German companies paid Slovakia nearly €1.7 billion in taxes and levies in 2024. The automotive industry continues to dominate as the largest contributor to the state budget among firms with foreign investors.
However, skepticism among German investors operating in Slovakia is growing year by year, with one-third of them also considering layoffs. This was confirmed by a survey commissioned by the German-Slovak Chamber of Commerce.
Almost half of the German companies operating in Slovakia plan to reduce their investments, while only one in twenty plans to increase them. Further increases in taxes and levies are also seen as problematic.
Tax expert Renáta Bláhová commented on the introduction of progressive income taxation, which will be part of next year’s fiscal consolidation plan:
“We originally wanted to attract brains and turn assembly lines into centers of innovation. With this progressive tax rate, it will be the opposite — we’ll scare them away. These people are the drivers of our economy, the experts and the brains,” she said.
In this context, nearly three-quarters of surveyed German companies perceive poor business conditions in Slovakia. Another major issue is the high energy prices faced by industrial firms.
“We hear from German companies that they pay higher electricity prices in Slovakia than they do back home in Germany. It’s also a political issue,” said Markus Halt from the German-Slovak Chamber of Commerce.
The Ministries of Finance and Economy have been asked to respond to the survey’s findings but have not yet provided answers.
Although one-third of German companies in Slovakia are considering layoffs, the president of the Automotive Industry Association, Alexander Matušek, believes that German car manufacturers should not be affected over the next two years.
“The new electric Porsche is coming. Employment will rise and then gradually decline as older models are phased out. The Touareg, for instance, ends production next year, which will have some effect,” he explained.
However, the head of macroeconomic analysis at the Council for Budget Responsibility, Zuzana Múčka, warned of concrete risks for car manufacturers in Slovakia.
“Compared to countries like Portugal or Spain, we are becoming expensive. These are only 2024 data, but with next year’s fiscal consolidation package, it could get significantly worse,” she cautioned.
According to the latest Taxparency study, German companies remain among Slovakia’s most reliable and responsible taxpayers.
Source: STVR
