From 1 June 2024, new rules for company classification for accounting purposes came into force in Slovakia. The thresholds for micro, small and large companies were significantly increased.
These changes may affect how your company keeps accounting records, prepares financial statements and fulfils additional reporting obligations.
Why Company Classification Matters for Business
The size category of a company affects several important obligations.
The company category determines:
- the scope and complexity of financial statements;
- audit requirements;
- additional reporting obligations;
- the amount of financial information that must be disclosed;
- administrative workload for accounting;
- the cost of accounting and audit services.
Correct company classification is not just a formality. It affects real business costs and the type of reports that must be prepared.
New Company Classification Thresholds from 2024
Act No. 105/2024 Coll. transposed European Directive (EU) 2023/2775 into Slovak legislation, increasing the thresholds for company classification.
The main criteria are:
- total assets — majetok;
- net turnover — čistý obrat;
- average number of employees.
| Category | Criterion | New thresholds from 2024 |
|---|---|---|
| Micro company | Total assets | up to €450,000 |
| Micro company | Net turnover | up to €900,000 |
| Small company | Total assets | from €450,000 to €5,000,000 |
| Small company | Net turnover | from €900,000 to €10,000,000 |
| Large company | Total assets | over €5,000,000 |
| Large company | Net turnover | over €10,000,000 |
How a Company Category Is Determined
A company is classified based on three indicators:
- Total assets — majetok
This is the book value of all company assets. - Net turnover — čistý obrat
This is revenue from the sale of goods and services. - Average number of employees
This is calculated for the reporting year.
Important: a company must meet at least two out of three criteria to fall into a specific category.
The classification is assessed based on the results of two consecutive accounting periods.
The Two-Year Rule: How Reclassification Works
A key principle of Slovak accounting legislation is that a company can change its category only after it exceeds or no longer meets the required criteria for two consecutive years.
This means that the category does not change automatically after just one year.
If a company becomes smaller or larger according to the indicators in one year, the second consecutive year must confirm the change.
Practical Example of Reclassification
Situation:
A company was classified as a large company from 1 January 2023 based on the criteria for 2021 and 2022.
From 1 June 2024, new increased thresholds came into force.
Question:
If, under the new thresholds, the company no longer meets the criteria for a large company for 2023, can it move to the small company category in 2024?
Answer:
No. The company remains a large company in 2024.
Reason:
- in 2022, the company met the old criteria for a large company;
- two consecutive years of not meeting the criteria are required to change the category;
- only if the company does not meet the criteria for a large company in both 2023 and 2024 can it be reclassified as a small or micro company from 1 January 2025.
Transitional Provisions for 2024
According to the transitional provision § 39zc of the Slovak Accounting Act, special assessment rules apply in 2024.
The following limits are used:
- for 2022 — the old thresholds that applied before the change;
- for 2023 — the new increased thresholds.
This means that companies that may or must be reclassified from 1 January 2024 assess:
- the old thresholds for 2022;
- the new thresholds for 2023.
What Each Category Means in Practice
Micro Company — Mikro účtovná jednotka
Criteria:
- assets: up to €450,000;
- turnover: up to €900,000;
- employees: usually up to 10 people.
Reporting requirements:
- simplified financial statements;
- less information disclosure;
- statutory audit is usually not required;
- simpler accounting rules.
For small s.r.o. companies and family businesses, this may mean less administrative work and simpler accounting.
Small Company — Malá účtovná jednotka
Criteria:
- assets: from €450,000 to €5,000,000;
- turnover: from €900,000 to €10,000,000;
- employees: usually up to 50 people.
Reporting requirements:
- standard financial statements;
- moderate level of information disclosure;
- audit is not mandatory, except in certain cases;
- standard accounting rules.
For most small and medium-sized companies in Slovakia, this is the main working category.
Large Company — Veľká účtovná jednotka
Criteria:
- assets: over €5,000,000;
- turnover: over €10,000,000;
- employees: usually more than 50 people.
Reporting requirements:
- full financial statements;
- maximum information disclosure;
- mandatory audit;
- additional reports, such as a management report;
- possible additional ESG reporting requirements.
