Forvis Mazars Central and Eastern European tax guide 2025

The brochure provides an overview of tax systems across the CEE region. Since its launch in 2013 with 15 countries, the guide has expanded steadily and now includes data for 25 jurisdictions.

In addition to the core Central European countries - Hungary, Czech Republic, Slovakia, and Poland (the so called Visegrád Group) - this edition covers Southeast Europe, Germany, Austria, Ukraine, Romania, Moldova, the Baltic states, and contributions from Forvis Mazars offices in Central Asia (Kazakhstan, Kyrgyzstan and Uzbekistan).

The first section presents a country-by-country overview of the tax systems, based on data provided by the respective Forvis Mazars offices. At the end of the guide, summary tables offer side-by-side comparisons of key tax parameters.

We have also included the direct contact details of our offices and experts. We encourage you to reach out with any questions or requests for clarification.

Note that every year the tax guide launches also as an interactive online platform, in which you can compare among various tax parameters and topics, as well as among country-specific information.

Download the static version of our guide or compare countries within the online tool of Forvis Mazars CEE tax guide 2025.

Tax burden on labour and wages: Slovakia in regional comparison

Slovakia ranks among the countries with the highest labour tax burden in Central and Eastern Europe. According to the Forvis Mazars CEE tax guide 2025, the average tax wedge reaches nearly 49%, placing Slovakia on par with countries such as Germany—significantly above both the OECD average (35%) and the CEE regional average (38%).

What is the tax wedge?

The tax wedge represents the proportion of total labour costs that is paid to the state in the form of taxes and contributions. It includes:

• Personal income tax
• Social and health insurance contributions paid by both employers and employees

It is a key indicator for comparing the overall tax burden on labour across countries. A higher tax wedge means employees receive a lower net wage from the total cost of employment, which may affect work incentives, employment levels, and national competitiveness.

Tax wedge comparison in the selected countries of CEE region

Slovakia has the highest tax wedge within the V4 countries and is among the highest in the entire CEE region.

Wages: Slovakia in the mid-range

In terms of average wages, Slovakia is positioned in the mid-range of the region. The average gross wage in the private sector is:

• EUR 1,524 which is significantly lower than in Austria or Germany (over EUR 4,000),
  but higher than in countries such as Ukraine, Moldova, or Albania (under EUR 1,000).
• Average gross salary in Slovakia remains the lowest in the V4 region.

Comparison of average gross wages in selected countries

Note: All wage data in the guide refer exclusively to the private sector. Public sector wages are not included.

PPP: Real purchasing power – a more accurate view of life in the region

One of the most notable additions to this year’s Forvis Mazars CEE tax guide 2025 is the comparison of net wages adjusted for Purchasing Power Parity (PPP). This indicator offers a more realistic view of living standards than nominal wages alone.

What is PPP?

Purchasing Power Parity (PPP) is an economic indicator that compares the value of currencies based on the price of an identical basket of goods and services in different countries. In other words, PPP reflects how much one can actually afford with their wage in a given country.

PPP-adjusted wages take into account not only income levels but also price levels—such as housing, food, services, and transport costs. This enables a more accurate comparison of real living standards across countries with differing prices and tax systems.

Regional examples

• Slovenia vs. Poland: Slovenia’s average gross wage is EUR 700 higher than Poland’s, but after PPP adjustment, net wages are nearly equal—higher living costs in Slovenia offset the wage difference.
• Ukraine vs. Greece: Ukraine’s gross wage is only one-third of Greece’s, but the PPP-adjusted difference is significantly smaller due to much lower living costs in Ukraine.
• Slovakia vs. Czech Republic and Hungary: Slovakia has a higher nominal wage than Hungary, but PPP-adjusted net wages are comparable. In the Czech Republic, PPP-adjusted wages are slightly higher than in Slovakia, due to a lower tax wedge and a more efficient contribution system.

Why is PPP important?

• Investors use it when deciding on locations for production or services.
• Employees can better compare job offers abroad.
• Policymakers and analysts use it to assess the effectiveness of tax systems and social policies.

PPP is therefore a vital complement to wage and tax data, enabling a more comprehensive comparison between countries.

