Taxation of sale of NPF bonds

The Ministry of Finance recently issued their view on taxation of NPF bonds, which have been issued to Slovak qualifying individuals as part of the privatisation process.

According to the Ministry of Finance, income of individuals resulting from receipt of NPF bonds free of charge is not subject to income tax. For individuals, in most cases, any income from sale of such bonds will be tax exempt. However, the correct tax treatment is not clear from the interpretation of the Ministry in the situation when an individual sells bonds within a year of acquisition for a price higher then nominal price (10,000 Sk.). In our view, the profit from such a sale should be tax exempt according to the Income tax act, in the same way that it is exempt for legal entities. Further clarification may need to be provided by the ministry to confirm this conclusion.

Persons authorised to acquire NPF bonds.

As of 26 August 1996, the National Property Fund registered in total 86 physical persons and legal entities authorised to acquire NPF bonds and to use them for settling of liabilities to NPF or for other purposes specified by law.

For further information please contact Paul Antrobus or Richard Fletcher, Arthur Andersen, Prague, tel +42 2 2440 1300, or enter text search 'Arthur Andersen' and 'Business Monitor'

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