Mazars in SLOVENIA

Corporate taxes and other direct taxes

The general corporate income tax rate is 19% from 2017 on. A special rate of 0% applies to investment funds, pension funds and insurance undertakings for pension plans, under certain conditions. The tax base is the pre-tax (accounting) profit modified by several increasing and decreasing items. A company may request to be subject to tonnage tax instead of corporate tax if it meets certain conditions (i.e. it operates in international maritime shipping) and notifies the tax authorities in advance. The tax base for tonnage tax is the sum of the tax bases for each of an entity’s ships that are included in the tonnage tax regime. In addition, taxpayers whose revenue in the previous year did not exceed EUR 50,000 (or EUR 100 000 if employing at least one full-time person for a minimum of five months) can elect to take a lump sum deduction equivalent to 80% of annual revenue, in lieu of actual expenses. Losses can be carried forward without limitations and can be used only up to 50% of the tax base. In addition special rules apply in case of M&A transactions. Slovenia uses thin capitalization (4:1), but thin capitalization does not apply if shareholders are financial institutions and if the taxpayer provides evidence that they could have received the loan surplus from a lender that is a non-associated enterprise. There is a range of tax allowances for new investments and R&D, new employments and employments of disabled persons, as well as investment incentives. Provisions governing general anti-avoidance rule and CFC as a part of European Union Anti-Tax Avoidance Directive (ATAD I) are applicable in Slovenia from 2019.

A withholding tax of 15% is applied on dividend, interest, royalty and rental income paid for by a Slovenian company to a foreign company. However, if conditions are met, an exemption is applicable to payments to EU residents (under parent subsidiary directive & interest and royalty directive) and under international double taxation treaties (currently over 50 treaties).

Real estate transfer tax (RETT) is applied on the transfer of immovable property at the rate of 2%. The tax base is the selling price of the transferred property and the taxable person is the seller. No tax if transaction is subject to VAT.

Transfer pricing in Slovenia
Arm’s lenght principle since 2005
Documentation liability since 2006
APA Available
Penalty
Lack of documentation ~ up to EUR 30.000/ missing documents
Tax shortage up to 45% of the unpaid tax, but no more than EUR 300.000; EUR 5.000 for the responsible person
Related parties 25% < direct or indirect control or common managing director
Safe harbours For interest rates in line with Governmental Rulebook, for thin cap 1 : 4 ratio

Level of attention paid by Tax Authority:

8/10

VAT and other indirect taxes

The general tax rate is 22%; a reduced rate of 9.5% applies to some goods, e.g. food, books, water supply, carriage of passengers and their personal luggage, etc. VAT-exempt services are services of public interest, as well as banking services, insurance, investment-related services, gambling, certain services provided by medical doctors and dentists, etc. EC Sales lists (IC report) are obligatory in Slovenia and should be submitted by the 20th day of the month following the taxable period. For cross-border sales to consumer threshold of EUR 10,000 is applied in Slovenia. Electronically supplied services to consumers worth less than EUR 10,000 are subject to Slovenian VAT rules. From 2019 Slovenia incorporated the requirements of the EU Vouchers Directive (Directive 2016/1065) into domestic law.

Other indirect tax types in Slovenia are excise duty, insurance tax, motor vehicle tax, customs, etc.

VAT Options in Slovenia Applicable / limits
Distance selling EUR 35,000/year
Call-off stock
VAT group registration
Cash accounting EUR 400,000/year
Import VAT deferment
Local reverse charge construction works and supply of staff in relation to construction works, supply of immovable property (limited), supply of waste and used material based on specification, transfer of greenhouse gas emission allowances
Option for taxation
- letting of real estate
- supply of used real estate
VAT registration threshold EUR 50,000/year *

* special rules for agricultural activites

Personal income tax / Social security system

Personal income tax rates are progressive from 16% to 50%, and apply on active income sources (employment, business income, agriculture and forestry, other income. Income from capital and rental income is taxed at flat rate (dividends at 25%, interest at 25%, capital gains from 0% to 25%, depending on holding period, rental income at 25% (10 % lump sum costs or actual costs deductible)). Social security contributions apply on income from employment and are 16.10% for the employer and 22.10% for the employee. Self-employed individuals (business income) pay their own social security contributions depending on the circumstances of the case. The examples below show the cost of the employer and the employee in case of minimum wage level and the average wage in the private sector. There are a number of personal allowances that apply individually depending on the personal status of the individual.

Wage-related taxes in Slovenia Minimum wage Average wage in private sector
  in EUR   in EUR  
Total wage cost 978 116,10% 2 105 116,10%
Employees' contribution 136 16,10% 292 16,10%
Gross Salary 843 100,00% 1 813 100,00%
Employees' contributions 186 22,10% 401 22,10%
Tax and surtax* 61 7,24% 233 12,88%
Net Salary 596 70,66% 1 179 65,02%

*Tax base differs from the gross salary, deductions apply.

Slovenia
Verovškova ulica 55A, 1000 Ljubljana
Slovenia
Kristijan Cinotti
Partner – Advisory services