Attendance at International Insolvency Conference


Mr Jaroslav Nižňanský took part in an international conference in Prague. The conference, organized by INSOL Europe, focused on bankruptcies and restructurings/reorganisations, mainly in automotive and energy sectors across Europe.

Conference on Changes in Slovak Tax Legislation


Ms Lucia Huntatová has recently attended a tax conference in Bratislava. The main aim of the conference was to explain changes in Slovak tax legislation in 2014, comparing the new rules against the former legislation and giving some practical implications. We will bring you more information about what is new in Slovak tax rules in one of our coming News.

Doing Business 2014


At the end of last year the World Bank has issued Doing Business 2014 Report to which also members of our law firm have contributed. You can download the Doing Business 2014 Report on this page:

Amendment to Commercial Code


Act No. 246/2012 Coll. on Amendment to Act No. 222/2004 Coll. on Value Added Tax as amended and amending certain other acts (the “Amendment”) amends the provisions of Act No. 513/1991 Coll. Commercial Code as amended (the “Commercial Code”), and tax regulations. The Amendment’s provisions, effective as of October 1, 2012 will touch on the process of establishment of a limited liability company (the “Company”), and the transfer of ownership interest in the Company.

Under transitional provisions relating to the amended provisions of the Commercial Code, the registration procedures for registering, in the Commercial Register, the Company and a change in the identity of its shareholder initiated prior to effective date of the Amendment will be completed in accordance with provisions effective up to September 30, 2012.

As of October, 1, 2012 no person that has underpayments on taxes will have the right to establish the Company. It can be inferred from the provisions of Act No. 563/2009 Coll. on Tax Administration (Tax Code) and Amending Certain Other Acts that the absence of such underpayments is proven by tax administrator’s consent with the registration of the Company in the Commercial Register (the „Consent“). Such Consent will be granted to each founder separately and must be annexed to the application for the Company registration with the Commercial Register.

Condition for Consent is that underpayments on all taxes must not exceed EUR 170 in total. The relevant tax administration authority, i.e. tax authority, or customs authority for excise duties, grants the Consent within three (3) working days of application. The amount of fee for Consent has not been set by List of Administrative Fees annexed to Act No. 145/1995 Coll. on Administrative Fees as amended, and so, for the moment, the tax authority will grant the Consent free of charge.

According to the amended provisions of the Commercial Code, an application to register a change in identity of a Company shareholder in connection with a transfer or split, by contract, of an ownership interest (the „Registration“) must be accompanied by the Consent in respect of both the transferor shareholder and the transferee. As a result, compliance with tax obligations owed by the parties to such ownership interest transfer or split will be a requirement for executing such transfer or split.

The amended provisions of the Commercial Code provide a set of exceptions when the Consent is not required. First of all, it will be in a situation where the transfer or split does not concern a majority ownership interest. The ‘majority ownership interest’ means, under the Commercial Code, an ownership interest to which at least one half (1/2) of votes of all shareholders are attached under the Commercial Code or Memorandum of Association. The Consent is neither required where the Company acquires / transfers its own ownership interest in accordance with the Commercial Code, nor where the ownership interest transfer or split occurs within a merger, consolidation, demerger or other winding-up of the Company without liquidation. Provisions on the Consent do not apply to a foreign person, whether as a transferor shareholder or transferee. Where the Consent obligation does not apply, the transferor shareholder and transferee must produce a written statement on absence of such Consent obligation.

Changes regarding transfer or split of a majority ownership interest will only take effect on the date of Registration. Transfer of minor ownership interest will take effect against the Company on the date of delivery of the ownership interest transfer or split agreement to the Company, but not earlier than after a prior consent with such transfer or split was obtained from the General Meeting of the Company, where the Memorandum of Association requires such consent.

Related to Commercial Code amendment are those provisions of the Amendment that introduce an obligation for the taxable person who applied for value added tax registration to deposit a tax bond in specific cases. These are primarily where:
• a natural person as an executive or a shareholder of the taxable person has, as at the date of application, underpayments on tax of EUR 1,000 or more (the “Underpayment”);
• an executive or a shareholder of the taxable person is an executive or a shareholder in another legal person that has Underpayment as at the date of application;
• the taxable person is a natural person who is an executive or a shareholder in a legal person that has Underpayment as the date of application;
• as at the date of application, the taxable person carries out only preparation for its business.

The changes introduced under the Amendment mean that time required for incorporation of the Company, and for effecting major ownership interest transfer or split, will be extended by such time as is required to obtain the Consent and to meet the obligation, where applicable, to deposit a tax bond during the value added tax registration process.


© JNC Legal s.r.o. 2012
The content of this notice does not constitute legal advice and should not be relied on as such. We suggest that specific advice be sought about your specific circumstances.

Amendment to Social Insurance Act


On September 1, 2012 Act No. 252/2012 Coll. on Amendment of Act No. 461/2003 Coll. on Social Insurance as amended (the “Social Insurance Act”) and amending and supplementing certain acts (the “Amendment”) was published in the Collection of Laws. Provisions of the Amendment enter into force on September 1, 2012, January 1, 2014 and August 1, 2016, but most of the provisions enter into force on January 1, 2013. A number of the provisions affects directly entrepreneurs, whether as employers or as self-employed persons.

Provisions of the Amendment which entered into force on September 1, 2012 mean for an employer only a temporary administrative burden. In connection with a redistribution of contributions between the first and the second pillar of the Slovak pension system, it is recommended for an employer to ensure an adjustment of employee contributions reports. However, the amount of contribution in total remains unchanged.

