Slovakia: temporary suspension of emission allowances tax


The 2011-12 tax on emission allowances has been suspended until the Constitutional Court rules on its constitutionality.

The suspension came just in time, as the relevant advance on tax is payable twice-yearly and the next deadline for payment together with the deadline for submission of the first tax return is approaching (30 June).

The tax has a very high rate (80%) and is payable on any monthly emissions allowances that are unused in that month by a participant in the emissions trading scheme. It only applies to allowances in 2011-12, as a new five-year scheme is being adopted for allowances in 2013-17.

Members of the Slovak parliament initiated the decision by the Constitutional Court to suspend the relevant provisions of the Emissions Trading Act.

The introduction of the tax is not only controversial within the Slovak Republic but is already being looked into by the European Commission. The implications of the Constitutional Court’s decision are uncertain as yet but, if it does declare the tax to be unconstitutional, it is quite possible that some businesses that have been subject to the tax will sue the Slovak Republic for damages.

Law: Act no. 572/2004 Coll. on emissions trading, as amended