them on-line. In 2013, the Financial Administration was appreciated by the public as the best communicating state institution of Slovakia. The Financial Administration was the first state institution to use social networks. More than 60,000 entities have been communicating with the Financial Administration via its Facebook page. The Financial Administration launched a tax and customs centre in 2014 which handles nearly 200,000 telephonic and 60,000 e-mail enquiries a year.
In 2016, the Financial Administration gained primacy as the first state institution to participate in the service quality evaluation by a digital application: the Financial Administration’s staff can be rated using the Staffino application [new Window].
The Financial Administration has also made big achievements in fighting tax fraud. A number of tax fraud countering measures were implemented already in 2012. Those most significant include the introduction of the VAT ledger statement which has largely curtailed opportunities for VAT related fraud. Working together with the Police Force of the SR [new Window] and the Prosecutor General’s Office of the SR [new Window], the Financial Administration established the Tax Cobra, which was the first time ever in the history of Slovakia that cross-institutional teams were set up to jointly fight fraud. The Excise Stamp Information System put in operation in 2014 has helped to counter persistent fraud in the areas of excise duties and excise stamps. The Financial Administration put the control function into the public’s hands: it launched an application where people are able to check their cash register receipts and excise stamps.
As another fraud countering instrument, the Financial Administration has developed active cooperation with the EU Member States, OECD countries and the USA, including exchange of selected information on taxable entities. The automated information exchange is an important instrument to improve the efficiency and effectiveness of tax collection and to eliminate cross-border tax transfers as a tax evasion means.