Tax returns and compliance
Termination of residence
Economic employer approach
Types of taxable compensation
Salary earned from working abroad
Taxation of investment income and capital gains
Additional capital gains tax (CGT) issues and exceptions
General deductions from income
Tax reimbursement methods
Calculation of estimates/prepayments/withholding
Relief for foreign taxes
General tax credits
Sample tax calculation
Income tax information based on Slovenian Personal Income Tax Act (Official Gazette of the Republic of Slovenia, No. 117/06 with subsequent amendments and supplements).
When are tax returns due? That is, what is the tax return due date?
31 July. From 2008 on, the tax authorities are obliged to generate an annual tax assessment from their own information, to assess the tax and submit the assessment to the taxpayer. If the tax assessment has not been submitted to the taxpayer by 15 June of the current year, the taxpayer is obliged to file an annual income tax return for the previous year by the end of July of the current year. The tax liability of the taxpayer will be calculated by the tax authorities (the tax assessment shall be issued by 31 October of the same year).
What is the tax year-end?
The tax year is a calendar year.
What are the compliance requirements for tax returns in Slovenia?
Advance tax payments are usually made on a monthly basis, these are withheld by employers when the salary is paid. If a resident receives salary from a foreign entity, tax advances are paid on the basis of a tax return.The tax assessment is issued by the tax authorities in 15 days following the receipt of the tax return.
The annual tax declaration has to be filed by 31 July of the current year (if the preliminary tax assessment is not received by 15 June) for the previous year. The tax authorities have to issue a tax assessment by 31 October of the same year.
Non-residents are liable to income tax on income derived in Slovenia. Tax payments are made on the basis of the tax return filed with the tax authorities or the tax is withheld by the payer of income. The tax paid is considered as a final tax.
What are the current income tax rates for residents and non-residents in Slovenia?
Income tax table for 2015
|Taxable income bracket||Total tax on income below bracket||Tax rate on income in bracket|
|From EUR||To EUR||EUR||Percent|
The tax rates for residents and non-residents are the same.
For the purposes of taxation, how is an individual defined as a resident of Slovenia?
An individual is deemed to be a resident of Slovenia if his/her officially registered permanent address, habitual place or the center of his/her personal and economic interests is in Slovenia. In addition, any person who has been present in Slovenia in a tax year for more than 183 days in the aggregate is deemed to be a resident in that tax year.
Article 18 of the Act defines the following sources of income that are taken into account for the personal income tax return:
During the year tax is generally paid as advance payments for income mentioned above. These advance payments are taken into account when calculating the final tax obligation in the annual tax return (except of income from capital, rents and income from business activity, whereby the taxable basis is determined with standard costs).
Is there, a de minimus number of days rule when it comes to residency start and end date? For example, a taxpayer can’t come back to the host country for more than 10 days after their assignment is over and they repatriate.
Are there any tax compliance requirements when leaving Slovenia?
Personal income tax return has to be filed prior to departure from Slovenia if a person is obliged to file such tax return for the current year.
What if the assignee enters the country before their assignment begins?
Applicable in case of tax residence status if it is determined on the basis of presence in Slovenia (more than 183 days in a calendar year).
What if the assignee comes back for a trip after residency has terminated?
In principle, it has no tax implications.
Do the immigration authorities in Slovenia provide information to the local taxation authorities regarding when a person enters or leaves Slovenia?
Yes. In principle, data from civil register regarding temporary residence (address) registered in Slovenia are available to the tax authorities.
Will an assignee have a filing requirement in the host country after they leave the country and repatriate?
An assignee (resident) is obliged to file the annual tax return prior to departure from Slovenia. If the tax return is filed prior to departure, the assignee has no further obligations, unless he receives additional payment in the future related to his assignment in Slovenia i.e. payment related to his working days in Slovenia.