Tax relief for families: Slovakia among regional leaders

Family policy and tax relief for parents play a crucial role in shaping tax systems and supporting employment. Within the CEE region, there are significant differences in how countries account for family status when calculating tax burdens.

Slovakia: Significant reduction in tax wedge

Slovakia is among the countries offering substantial tax relief for families with children. For a family with three children, the tax wedge can be reduced by up to 14–18 percentage points, representing a significant benefit compared to childless employees.

Relief mechanisms include:

• Child tax bonus deducted from income tax
• Deductible items in tax base calculation
• Preferential contributions for parents in certain cases

These measures have a tangible impact on families’ net income and reduce the labour tax burden, thereby supporting parental employment.

Comparison with selected countries in the region

In countries such as Germany or Romania, family tax relief has only a marginal effect on the tax wedge—often symbolic deductions with little impact on net income.

VAT and digital transformation: Slovakia in motion, but with gaps

As of 2025, Slovakia’s standard VAT rate increased from 20% to 23%, placing it among the countries with the highest VAT rates in the region. This change aims to strengthen public finances but also raises price levels and may affect household consumption.

Comparison of standard VAT rates in selected countries

Slovakia has moved from the “mid-range” to the top three countries with the highest VAT in Central and Eastern Europe.

Digital transformation of tax administration: Slovakia lagging behind

In terms of digitalisation of tax administration, Slovakia lags behind regional leaders such as Hungary, Romania, and Poland. These countries have already implemented e-VAT systems that enable:

• Pre-filled tax returns based on online invoicing data
• Automated VAT processing
• Real-time transaction reporting

Regional examples

• Hungary: e-VAT system since 2024, invoice data automatically transferred to draft returns.
• Romania: e-VAT + e-Invoice, mandatory for both B2B and B2C transactions.
• Poland: SAF-T reporting, electronic audit files, mandatory e-Invoice planned from 2026.

In contrast, Slovakia has not yet implemented a comprehensive e-VAT system, despite years of discussion. E-invoicing remains voluntary, and pre-filled returns are not available.

Implications for Slovakia

• The VAT increase may negatively impact consumers, especially low-income groups.
• Insufficient digitalisation increases administrative burden for businesses and limits tax collection efficiency.
• Improvement potential: Slovakia has room to introduce modern tools that simplify tax processes and reduce the risk of tax evasion.

Corporate income tax (CIT) rates: Slovakia vs. the region

Corporate income tax (CIT) is a key indicator of tax system competitiveness. In Central and Eastern Europe, CIT rates vary widely—from the lowest in the EU to nearly double the burden in Western Europe.

Selected country comparison

• Slovakia: As of 2025, the standard CIT rate increased from 21% to 24%, placing Slovakia among the countries with higher corporate tax burdens in the region. This rate applies to all legal entities regardless of size.
• Hungary: CIT rate is 9%, the lowest in the EU. Hungary maintains its attractiveness for foreign investors, although some sectors (e.g. energy, banking) face additional taxes.
• Poland: Standard rate is 19%, but small businesses with annual turnover up to EUR 2 million can benefit from a reduced rate of 9%. Poland thus supports SME development.
• Czech Republic: CIT rate is 21%, with no significant exceptions. The Czech system is standard within the EU, without major tax incentives.
• Germany: Combined CIT rate (including solidarity surcharge and local income tax) can reach up to 30%, one of the highest in the region. Nevertheless, Germany remains attractive due to market stability and size.

Trends and insights

• Slovakia’s rate increase responds to the need for public finance consolidation but may reduce competitiveness compared to neighbouring countries.
• Hungary’s low CIT model is exceptional but supplemented by sectoral taxes that can significantly raise the effective burden.
• Poland and Slovakia offer reduced rates for small businesses—a key tool for supporting entrepreneurship.
• V4 countries range from 9–24%, with Slovakia currently at the upper end of the spectrum.

Download the static version of our guide or explore the online Forvis Mazars CEE Tax Guide 2025 tool. If you are interested in consulting the tax implications for your business, the Forvis Mazars expert team is available to assist you.