Transfer pricing documentation shows that prices between related parties follow the arm’s length principle. Slovakia and the Czech Republic treat it very differently: Slovakia imposes a statutory duty to keep documentation in three tiers (abbreviated, basic and full), while the Czech Republic has no general statutory documentation duty — companies keep it because they bear the burden of proof. Both countries, however, require certain larger taxpayers to file a related-party appendix with the corporate tax return.
What is transfer pricing documentation?
Related parties — companies or people linked by capital or management — must trade at prices that independent parties would agree, the so-called arm’s length principle. Transfer pricing documentation is the written evidence that this rule is met. It matters not only to multinationals but also to small companies trading with a sister entity.
The two countries share this concept but build very different obligations on top of it. If you operate in both markets, our Slovak tax advisory can help you keep the two regimes apart.
Slovakia: a statutory duty with three tiers
Slovakia sets the documentation duty in Section 18 of Act No. 595/2003 on income tax, with the content specified by a Ministry of Finance guideline. It recognises three tiers — abbreviated, basic and full — and the tier depends on whether the transaction is domestic or cross-border, how significant it is, and how the company reports.
A transaction is generally significant once income or a tax-deductible cost exceeds EUR 10,000 (or a loan principal exceeds EUR 50,000). Abbreviated documentation covers mainly domestic significant transactions and, since 2025, is satisfied by correctly completing the relevant table in the corporate tax return. Full documentation applies mainly to IFRS reporters and cross-border transactions with non-treaty states.
The Czech Republic: no general duty, but you must prove
The Czech Republic takes the opposite approach. Under Section 23(7) of Act No. 586/1992 on income taxes, prices between related parties must match the usual (arm’s length) price, but there is no general statutory duty to keep formal documentation. The taxpayer nevertheless bears the burden of proof, so documentation is a practical necessity rather than a legal formality.
The recommended structure follows Guideline GFŘ D-34, based on the OECD model: a Master File for the group, a Local File for the taxpayer, and Country-by-Country Reporting for large multinational groups.
Who must file the related-party appendix?
Both countries collect summary data through the tax return. In the Czech Republic, a separate appendix (Overview of Transactions with Related Parties) is mandatory for a taxpayer who transacted with a related party and meets at least one threshold: total assets over CZK 40 million, net turnover over CZK 80 million, or more than 50 employees.
In Slovakia, correctly completing the transfer pricing table in the corporate income tax return can itself discharge the abbreviated documentation duty for domestic transactions. In both systems, the return data help the tax authority select cases for audit.
What does the documentation contain?
In both countries meaningful documentation typically includes a description of the group and its relationships, a functional analysis (functions, assets and risks), a description of the controlled transactions and their value, the chosen transfer pricing method with justification, and a comparability analysis proving the market level of the price.
Slovak full and basic documentation is formally split into a general and a specific part; the Czech Master File / Local File structure serves the same purpose. The depth scales with the significance of the transactions in both regimes.
Deadlines and penalties compared
In Slovakia documentation is submitted only on request, within 15 days of the request being delivered, and failing to keep it can trigger a fine of up to EUR 3,000, repeatable. In the Czech Republic there is no specific fine for missing documentation; instead, if the arm’s length price is not proven, the tax authority sets it and increases the tax base, adding penalties and late-payment interest.
The practical outcome is similar — poor documentation costs money — but the legal trigger differs: a direct fine in Slovakia, an additional tax assessment in the Czech Republic.
How to prepare in both countries?
Start by mapping your related parties and the transactions that cross the relevant thresholds. In Slovakia, focus on the correct return table for domestic transactions and full documentation for significant cross-border ones; in the Czech Republic, prepare Master File and Local File documentation for material transactions even though it is not compulsory.
In both markets, documentation prepared in advance is far cheaper than a dispute during an audit, and it keeps the two legal regimes — and their very different logic — properly separated.
Uncertainty about which transfer pricing documentation applies to you can cost time and money during an audit. We are happy to assess your related-party transactions and prepare documentation in the correct scope in both Slovakia and the Czech Republic.
FAQ
Who must keep transfer pricing documentation in Slovakia and the Czech Republic?
In Slovakia, any taxpayer with significant controlled transactions between related parties must keep documentation, in one of three statutory tiers. In the Czech Republic there is no general statutory duty to keep documentation, but the taxpayer bears the burden of proving arm’s length prices, so it is needed in practice. Both countries require larger taxpayers to file a related-party appendix with the tax return.
What is the difference between the two regimes?
Slovakia imposes a formal documentation duty (abbreviated, basic, full) under Section 18 of the Income Tax Act, with a direct fine of up to EUR 3,000 for non-compliance. The Czech Republic has no such duty; under Section 23(7) prices must simply be at arm’s length, and the risk of missing documentation is an additional tax assessment rather than a fine. Only the Czech appendix uses fixed size thresholds.
How quickly must documentation be provided?
In Slovakia you submit documentation on request from the tax administrator within 15 days of delivery. In the Czech Republic there is no fixed submission deadline for documentation because keeping it is not compulsory, but you should be able to substantiate your prices whenever the tax authority asks. In both countries, preparing documentation in advance is strongly advisable.