Do the taxation authorities in Slovenia adopt the economic employer approach to interpreting Article 15 of the OECD treaty? If no, are the taxation authorities in Slovenia considering the adoption of this interpretation of economic employer in the future?1
In principle, yes.
Are there a de minimus number of days before the local taxation authorities will apply the economic employer approach? If yes, what is the de minimus number of days?2
What categories are subject to income tax in general situations?
As a rule, it can be stated that all types of compensation and benefits-in-kind received by an employee for services rendered, constitute taxable income. These include, but are not limited to, the following:
Benefits in kind include any advantage provided by an employer or any other person (related party) to an employee or his/her family member. Minor privileges (not exceeding EUR 13 per month) are not considered as benefits in kind unless provided regularly.
In general, the taxable value of a benefit-in-kind is its comparable market price less any amount paid by the recipient. If the comparable price is not possible to determine, the cost price is used. There are specific rules perscribed for determination of the benefit for private usage of the company car.
Are there any areas of income that are exempt from taxation in Slovenia? If so, please provide a general definition of these areas.
Severance payments received by a taxpayer upon retirement or terminations on account of business reason or due to incapability as defined by the labor legislation are tax-exempt up to the limit/amount determined in the governmental decree or in the law.
Jubilee awards and solidarity help payments are also tax-exempt up to the limit/amount determined in the governmental decree.
Reimbursements of costs in connection with employment are tax-exempt if they are paid up to the certain amount, which is determined by the governmental decree. Such costs include among others:
Severance payment at retirement: EUR4,063.
Severance payment because of the cancellation of the employment contract due to business reasons or due to incapability: depends on the employee's average salary and years before termination, at most 10 average Slovenian monthly salaries, i.e. EUR 16,332.20 (average Slovenian monthly gross salary for November 2014: EUR 1,633.22).
Severance payment for termination of the fixed-term employment contract: at most 3 average Slovenian monthly salaries, i.e. EUR 4,899.66 (average Slovenian monthly gross salary for November 2014: EUR 1,633.22).
For business trips in Slovenia, the following daily allowances apply.
For business trips abroad (allowances are determined in a separate regulation for each country), the following daily allowances apply.
EUR334 per month.
Taxable income is income exceeding the above stated figures.
Are there any concessions made for expatriates in Slovenia?
Expatriates having income generated in Slovenia can deduct expenses incurred in generating that income as indicated in the section Tax Exempt Income.
Is salary earned from working abroad taxed in Slovenia? If so, how?
Foreign employment income the resident of Slovenia receives for working abroad is taxable in Slovenia.
According to the tax treaty, if the income is taxed abroad, tax can be credited in Slovenia or the income can be exempted.
Are investment income and capital gains taxed in Slovenia? If so, how?
Capital gains are taxable at the rate of 25 percent for natural persons (residents or non-residents).
Capital gains are taxable given the following conditions are fulfilled:
Capital gains are taxed at a 25 percent tax rate. The tax rate is reduced each five years of holding period (25 percent for the first 5 years of holding period; 15 percent for holding period 5 to 10 years, 10 percent for holding period 10 to 15 years, 5 percent for holding period 15 to 20 years, 0 percent after 20 years holding period) Consequently, any gains are exempt after a 20-year holding period.
Capital gains derived from the disposal of immovable property acquired before 1 January 2002 are not taxable. Gains on immovable property, which was used as a permanent home of the taxpayer for at least three years preceding the disposal are tax exempt.
The tax on capital gains is paid on the basis of the tax return filed with the tax authorities (by 28 February for the previous year) who issue the tax assessment. The tax paid is considered as final.
Dividends and other profit distributions are taxed at 25 percent final withholding tax.
Interest is taxed at a 25 percent rate withholding tax or by tax assessment. However, interest on bank deposits paid by a bank situated in Slovenia or another EU Member State is taxable only for the part that exceeds EUR1,000. The tax is considered as final tax.
