Obligations in the field of personal data protection

On 1 July 2013 the new Act on the Protection of Personal Data No. 122/2013 Coll. entered into force, the transitional provisions of which imposes several obligations on operators of information systems, who process personal data such as:
- about their employees (IS human resources and payroll),
- about their customers (e-shop),
- about their potential customers (e.g. loyalty cards, consumer competitions and games, etc.),
- website users (e.g. discussion forums, community sites, etc.).
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The amendment to the Copyright Act in force from 1 November 2013

The amendment to the Copyright Act in force from 1 November 2013 contains these major changes:

1. Newspapers will be subject to copyright as a collected work. The author of a collected work has the right to authorize any use of the work, including obtaining copies of the collected work or part of it. This change was enacted to protect newspaper publishers from entities that are taking and processing articles for free from these newspapers for press monitoring, which are then sold commercially to their customers.
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New Data Protection Act Effective from 1 July 2013

On 1 July 2013, a new Data Protection Act will come into effect. Here are the dates for entrepreneurs to watch:

a) by 1 January 2014 – obligation to register at the Office for Personal Data Protection of the Slovak Republic information systems which process personal data, if you don’t have an authorized responsible person (that is if you process personal data using less than 20 entitled persons),

b) by 1 January 2014 – obligation to list in conformance with the new law, all information systems in which you process personal data,

c) by 1 January 2014 – obligation to advise the entitled person and make a written record of this in conformance with the new law

d) by 1 April 2014 – obligation to make compliant security directives adopted or project with the provisions of the new law,

e) by 1 July 2014 – obligation to name an authorized responsible person, if you process personal data using 20 or more entitled persons.

Please contact us if you are interested in finding out more about this issue. We would be pleased to offer you legal services in this area.


Payment of contributions into LLC’s registered capital to the bank

An amendment to the Commercial Code is being prepared, which will enter into effect from 1 October 2013. As part of the battle against tax evasion the government wants to introduce the obligation on founders of an s.r.o. (limited liability) company to pay the deposited contributions of the registered capital or part of them into a special account in a bank or local branch of a foreign bank. The bank will issue a certificate about the deposit or a statement of account, which will be a mandatory annex to the application for registering an s.r.o. (limited liability) company in the companies register.

At the moment, paying the contribution is merely a formality, as the application for registration is accompanied by a declaration from the company’s administrator of contributions that the founders have paid their deposits or part thereof, yet companies only record these contributions “on paper” as an accounting item in the treasury, but there is no payment made in reality.

Please contact us if you are interested in finding out more about this issue. We would be pleased to offer you legal services in this area.


Changes in the Commercial Code after 1 February 2013

On 1 February 2013 major changes in the Commercial Code entered into force:

1. Creating a likelihood of confusion – the entrepreneur may not choose a business name that could cause danger of recipients of his documents confusing his business with a public register or other register kept by law.
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The calculation of the statutory interest will change

The Slovak government has passed two new regulations about the calculation of the statutory interest. At the moment, there is no distinction between the amount of interest in civil and commercial law relations. The amount of interest is calculated according to Government Regulation no. 87/1995 Coll. implementing Certain Provisions of the Civil Code, as amended, under which the statutory interest rate is 8 percentage points above the base rate of the European Central Bank in force on the first day of arrears in paying the monetary debt. The interest rate can change each calendar half-year, based on the movement of the European Central Bank (“ECB”) base interest rate, and subject to certain conditions.

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General meeting in LLC with notarial assistance

An amendment to the Commercial Code, effective as of 1 February 2013 introduces the obligation to certify the authenticity of the signature of the chairman on the minutes of a general meeting and also the signature of the sole member on the decisions of the sole member, for the most common decisions relating to limited liability (s.r.o.) companies (change of director, appointment of proxy, change in the amount of capital, dissolution of the company, changing its legal form, sale of the business, and so on). Transitional provisions establish the rule that the authentication of the signature is not required if two conditions are simultaneously fulfilled. (i) the General Assembly (or decision of the sole member) takes place before 1 February 2013 and (ii) the application for registration of changes in the commercial register based on this decision is made before 1 April 2013.

Please contact us if you are interested in finding out more about this issue. We would be pleased to offer you legal services in this area.


Verification of financial statements by an auditor

A draft of law amending and supplementing the Act No. 431/2002 Coll. on Accounting as amended has been submitted to the Slovak parliament. The proposed law shall come into force from 1 March 2013.

The aim of the amendment is to reduce the number of entrepreneurs whose financial statements are subject to verification by an auditor. Currently, this requirement applies to both business companies (s.r.o. and a.s. companies) and cooperatives which at time of making the financial statement for the previous accounting period meet two of the following three conditions:
1. Total assets exceed one million euros. Here, the amendment proposes an increase to 4.4 million euros.
2. Net sales exceed two million euros. Here, the amendment proposes an increase to 8.8 million euros.
3. The average number of employees during the accounting period exceeds 30. The amendment proposes an increase to 50 employees.

Please contact us if you are interested in finding out more about this issue. We would be pleased to offer you legal services in this area.


Promotional competitions will be subject to strict legislation

The Slovak parliament has received a draft of bill amending and supplementing the Act No. 171/2005 Coll. on Gambling. The bill is proposed to take effect from 1 January 2013.

One of the major changes of this amendment is the introduction of promotional competitions as a new kind of gambling game, in which participation does not require payment of money, but the purchase of certain goods, services or other performance and demonstrating such a purchase to the competition organizer or any contractual arrangement with the provider of prizes or participation in promotional or advertising events. Promotional competitions are games of chance in which the operator undertakes to pay or provide the winning player designated at random.

A person who wants to run a promotional competition, will be required to notify this intention to the appropriate tax authority and get a “general licence”. The condition for obtaining it will be to write out the Game Rules, the General Conditions of the draw, depositing a financial guarantee and the payment of a levy on winnings.

If this amendment is approved, it will mean significant difficulties in organizing consumer contests, games and similar activities that are currently treated very freely and whose organization does not require any permission, notice or license.

Please contact us if you are interested in finding out more about this issue. We would be pleased to offer you legal services in this area.


Transfer of tax liability on non-cash prizes

A bill has been submitted to the Parliament of the Slovak Republic to amend the Act on Income Tax to move the tax obligation for non-cash prizes from the winner to the operator or organizer of the game, competition or draw. The proposed amendment introduces a legal regime under which withholding tax will also be applied to non-cash winnings and prizes, directly by operator or organizer of the game, competition or draw. Under the new legislation the winner will be free of tax and health insurance obligations arising from the non-cash prize.

Currently, non-cash prizes or winnings of a value exceeding EUR 165,97 are taxable in full with the tax applied by the taxed person (the winner) through personal tax returns. In awarding non-cash winnings or prizes the operator or organizer of the game, competition or draw is obliged to inform the winner of the value of the prize, which is the purchase price or the own costs of the operator of the game, competition or draw. Apart from the tax, the winner is obliged to pay 14 % health insurance contribution.

The amendment is proposed to come into effect from 1 March 2013.

Please contact us if you are interested in finding out more about this issue. We would be pleased to offer you legal services in this area.