With the effect from January 1, 2013 the personal scope of the sickness, pension, but also public health insurance widens to a different degree for employees working under agreements on work performed outside an employment relationship (in Slovak “práca na dohodu”). Costs of employment of these employees will increase, with some exceptions, to the level of costs of regular employees. Therefore, employers should consider whether and in which form to employ workers under an agreement on work performed outside an employment relationship. In connection with this change, the employer should take some necessary bureaucratic steps.

The Amendment will negatively affect also costs of employment of regular employees. The change will concern especially employees earning multiples of the average monthly wage in the Slovak economy, and their employers, due to an increase in the maximum assessment base for the calculation of contributions. However, the amount of benefits remains the same. The same change affects self-employed persons.

Self-employed persons should expect increased costs in connection with the change in the manner of calculation of the assessment base for the amount of contributions. After the transitional period, this change could mean an approximately one-third increase in the social and public health insurance costs.

Other provisions of the Amendment have no direct implications for the business environment but they have effect on the standards of living of the insured persons. The old-age pension calculation in the first pillar changes so that persons with higher income will participate to a greater degree in old-age pensions of those insured persons whose incomes are lower. An important but only transitive change is the valorization of pension benefits by a fixed amount, independently from the amount of individual pension.

The second pillar of the Slovak pension system will become voluntary again with a possibility to decide to participate in it until the designated age. An interesting change is the possibility to make voluntary contributions to the second pillar as tax allowance. In connection with the change in the ratio of contributions to the first and the second pillar and with changes in pension funds, the current savers will have the right to withdraw from the second pillar until January 1, 2013.

Should you be interested to learn more about the latest amendment to the Social Insurance Act, we will be happy to inform you in more detail upon request.

© JNC Legal s.r.o. 2012
The content of this notice does not constitute legal advice and should not be relied on as such. We suggest that specific advice be sought about your specific circumstances.

Draft Amendment to the Labour Code


Governmental Draft Amendment to Act No. 311/2001 Coll. Labour Code, as amended (hereinafter as „the Labour Code“) along with the last amendment to Act No. 461/2003 Coll. on Social Insurance, as amended, is yet another step to improve the status of the employee. On the other hand, it may cause a further substantial financial burden for the employers. In the following article we provide you with a summary of the most important changes. Employers should thoroughly assess the anticipated changes and get ready for them with a view that the draft amendment may be passed by the Parliament with no major modifications.

The draft amendment, that also applies to labour law relations existing to date, is designed to enter in force and effect as of January 1, 2013. Governmental draft does not provide employers with sufficient time for implementing the necessary measures, and that not even in its transitional provisions. It is therefore up to the employer to take any measures that it might consider appropriate to its situation by no later than December 31, 2012.

Definition of the dependent work has changed. Many activities formerly done by sole entrepreneurs under commercial agreements will become illegal. In the case the employer will not appropriately adapt such contracts, he will run the risk of sanctions for illegal work.

According to laws valid and effective to date, in the collective agreement the employer may, in several cases, stipulate more favourable conditions for himself than those provided by the Labour Code. This option will be no longer available and the existing provisions of collective agreements that contravene with the new wording of the Labour Code shall become null and void. Should the employer stick to the formerly agreed conditions, he or she may be sanctioned by competent authority.

Important changes are planned also as regards termination of employment. More importantly, concurrence of notice period and severance pay and obligation of the employer to negotiate termination of employment with employee's representatives is planned to again come into effect. Employer’s relocation as one of the reasons for notice by the employer should be conditional on employee’s disapproval with such relocation. In addition, such reason for notice shall not apply during the protected period of prohibition of notice.

Working time should be affected by negative changes. Employee representatives should have more say in implementation of unevenly distributed working time, flexible working time, work standards and of what is known as “flexikonto“, which should all come together as  a ‘working time account’. It will be no longer permissible to agree on 56 hours' average weekly working time with executive employees or on 550 hours of overtime work per year (under new amendment, it will be only 150 hours per year). It will not be possible to agree or impose a larger scope of overtime in the collective agreement. Save for executive employees and other statutory exceptions, it will not be possible to include overtime work into regular wage. The currently valid provisions of collective agreements and employment contracts concerning the above should become invalid.

The draft amendment should also restrain what is called “chaining of employment relations for definite period”. It should also mean increase of costs for employing under agreements on work performed outside an employment relationship, as e.g. provisions on minimum wage and working time schedule should be applicable to these relationships.

The proposed wording should simplify the creation of trade unions and should translate into additional costs for the employer relating to activities of employee representatives. In addition, it is also proposed that the scope of measures be broadened that can be implemented only upon agreement with employee representatives. Where there are no employee representatives, the employer may not implement some of these measures individually or upon agreement with respective employee.

Should you be interested to learn more about the proposed draft of amendment to the Labour Code and how to minimize its negative implications for your business, we will be happy to inform you in more detail upon request.

© JNC Legal s.r.o. 2012
The content of this notice does not constitute legal advice and should not be relied on as such. We suggest that specific advice be sought about your specific circumstances.



Since 30.4. our new web page is active.

Seminar in Prague


Partner Jaroslav Niznansky will participate at international insolvency seminar in Prague an 13.-14.04.2012

New colleague


In March 2012 new colleague Jozef Bendík has joined our team.