Legal journal: Legislative Compass - February 2024

You may be significantly affected by changes in legislation. At SEMANČÍN & PARTNERS we monitor all changes for you so that you can focus on your business. In Legislative Compass, we bring you an overview of the most important legal news.

1. New legislation on conversions of companies and cooperatives
2. New methodology for calculating child support
3. Suspension of the effectiveness of certain changes in criminal law by the Constitutional Court of the Slovak Republic
4. The EU has updated the list of non-cooperative tax jurisdictions

New methodology for calculating maintenance

The Ministry of Justice of the Slovak Republic unifies the procedure for determining maintenance of parents to children through a new methodology for calculating maintenance of parents to children, which is valid from 2024 and has a recommendatory character.

The methodology was developed by a working group composed of experts from the Ministry of Justice, judges, members of the academic community, representatives of the Prosecutor General's Office. The working group prepared a methodology with the aim of contributing to the unified application practice of courts and establishing the basic baselines and method of calculating child maintenance, so-called tabular maintenance. This methodology is intended to contribute to fair parental agreements regarding maintenance.

The methodology, within the framework of the applicable legislation, regulates in detail the procedure of courts when deciding on the maintenance obligation of parents towards children, including those of age. The table for calculating maintenance in accordance with Article 49 of the methodology was created on the basis of a comparison of decisions of regional courts in the recent period, reflecting also the methodologies of Central European countries that have been working with tables for calculating maintenance for decades (Czech Republic, Germany, Austria).

Procedure for using the table

In order to determine the correct amount of maintenance obligations, it is necessary to use the table as follows: in that order:

1. determination of the obligated parent's net income;
2. assignment of the child's life stage,
3. taking into account the number of maintenance obligations of the parent;
4. Taking into account the degree of child care and access.

EXAMPLE 1 Children aged 6 and 12 are entrusted to the sole care of the mother. The father, as an obligated parent, has a net income of € 1400 as an employee. Intercourse is regulated as follows: 2 weekends a month children spend with their father. Calculation of alimony: The amount of maintenance according to the table:

• child 6 years – 14% of 1400 € = 196 €
• child 12 years – 16% of 1400 € = 224 € Control: maintenance for both children should be 30% of the liable parent's net salary; i.e. 420 € (196+224=420 €). Contact is set up closely, it does not affect the amount of maintenance obligations. The father's income allows the amount of alimony to be determined according to the table.

EXAMPLE 2 Children aged 7, 10 and 15 are entrusted to the sole care of the mother, who has a net monthly income of € 700. The father is a partner and managing director in several business companies, he did not prove the amount of income in the proceedings. Therefore, when determining income, the court followed the provisions of Section 63(4) ZR (the subsistence minimum for one adult from 01.07.2023 represents €178.92) and set the obligated parent's income at €3,578.40. The justified needs of a child aged 7 years are calculated at € 350 per month, for a child of 10 years at € 400 per month and for a child aged 15 at € 450 per month. Calculation of alimony: The amount of maintenance according to the table:

• child 7 years – 11% of € 3,578.40 = € 393.60
• child 10 years – 13% of € 3,578.40 = € 465.20
• child 15 years – 15% of € 3,578.40 = € 536.80 The income of the obligated parent allows the amount of maintenance to be determined according to the table. If the obligated parent's abilities and assets allow it, it is at the discretion of the court, based on the specific facts of the case, to evaluate the creation of savings as justified needs. The maintenance allowance may then consist of ordinary maintenance to cover proven justified needs and savings.

The methodology in its entirety can be found on the website of the Ministry

The Constitutional Court suspended the effectiveness of some changes in criminal law

In the last week of February, the Constitutional Court of the Slovak Republic ("Constitutional Court") suspended the effectiveness of several provisions of the law, which was approved by Parliament in an expedited legislative procedure on February 8, 2024, and which amended several legislation, including the Criminal Code and the Code of Criminal Procedure.

The Constitutional Court suspended the effectiveness of the law in the entire part in which the Criminal Code was amended, on the basis of which, for example, the amounts of damages, the length of limitation periods, as well as several penalty rates in a special part of the Criminal Code were to be changed. The Constitutional Court has also suspended the effectiveness of all changes affecting the Act on Criminal Liability of Legal Persons.

