Depreciation of Assets from 1 January 2026

In May of this year, the National Council of the Slovak Republic approved an amendment to the Income Tax Act, which modifies the current rules on the depreciation of selected assets. The purpose of this amendment is to introduce preferential treatment for certain types of assets based on their utilisation. Below, we provide detailed information on the changes that will take effect from 1 January 2026.

According to the amendment, the preferential treatment applies to technical improvements of buildings used for accommodation services or for sporting activities. These provisions are intended to support businesses operating in the tourism and sports sectors.

◻ Technical Improvements Related to Accommodation

The amended Income Tax Act introduces a new category of asset – another depreciable asset. Such an asset is defined as:

• the total cost of technical improvements and repairs carried out on a building classified under Building Classification Code 121, used for providing accommodation services under a rental agreement and associated services, amounting to at least 10% of the building’s acquisition cost

This definition also applies to buildings leased for the same purpose under a tenancy agreement. According to the Building Act, buildings classified under Code 121 include:

• hotel buildings
• other short-term accommodation facilities
• Conditions for Applying Depreciation

The new rules clarify the conditions for entering into an accommodation agreement that allows for the depreciation of buildings and their technical improvements. Such an agreement must specify:

• The client’s right to temporary accommodation
• The agreed duration of the stay according to the purpose of the accommodation (e.g., hotel, hostel, or lodging house)

These requirements are governed by Sections 754–759 of the Slovak Civil Code.

◻ Technical Improvements Related to Sports

Similarly, a new asset category has been introduced in the law for buildings (assets) used for sporting purposes. The definition is as follows:

• the total cost of technical improvements and repairs carried out on a building or structure classified under Building Classification Codes 1265 and 241, used for sporting activities, amounting to at least 10% of the acquisition cost of the building or structure

This definition also applies to leased buildings used for the same purpose. Buildings falling under Codes 1265 and 241 include:

• sport facilities
• Recreational and sports structures, such as sports fields and other related constructions
• Determination of Acquisition Cost

The acquisition cost for sports-related assets is the purchase price, including any costs incurred in acquiring the asset, less any reductions to this price.

For assets acquired as a gift from an individual, the acquisition cost is the value determined at the donor’s side, provided the asset was not part of the donor’s business assets and would not have qualified for tax exemption if sold on the date of donation.

◻ Depreciation Rules

The amended Annex No. 1 of the Income Tax Act adds the following items to Depreciation Group 2 without a specified KP code:

Depreciation requires the adjustment of the depreciation plan for these technical improvements carried out on buildings or structures used for accommodation or sports, over a period of six years, with depreciation calculated separately for each improvement rather than combined with the building or structure.

In addition, the depreciation period for the buildings or structures themselves may be adjusted once they meet the classification and technical improvement conditions:

• maximum depreciation period: 40 years (6th depreciation group)
• minimum period for the 6th group: 20 years

This amendment does not change the classification of the 6th depreciation group but introduces the option to shorten the depreciation period for buildings and structures designated for a specific purpose.

Non-Compliance with Depreciation Conditions

If the conditions for depreciating technical improvements are not met from 1 January 2026, taxpayers must follow the previous rules – i.e., repair costs are included in the acquisition cost of the building or structure and accounted for in its depreciation.

Technical improvements acquired and put into use in 2024 will not be reassessed under the new rules but will continue to be included in the acquisition cost as before.

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