For large companies, this means more complex reporting and higher accounting and audit costs.
How Increased Thresholds Affect Companies
For many companies, the increased thresholds are a positive change.
Possible benefits include:
- some companies may move to a lower category;
- reporting may become simpler;
- audit costs may decrease;
- administrative workload may be reduced;
- accounting processes may become less complex;
- management can spend less time on formalities and more time on business.
However, it is important to remember that moving to another category depends on the two-year rule and must be calculated correctly.
What Your Company Should Do
To understand how the new thresholds affect your business, several steps are recommended.
Recommended actions:
- Assess your current company category
Check which category your company belongs to now. - Calculate the indicators
Determine total assets and net turnover for the last two years. - Compare the indicators with the new thresholds
Check whether the company may move to another category. - Apply the two-year rule
Reclassification is possible only after two consecutive years. - Consult an accountant
A professional can help calculate the indicators correctly and apply transitional rules. - Plan ahead
If reclassification is possible in 2025, it is better to prepare in advance.
How Classification Affects Different Areas of Business
Impact on Audit
If a company moves from the large company category to the small company category due to the new thresholds, this may affect audit obligations.
Possible consequences:
- the statutory audit obligation may end;
- audit service costs may be reduced;
- formal requirements may decrease;
- annual reporting may become simpler.
However, audit obligations should always be checked individually, because there are exceptions and additional criteria.
Impact on Financial Information Disclosure
Smaller companies may disclose less information in their financial statements.
This may mean:
- simpler notes to the financial statements;
- less mandatory public information;
- greater confidentiality of financial data;
- less time spent preparing reports.
For business owners, this is an important advantage, especially if the company does not want to disclose more information than legally required.
Impact on Accounting
Micro and small companies may use simpler forms and procedures.
This may include:
- simplified financial statement forms;
- less complex accounting procedures;
- simpler asset valuation rules;
- fewer internal accounting processes.
As a result, accounting can become cheaper, simpler and faster.
Action Calendar for Companies
End of 2024
Recommended actions:
- close the financial year;
- calculate total assets;
- calculate net turnover;
- check the average number of employees;
- assess whether the company meets the new criteria.
Beginning of 2025
Recommended actions:
- check whether reclassification is possible based on 2023–2024 data;
- consult an accountant about the consequences;
- understand whether reporting requirements will change;
- decide whether a new category can be applied.
During 2025
Recommended actions:
- adapt accounting procedures to the new category;
- update internal rules and processes;
- prepare financial statements in the correct format;
- inform relevant stakeholders about possible changes.
Professional Help With Company Classification
Correct company classification is not only about legal compliance. It is also an opportunity to optimise accounting, reporting and audit costs.
Incorrect classification may lead to:
- fines from the tax authority;
- the need to prepare financial statements again;
- additional costs for correcting mistakes;
- problems during inspections;
- incorrect application of audit requirements.
How BUH.SK Can Help
The accountants at BUH.SK can help you:
- determine the correct category of your company;
- calculate assets, turnover and average number of employees;
- assess the possibility of reclassification;
- apply the two-year rule;
- prepare financial statements according to the correct category;
- optimise accounting processes;
- check audit requirements.
We help Ukrainian entrepreneurs in Slovakia run their businesses correctly, understand local rules and avoid unnecessary costs.
Conclusion
The increase in thresholds for the classification of accounting entities in 2024 is a positive change for many companies in Slovakia.
It may reduce administrative workload, simplify reporting and lower accounting and audit costs.
Key points to remember:
- the new thresholds apply from 1 June 2024;
- the threshold for micro companies increased to €450,000 in assets and €900,000 in turnover;
- the threshold for small companies increased to €5,000,000 in assets and €10,000,000 in turnover;
- a category change is possible only after two consecutive years;
- special transitional rules apply in 2024;
- correct classification is important for reporting, audit and cost optimisation.
Recommendation: do not postpone assessing the impact of the new thresholds on your company. Consult a professional accountant to understand whether you can use the new rules to simplify accounting and reduce costs.