In the Code of Criminal Procedure, the court only suspended the effectiveness of a novelty that would have allowed for a retrospective review of already finally approved plea agreements. In addition, after 15 March, the provision that evidence obtained by coercion or the promise of an unlawful benefit to a cooperating person could only be used against the person who caused the coercion or for the benefit of the accused will not apply for the time being.

The motions to suspend other parts of the law were not granted by the Central Office of the Slovak Republic. This includes, for example, the dissolution of the Office of the Special Prosecution, which ceases operations on March 20, 2024. The special prosecutors will go to the attorney general's office and their cases will be divided into county prosecutors' offices.

The effects of the decision will not occur automatically, but only at the moment of its publication in the collection of laws, which is in charge of the Ministry of Justice of the Slovak Republic and which is obliged to do so by March 14, 2024. The effectiveness of the provisions shall be suspended until such time as the merits of the case have been decided.

EU updates list of non-cooperative tax jurisdictions

On 20 February 2024 in Brussels, EU Member States decided to remove the Bahamas, Belize, Seychelles and the Turks and Caicos Islands from the list of non-cooperative tax jurisdictions.

Following this update, the list consists of the following 12 jurisdictions: American Samoa, U.S. Virgin Islands, Anguilla, Antigua and Barbuda, Fiji, Guam, Palau, Panama, Russia, Samoa, Trinidad and Tobago, and Vanuatu.

The list of non-cooperative jurisdictions for tax purposes is part of the EU's work to fight tax evasion and avoidance. It consists of countries that have not fulfilled their commitments to meet the tax good governance criteria within a certain timeframe and also countries that have refused to do so.

The aim of this list is not to name and shame countries, but to promote positive change in their tax legislation and practice through cooperation.

The list is updated twice a year, usually in February and October.

New transformations of business companies

As of 1 March 2024, the new Act on the Conversion of Companies and Cooperatives and on Amendments to Certain Acts (hereinafter referred to as "the Act") is in force. What new it will bring us, we discuss in more detail in this article.

By adopting the new law, the legislator obtained the exemption from the [Commercial Code] of the legislation on conversion, cross-border conversion and changes in the legal form of companies and cooperatives(https://www.slov-lex.sk/pravne-predpisy/SK/ZZ/1991/513/). The aim of the exclusion of legal regulation is to draw up uniform, coherent and transparent legislation by merger, merger, division, change of legal form and also its cross-border alternatives, which replaces the currently rather complex and fragmented arrangement of existing legislation.

The Act is extended to transpose Directive (EU) 2019/2121, which extends the legislation to new procedures for cross-border mobility of companies, with a view to promoting it more, and in order to provide adequate and stronger protection for shareholders' or shareholders, creditors of companies and employees.

New regulation defines new terms

Transformations and cross-border transformations represent fundamental changes in a company where its capital is transformed, new companies are created and old companies are dissolved, which also has a significant impact on its shareholders, who cease to be partners in the original companies and are related to new companies, while the creditors of the original companies change the subject of the liability. That is why the term conversion was chosen as a new designation for these types of changes in business companies.

According to the Act, conversion means mergers and divisions of companies.

Cross-border conversion means cross-border mergers and cross-border divisions.

Changes in legal form include change of legal form and cross-border change of legal form.

New institutes

Among other things, the law introduces new institutes such as secession, cross-border division or cross-border change of legal form. Below we will explain the established institutes.

Spin-off means a procedure corresponding to a partial division of a company, where the company being divided does not cease to exist and part of it is spun off into another company. The aim of the national division is to give companies an additional opportunity to organise their business.

The law introduces the institution of cross-border division. This institute is intended to promote the cross-border mobility of companies in the European Union. A cross-border division is a division of a company where the successor company is a newly established company, at the same time at least one participating or successor company is registered in a commercial or similar register in another EU Member State.

The latest new institute is the cross-border change of legal form. This required institute, like the cross-border division institute, is flipped out of Directive (EU) 2019/2121. A cross-border change of legal form is understood as when a company changes its registered office from one Member State to another, and at the same time its legal form changes in accordance with the law of the State following a change of legal form.

In addition to new concepts and institutes, the new law also determines the cases when national and cross-border conversion is permissible and when, on the contrary, it is not.

Since the new legislation is quite extensive and complex, it certainly deserves our deeper attention. Therefore, in the next parts of our Legal Journal, we have prepared for you a more detailed analysis of the new law and we will go through separately the domestic transformation of the company and the separately cross-border conversion of the company.

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