As of 1 January 2013 rental income is taxed at a flat tax rate of 25 percent and is not added to other taxable income like in previous years. The tax is considered as final tax.In case of rental income, the taxable income for renting out immovable property is reduced by the actual maintenance costs proved by invoices. Instead of calculating the actual costs, a lump-sum deduction of 10 percent of the income received can be claimed.
The difference between the actual stock option price and the market value of shares is taxable at the moment of exercise.The income is considered as benefit in kind, which is taxable as employment income. The stock option income is also subject to social security contributions.
|Residency status||Taxable at:|
|Other (if applicable)||N/A||N/A||N/A|
* Only if the employment is exercised within the territory of Slovenia when exercise of stock options occurs.
In general, foreign exchange gains and losses are considered when determining taxable basis. However, this is not applicable if securities and shares were acquired before 1 January 2003 (in this case, market value as of 1 January 2006 is considered).
Principal residence gains are not taxable if the taxpayer has owned it and actually resided there for three years before the disposal.
Capital losses can be offset against capital gains. However, in certain cases, capital losses do not decrease taxable basis (investment coupons, debt securities, and shares from venture capital investments).
Individuals receiving an inheritance or a gift of a value of EUR 5,000 or more are liable to pay inheritance and gift tax. The threshold does not apply for immovable property and property rights. The spouse and all direct descendants are exempt.
The taxable basis for movable property is the market value, reduced by the amount of EUR5,000. The taxable basis for immovable property is 80 percent of its market value. The tax is levied at progressive rates (the progression depends on the relationship between the donor and the beneficiary and on the value of the gift).
Are there additional capital gains tax (CGT) issues in Slovenia? If so, please discuss?
Deemed disposal and acquisition
What are the general deductions from income allowed in Slovenia?
For determination of taxable income, the following annual deductions apply in year 2015.
|Basic allowance (total annual income up to EUR10,866.37)||6,519.82|
|Basic allowance (total annual income from EUR10,866.37to EUR12,570.89)||4,418.64|
|Basic allowance (total annual income more than EUR 12,570.89)||3,302.70|
|Disabled persons with 100 percent disability||17,658.84|
|For the first dependent child or dependent family member||2,436.92|
|For the second supported child||2,649.24|
|For the third supported child||4,418.54|
|For the fourth supported child||6,187.85|
|For the fifth supported child||7,957.14|
|Child with a mild, moderate or severe physical or mental impairment||8,830.00|
|Additional pension insurance||2,819.09|
Residents from other EU/EEA Member States who can file an annual tax return in Slovenia (if more than 90 percent of their income is taxable in Slovenia and the income received/taxable in Slovenia is exempt in his/her residence country) may claim the basic allowance, the relief for supporting family members, allowance for additional pension insurance etc.
What are the tax reimbursement methods generally used by employers in Slovenia?
In Slovenia employment agreements are usually concluded in gross amounts. In this case, the employer is required to withhold appropriate taxes and social security contributions when the income is paid. If the income is agreed in net amounts, it is grossed-up for the purpose of taxation. Expatriates usually have net agreements and the income should be declared to the tax authorities in the tax return (as the income is paid by a foreign entity). According to the explanation of the tax authorities, if the tax liability is paid by the foreign employer, the employee should report his gross income in the prepayment tax return (the gross income consists of the following: net income + employee's social security contributions and estimated Slovene tax liability).
According to Slovene legislation, residents are entitled to deduct taxes paid abroad from their tax liability in Slovenia. However, such deduction may not exceed lower of the following:
If Slovenia has concluded double tax treaty with respective country, provisions of that treaty should also be considered.
How are estimates/prepayments/withholding of tax handled in Slovenia? For example, Pay-As-You-Earn (PAYE), Pay-As-You-Go (PAYG), and so on.
Please see previous mention.
When the income is paid, social security contributions are deducted (contributions are shared by employers and employees).
When are estimates/prepayments/withholding of tax due in Slovenia? For example, monthly, annually, both, and so on.
