Distilled
A Slovak company lent to group companies at 0.6 per cent against its own 0.5 per cent funding cost. The authority replaced that with central bank average rates — taken from the year the framework agreements were signed, three years before the money moved. The Supreme Administrative Court quashed the assessment on that point alone: a loan is a real contract, and the rate is tested at drawdown. Everything else about the adjustment survived.
The facts
The company had five framework loan agreements with group companies during 2017 — lender in three, borrower in two — funding its outbound lending by borrowing from another group company. It charged 0.6 per cent against its own funding cost of 0.5 per cent, a spread of ten basis points justified by reference to that cost, re-fixed annually. The only method named in the judgment is the comparable uncontrolled price method.
The frameworks, signed in 2013 and 2014, ran indefinitely, specified interest only as following the current price of money on the market, and set no maturity, no instalment schedule, no security and no sanctions. No individual implementing contracts were ever produced — only interest schedules for 2017. The drawdowns ran through 2017 and were not all repaid by the year end.
The authority replaced the 0.6 per cent with National Bank of Slovakia average rates for euro loans of over five years' maturity, taken from 2013 and 2014 — the years the frameworks were signed — on the footing that the relationship was founded then. That instruction came from the Ministry of Finance, reviewing an earlier assessment which had used 2017 rates and produced a smaller adjustment.
The decision
The cassation appeal was partly well-founded. The Court varied the judgment below, quashed the Financial Directorate's decision, remitted, and awarded the taxpayer full costs of both instances. On remand the 2017 tax falls to be redetermined using 2017 central bank rates.
The reasoning is short. A loan of this kind is a real contract: agreement alone does not create it, and the legal act becomes perfect only when the funds leave the lender's account. The relationship was founded not in 2013 or 2014 but on each drawdown in 2017, and the arm's length rate falls to be tested by reference to that period. The Ministry's binding instruction was, in the Court's words, incorrect and unsupported by anything relevant.
ajiho commentary
The holding travels further than the case
On their content, the Court said, the 2013 and 2014 documents were rather agreements to conclude future agreements — undertakings to advance funds as needed. That characterisation is the transportable part. Any group running a revolving facility, a master agreement or a cash pool drawn repeatedly should note it: the framework may not be the controlled transaction at all, and pricing evidence anchored to the year it was signed may be anchored to nothing.
And the Court refused to punish thin paperwork
The taxpayer had produced no drawdown contracts, only schedules. The Court held expressly that entering into framework agreements, and the absence of written terms for individual loans, cannot be held against the taxpayer when determining the relevant period: their generality reflected operative financing, with variable rates and volumes. A real limit on the line that a thin file forfeits the argument — but note the scope: it goes to when the rate is tested, not to whether it was right.
This is not a taxpayer win
Everything else survived. Ten basis points did not reflect the risk: the borrowers showed negative results and rising insolvency risk, and the lender had no free funds. The taxpayer also lost on tenor, on the terminology of its documentation, on its capital fund argument, on the sufficiency of its evidence, and on the tax office decision, which stands unquashed. Most consequentially the over-five-year maturity bucket survived, decoupled from the 2013 and 2014 signing dates that had been the authority's justification for it. The remand applies 2017 averages for loans of over five years, not a rate the taxpayer chose.
The holding that will be cited against taxpayers
Central bank sectoral averages remained a legitimate comparable where no terms had been evidenced, reliably reflecting the price of money at the relevant time — the standard the taxpayer's own agreements invoked. One could polemicise, the Court allowed, about whether a search for genuine independent transactions would have been better; but the taxpayer had produced no comparable at 0.6 per cent and so had not displaced it. A published statistical average is an endorsed fallback where the file is thin — the commercially consequential holding here, and not one that helps taxpayers.
A quiet oddity worth noticing
The original assessment, on 2017 rates, was EUR 68,357. The Ministry's review substituted 2013 and 2014 rates and the figure rose to EUR 77,538.90. Note who made the point: the Court supplied the harm analysis itself, using the increase to establish that the wrong reference year caused actual detriment. The remand does not cancel the adjustment — it restores the EUR 68,357 basis. A review meant to correct an assessment made it worse; correcting the correction brings it back to roughly where it started.
The first-instance decision is covered separately in this library and should now be read as superseded on the reference-period point. ajiho will continue to monitor Slovak decisions on intra-group financing.
Case reference
EURO AGRI, s.r.o. v Finančné riaditeľstvo Slovenskej republiky, Najvyšší správny súd Slovenskej republiky, 2Sfk/45/2025, ECLI:SK:NSSSR:2026:0823100183.1, decided and pronounced 30 April 2026, unanimously. On appeal from Správny súd v Banskej Bystrici, 1Sf/2/2023-154, 10 July 2025. Presiding: JUDr. Marián Trenčan, with JUDr. Elena Berthotyová and prof. JUDr. Juraj Vačok. Corporate income tax 2017. Primary source: official judgment.
The specific central bank rates applied, the drawdown dates and amounts, and the taxpayer's sector do not appear in this judgment and must be cited to the first-instance decision rather than to the cassation. Only the Financial Directorate's decision was quashed; the tax office decision of 16 December 2022 formally stands. The Court described the appeal as partly well-founded but awarded full costs as though the taxpayer had wholly succeeded. There is also a tension in the reasoning: the loans are found operative in character yet remain benchmarked against credit of over five years' maturity, the Court removing the authority's stated justification for that bucket while keeping the conclusion.
This note supersedes the first-instance decision covered separately in this library: EURO AGRI s.r.o. — Administrative Court Banská Bystrica, 10 July 2025 →