For IT freelancers & remote founders
Slovakia for IT freelancers: živnosť vs s.r.o., decided on the numbers
If you are a foreign IT contractor or remote founder, the real question is not whether to base in Slovakia — it is which structure. Below about 33 333 € income with low costs, a živnosť (trade licence) on the 15% flat rate is usually cheapest and simplest. Past that, or if you want limited liability, an s.r.o. wins. Here is the 2026 maths, in English.
- 15% flat income tax for sole traders up to 100 000 € taxable income
- 60% flat-rate expenses, capped at 20 000 € — no receipt tracking
- EU single market & the euro natively — no FX on EU invoices
- We run the numbers both ways before you register
Živnosť tends to win if…
- Income under ~33 333 € with low real costs
- Pure service / software work, solo
- You want the simplest possible books
- You value social & pension entitlement from contributions
Why Slovakia for IT
An EU, euro base with a genuinely flat sole-trader tax
Inside the EU & euro
Full EU single-market access and the euro natively. You invoice EU clients in euros with no conversion, use reverse charge for cross-border B2B services, and file EU VAT/OSS from one country.
Flat 15% sole-trader tax
A živnostník pays a flat 15% on taxable business income up to 100 000 € a year — with 60% flat-rate expenses and no double-entry bookkeeping.
10% for small companies
An s.r.o. with revenue up to 100 000 € pays a reduced 10% corporate rate (21% standard above), and dividends to a resident are taxed at just 7%.
The core decision
Živnosť vs s.r.o. — how the two structures actually differ
Both let a foreign IT professional bill EU and global clients from Slovakia. They differ in tax layers, liability, cost of running, and the social cover you build.
Trade licence (sole trader)
- One tax layer: 15% flat income tax up to 100 000 €
- 60% flat-rate expenses, max 20 000 € — no receipts
- Contributions (425,03 €/mo min) build pension & sickness cover
- Simple single-entry tax records
- You are personally liable for business debts
Set up via the trade licence office (živnosť).
Limited company
- Two tax layers: 10% corporate (≤ 100 000 €) + 7% dividend
- Deduct real costs — better once expenses are high
- Limited liability — the company is separate from you
- More credible for enterprise / procurement clients
- Double-entry bookkeeping; 5 000 € share capital
Set up via company formation or založenie s.r.o.
The numbers, worked
A worked example: 60 000 € a year, low costs
Take a foreign backend/DevOps contractor invoicing 60 000 € a year to EU and US clients, with little in real expenses. Here is the 2026 comparison. Figures are orientational — contribution amounts and the personal allowance depend on your profile — but the rates are current.
As a živnosť
| Income | 60 000 € |
| Flat-rate expenses (60%, capped) | −20 000 € |
| Contributions (min, ~425,03 €/mo) | −5 100 € |
| Taxable base | ≈ 34 900 € |
| Income tax (15%) | −5 235 € |
| Net in your pocket | ≈ 49 665 € |
One tax layer. Contributions rise from year two as they are recalculated from profit, so steady-state net is somewhat lower — but you build pension & sickness entitlement.
As an s.r.o.
| Revenue | 60 000 € |
| Running costs (approx.) | −4 000 € |
| Profit before tax | 56 000 € |
| Corporate tax (10%) | −5 600 € |
| Dividend tax (7%) | −3 528 € |
| Net to owner | ≈ 46 872 € |
Two tax layers, but limited liability and full real-cost deduction. A pure-dividend owner builds no state pension and must arrange health insurance separately.
The threshold to watch
Why 33 333 € is the number that changes the answer
The 60% flat-rate expense deduction is capped at 20 000 € a year. That cap is reached at exactly 33 333 € of income (60% × 33 333 € = 20 000 €). Below it, you deduct a genuine 60% of everything you earn. Above it, the deduction stops growing — so your effective expense rate shrinks the more you earn, and your taxable base climbs faster.
That is the point where an s.r.o. that deducts real costs — salaries, subcontractors, equipment, travel — and pays the 10% reduced corporate rate often overtakes the živnosť. If you are comfortably under 33 333 €, stay simple. If you are pushing past it with real business expenses, model the company route. We do that calculation for you rather than guessing.
Cross-border invoicing
VAT, reverse charge and EU clients
Most foreign IT freelancers invoice business clients abroad. For EU B2B services that is normally a reverse charge: you charge no Slovak VAT, and the client accounts for it — but you usually need an EU VAT ID registered first, even below the domestic threshold. Domestic VAT registration becomes mandatory once turnover hits 50 000 € in a calendar year (immediate above 62 500 €). Get this wrong and you either over-charge EU clients or miss a filing. We set up the right VAT status for how you actually bill — see our accounting and payroll services if you later hire.
What we handle for IT freelancers & founders
Structure decision
We model živnosť vs s.r.o. on your real income, costs and liability needs — and tell you which is cheaper and simpler for you.
Setup & registration
Trade licence or s.r.o. registration, tax and VAT registration, and the EU VAT ID for cross-border invoicing.
Ongoing in English
Bookkeeping, contributions, VAT recap statements and the annual return — run for you, explained in plain English.
IT freelancer — živnosť vs s.r.o. FAQ
Živnosť or s.r.o. — which is better for a solo IT contractor?
Below roughly 33 333 € of annual income with low real costs, a živnosť (trade licence) usually wins: one tax layer at 15%, 60% flat-rate expenses, and no double-entry bookkeeping. An s.r.o. becomes more attractive when you want limited liability, need credibility for enterprise clients, keep profit inside the company, or grow past the 20 000 € flat-rate expense cap. We model both on your real numbers before you commit — see company formation.
How much tax does a Slovak sole trader (živnostník) actually pay?
Personal income tax is a flat 15% while your taxable business income stays under 100 000 € a year. Above that, progressive bands of 19% / 25% / 30% / 35% apply. You can deduct 60% flat-rate expenses (max 20 000 €) instead of tracking receipts, and paid social + health contributions are deductible on top of that cap.
What are the minimum social and health contributions in 2026?
For a self-employed person (SZČO) the 2026 minimums are 303,11 €/month to the Social Insurance Agency (Sociálna poisťovňa, 33.15% of a 914,4 € base) plus 121,92 €/month in health advance payments — 425,03 €/month total. New trades are exempt from social insurance in the first year (health only); from year two contributions are recalculated from your actual profit and rise with it.
Do I need to register for VAT?
Domestic VAT registration is required once turnover reaches 50 000 € in a calendar year (you become a payer from the next year; crossing 62 500 € makes you a payer immediately). Separately, if you provide services to EU business clients, those are typically reverse-charged — you charge no Slovak VAT but usually need an EU VAT ID first. We handle the registration and the recap statements.
Can a non-resident or digital nomad register a živnosť?
EU/EEA nationals can register a Slovak trade licence straightforwardly. Non-EU nationals generally need a residence and business basis in Slovakia. The regime works best when you are genuinely tax-resident in or operating from Slovakia — a low-tax invoice alone does not override your home country's residence and controlled-company rules. We assess substance and residence with you first.
Why Slovakia rather than another EU country?
Slovakia is inside the EU single market and the eurozone: you invoice EU clients in euros with no FX conversion, use EU-wide VAT/OSS and reverse charge, and provide services freely across the bloc. Add competitive costs, the flat 15% sole-trader rate and the 10% reduced corporate rate for smaller companies, and it is one of the cleaner EU bases for a remote IT business.
Not sure which structure fits?
Send us your expected income, costs and clients — we run živnosť vs s.r.o. side by side and tell you which wins, the same business day.
Get a free quote