Slovene TAX Card
5 July 2017 - 5 July 2019, 10:4AM - 00:00AM, CET Ljubljana, Slovenia
CORPORATE INCOME TAX (CIT)
A tax resident is a legal entity which has its head office or place ofeffective management on the territory of Slovenia. Resident legalentities in Slovenia are liable to pay tax on their worldwide incomewhile non-resident entities are taxed only on the income sourcedin Slovenia.The tax year is a business year (12 months) which is typically thecalendar year but may differ from the calendar year. In the lattercase the taxpayer must notify the Tax Authority about its decisionand may not change the tax period for three years.Taxable income is established on the basis of accounting profitdisclosed in the annual income statement, which is further adjustedin the tax return. CIT liability in the CIT return is self-assessed.In 2017 the CIT rate amounts to 19%.The CIT legislation provides 100% tax relief for investments inresearch and development and 40% tax relief for investments incertain equipment and intangible assets. The tax reliefs may notexceed the CIT base. It is not possible to use both reliefs for thesame investment. In case the investment is financed by grantsprovided by Republic of Slovenia or the EU, the relief cannot applyto this part of investment.Tax losses can be carried forward for an unlimited period of time. Theaccumulated tax losses may be utilized up to the 50% of the currentpositive CIT base. Utilization of accumulated tax losses is undercertain circumstances limited when the direct or indirect ownershipof share capital of the taxpayer changes for more than 50%.Capital gains are included in the tax base and are subject to CIT.However, under certain conditions (taxpayer holds at least 8% of theshare capital for the minimum period of 6 months and employs oneemployee on a full time basis) 47.5% of capital gain may be exemptfrom taxation. 50% of capital losses should be considered as nondeductibleexpenses if before mentioned conditions apply.
With holding tax at the rate of 15% shall be paid on dividends,interest, royalties, lease payments for immovable property situatedin Slovenia, payments made for services provided by performingartists or sportsmen (if related payments belong to anotherperson), payments for some services provided by persons fromthe ”black list” countries. Withholding tax may be reduced byParent-Subsidiary Directive (for dividends), Interest-RoyaltiesDirective and double tax treaties.As at 1st January 2017, Slovenia has 58 effective double tax treatieson income and capital. There are 2 double tax treaties which areratified, but not yet in force.
VALUE ADDED TAX (VAT)
Each Slovene tax payer whose turnover in the previous 12 monthsexceeds, or is likely to exceed in the following 12 months EUR50,000 (applicable from 1 April 2013, before the threshold wasEUR 25,000), is obliged to register for VAT.Foreign tax payers are obliged to register before startingperforming taxable activities subject to VAT in Slovenia. Theretroactive VAT registration is not possible in Slovenia.It is not possible for group companies to register as a single VATentity (no tax grouping).The standard VAT rate is 22% (applicable from 1 July 2013, beforeit was 20%). The reduced rate is set at 9.5% (applicable from1 July 2013, before it was 8.5%) and applies only to goods andservices specifically determined in the VAT Act.Exemptions of VAT apply for the Intra-Community supply of goods,export of goods, transportation and other services in direct relationto the export of goods, supply of goods to the free zone, free andcustoms warehouses, deliveries of goods within a free zone, freeand customs warehouses, etc.Tax exemption without credit is provided for the following supplies:banking, financial, insurance and reinsurance services, services ofpublic interest (health and social security services, sport, culture,education and religious services), supply of immovable property,(except the transfer of new ones), services of games of chance, etc.The tax period is a calendar month.The VAT return should be filed by the last business day of themonth following the tax period. Nevertheless, a taxable personwho is obliged to file the EC sales is required to submit the VATreturn monthly by the 20th day of the month following the taxperiod. The VAT liability should be paid by the last business day ofthe month following the tax period.
The entering threshold in Slovenia is set at EUR 200,000 fordispatches and EUR 120,000 for arrivals.Reporting period is a calendar month. Intrastat reports should befiled until the last working day before 15th of the month for theprevious month.
PERSONAL INCOME TAX (PIT)
Personal Income Tax applies to individual’s income. There are sixcategories of income: income from employment, business income,income from basic agriculture and forestry, rental income androyalties, income from capital (interest, dividends and capital gains)and other income. Slovene tax residents are subject to PersonalIncome Tax on their worldwide income. Non-residents are subjectto Personal Income Tax on their income from Slovene sourcesunder the same rules as residents.Personal Income Tax is levied at progressive tax rates:
|Annual taxable basis (€)||Tax|
|Up to 8,021.34||16 %|
|From 8,021.34 to 20,400.00||1,283.41 + 27 % over 8,021.34|
|From 20,400.00 to 48,000.00||4,625,65 + 34 % over 20,400.00|
|From 48,000.00 to 70,907.20||14,009.65 + 39 % over 48,000.00|
|Above 70,907.20||22,943,46 + 50 % over 70,907.20|
During the year income tax advances are payable either aswithholding made by employers, i.e. payers of income or on the basisof tax returns and tax assessments issued by the tax authorities.After the year-end, all income is aggregated and the tax isassessed by the tax authorities. Income tax advances paid duringthe year are offset against the final tax liability. When advancepayments exceed the annual tax liability, a refund is provided.
PIT rates on dividends, interest and capital gains:- dividends: 25%;- interest: 25% (interest for bank deposits in Slovenia or EU –exempt up to EUR 1,000);- capital gains: 25-0% - dropping with the holding period (25% forthe first 5 years of holding period; 15% for holding period 5 to10 years, 10% for holding period 10 to 15 years, 5% for holdingperiod 15 to 20 years, 0% after 20-years holding period).
MANDATORY SOCIAL SECURITY CONTRIBUTIONS
Social security contributions are imposed to cover pension, healthand unemployment insurance and maternity leave. The basisof employees’ and employers’ contributions is employees’ totalgross salary (including fringe benefits and other income fromemployment).Employer’s rate is 16.1% and employee’s 22.1%. There is noceiling. Mandatory social security contributions are deductible forpersonal income tax purposes.
Slovenia joined the European Union on 1 May 2004. All EUcustoms legislation such as Customs Code and Implementingprovisions are directly applicable in all EU Member States, also inSlovenia.The customs duties base for goods imported from non-EUcountries is the “transaction value” of goods imported to EU.Transaction value is the price paid or the price to be paid for goodsimported to the EU, as well as other costs (which are not includedin the price to be paid to the seller) incurred in respect of thepurchase and import of goods.Payment of customs liabilities (customs duties, import VAT andother duties paid upon the import) charged on imported goods isto be made within 10 days after goods are put into free circulation.This deadline for payment may be postponed up to 30 days, if thecustoms debt is secured. From 1 July 2016 onwards, taxpayerscould pay the import VAT also via its monthly VAT return, if theprescribed conditions are met. The responsible body for customsduties and import VAT is the Slovene Financial Authority.
TAX ON TRANSFER OF REAL ESTATE (RETT)
The transfer of real estate property or establishing and transferringthe right of superficies are subject to tax. If VAT is charged on thetransaction, the tax on transfer of real estate is not imposed (e.g.supply of construction land, new immovable property buildings andland by first use or within 2 years time of use, etc.).The taxable person obliged to pay the RETT is the seller of the realproperty, unless otherwise agreed.The tax is payable at a rate of 2% of the tax base. The tax base isthe selling price of the real property.
ELECTRONIC FILING OF TAX RETURNS
In Slovenia almost all tax returns should be filed electronically viathe e-taxes system of the Slovene Financial Authority (e.g. CIT, VATreturns, returns connected to salary calculation, etc.).