In general, when income is paid by the Slovene entity, tax is withheld at payment of income.
When income is paid by the foreign entity, the tax return for employment income should be filed in 7 days following the receipt of income. Another tax return should be filed if income varies for more than 10 percent, otherwise, for residents the tax authorities may assess the tax advances for the whole year. For non-residents tax returns should be filed on a monthly basis.
Interest and dividends should be reported quarterly, rental income and capital gains annually.
Is there any Relief for Foreign Taxes in Slovenia? For example, a foreign tax credit (FTC) system, double taxation treaties, and so on?
In all instances where the Act clearly determines that the income from a foreign source is taxable in Slovenia, the Act also enables that taxable person to take into account thetax paid abroad.
If Slovenia has concluded double tax treaty with respective country, provisions of that treaty should also be considered.
What are the general tax credits that may be claimed in Slovenia? Please list below.
According to the tax treaties, tax paid abroad can be credited in Slovenia. However, the tax so credited cannot exceed the lower of the following:
In the absence of a tax treaty, foreign tax is credited against the final tax liability according to the Act, however up to the amount of foreign tax actually paid or up to the amount of tax that would be due on foreign income. No other tax credits are available in Slovenia.
This calculation assumes a married taxpayer resident in Slovenia with two children whose three-year assignment begins 1 January 2013 and ends 31 December 2015. The taxpayer’s base salary is USD 100,000 and the calculation covers three years.3
|Moving expense reimbursement||20,000||0||20,000|
|Interest income from non-local sources||6,000||6,000||6,000|
Calculation of taxable income
|Days in Slovenia during year||365||365||365|
|Earned income subject to income tax|
|Net housing allowance||9,035.46||8,791.85||10,605.39|
|Moving expense reimbursement||0.00||14,653.09||0.00|
|Total earned income||117,461.03||125,283.90||151,126.82|
|Other income - interest||4,517.73||4,395.93||5,302.70|
|Total taxable income||111,152.99||118,854.05||145,603.74|
Calculation of tax liability
|Taxable income as above||106,635.25||14,458.12||140,301.04|
|Slovene tax thereon||43,399,19||47,310.62||60.232.08|
|Domestic tax rebates (dependent spouse rebate)||0.00||0.00||0.00|
|Foreign tax credits||0.00||0.00||0.00|
|Total Slovene tax on earned income||43,399.19||47,310.62||60,232.08|
Calculation of tax liability on interest income
|Taxable income as above||4,517.73||4,395.93||5,302.70|
|Slovene tax thereon||1,129.43||1,098.98||1,325.67|
|Foreign tax credits||0.00||0.00||0.00|
|Total Slovene tax on interest income||1,129.43||1,098.98||1,325.67|
|Total Slovene tax||44,528.62||48,409.60||61,557.76|
Interest income is not included in the calculation as it is taxed at flat rate of 25 percent. If interest income is received by domestic and EU member states’ banks and savings institutions tax exempt income amounts to EUR 1,000. The exemption is not considered in the calculation.
1Certain tax authorities adopt an "economic employer" approach to interpreting Article 15 of the OECD model treaty which deals with the Dependent Services Article. In summary, this means that if an employee is assigned to work for an entity in the host country for a period of less than 183 days in the fiscal year (or, a calendar year of a 12-month period), the employee remains employed by the home country employer but the employee’s salary and costs are recharged to the host entity, then the host country tax authority will treat the host entity as being the "economic employer" and therefore the employer for the purposes of interpreting Article 15. In this case, Article 15 relief would be denied and the employee would be subject to tax in the host country.
2For example, an employee can be physically present in the country for up to 60 days before the tax authorities will apply the economic employer approach.
3Sample calculation generated by KPMG poslovno svetovanje, d.o.o., the Slovene member firm of KPMG International, based on the Act and tax rates applicable for 2013, 2014 and 2015.
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