Taxes in Slovenia, Taxation in Slovenia, Taxes system in Slovenia
Slovenia personal Income Tax
Personal income tax rates in Slovenia are progressive to 41%.
Taxable income (EUR) Tax on lower amount (EUR) Tax Rate on excess
0 to 7,528.99 0 16%
7,529 to 15,057.96 1,204.64 27%
15,057.97 and over 3,237.46 41%
Tax Allowances for 2010
Allowances that reduce the aggregated taxable base (deductions) for a resident taxpayer on an annual level include (for the year 2010):
- EUR 6,120.00 for residents with active income up to EUR 10,200.00;
- EUR 4,147.67 for residents with active income between EUR 10,200.00 and EUR 11,800.00;
- EUR 3,100.17 for residents with active income more than EUR 11,800.00.
- Disabled person's allowance: EUR 16,575.94 if the resident is a disabled person;
- Seniority allowance: EUR 1,334.18 for a resident older than 65 years of age;
- Independent artists, journalists and sportsmen: a special deduction of 15% of their revenues (up to EUR 25,000.00 of revenues);
- Student allowance: EUR 3,100.17 for income earned by pupils or students for temporary work done on the basis of a referral issued by a special organization dealing with job-matching services for pupils and students.
Family allowances: granted to residents who are supporting their family members, as follows:
- EUR 2,287.48 for the first dependent child; for each subsequent dependent child this amount is increased;
- EUR 8,288.52 for a dependent child who requires special care;
- EUR 2,287.48 for any other dependent family member.
Special deduction for voluntary additional pension insurance payments:
- premiums paid by a resident to the provider of a pension plan based in Slovenia or in an EU Member State according to a pension plan that is approved and entered into a special register, but limited to a sum equal to 24% of the compulsory contribution for compulsory pension and disability insurance for the taxpayer, or 5.844% of the taxpayer's pension, and no more than EUR 2,646.21 annually.
Pensioners and working disabled persons are entitled to a tax credit in the amount of 13.5% of the pension/compensation received from compulsory pension and disability insurance.
Self-employed persons may claim additional allowances:
- allowance for investment;
- allowance for investment in research and development;
- allowance for employing disabled persons;
- allowance for donations.
Derivative Instruments Gains Tax
Gains derived from derivative instruments are not taxed under the Personal Income Tax Act, except in the event they are derived by an individual who independently performs a business activity.
The derivative instruments gains tax was introduced in July 2008. The tax is payable by resident individuals (not independently performing a business activity) and is levied on the difference between the value of a derivative instrument upon disposal and its acquisition value. It is levied at degressive rates depending on the period of holding (from 20% to 0% (tax exemption) when the period of holding is longer than 20 years). Gains realized from short-term contracts are taxed at 40%.
Derivative instruments are defined under the Market in Financial Instruments Act, but also include certain debt securities.
Contractual Work Tax
The contractual work tax applies to all registered legal persons and individuals who perform a business activity and employ other persons under contract for temporary work. The tax is levied on each gross payment to individuals made according to the contract for temporary work. The taxable base also includes all refunds of expenses in connection with services performed.
The tax rate is 25%.
There are a number of exemptions from the contractual work tax. These include:
- payments for temporary services performed by students or pupils;
- payments for services performed for the help and care of disabled people;
- payments for certain defined services performed periodically in the area of agriculture;
- payments for the use of copyrights made under a copyright contract.
Social Security Contributions
Both employers and employees pay compulsory social security contributions. Employers withhold these contributions from wages or salaries and pay them together with their contributions every month as part of payroll accounting. Self-employed individuals are obliged to remit social security contributions on their own.
Compulsory social security insurance schemes apply to the whole population. There are four social security insurance schemes: i) pension and disability insurance; ii) health insurance; iii) unemployment; and iv) maternity leave.
The taxable basis for both the employer and the employee is the amount of the gross wage, which includes gross leave pay, fringe benefits and remuneration of expenses related to work above a certain threshold.
There are four rates of contributions that apply to employers and employees for the four social security insurance schemes.
Fund Employee (%) Employer (%)
Pension insurance 15.50 8.85
Health insurance 6.36 7.09
Unemployment 0.14 0.06
Maternity leave 0.10 0.10
Total 22.10 16.10
Taxation of Winnings from Conventional Games of Chance
Winnings from lotteries, raffles, scratch lotteries, bingo, betting and similar games of chance organized in Slovenia are subject to a 15% tax if the prize exceeds EUR 300. In the taxation of winnings the gross principle is used. No deductions are allowed. The tax is withheld by the gaming operator. Winnings from gambling are exempted from personal income tax.
Gambling Tax and Concession Fee
Slovenian legislation allows conventional and special games of chance. Conventional games of chance are: lotteries, raffles, scratch lotteries, bingo, betting and similar games. Special games of chance are casino games: machine gambling, table games, cards, etc. Special games of chance are organized either in casinos or gaming salons. All operators have to obtain a state license.
The operators of conventional games of chance are subject to the following taxes:
- 5% tax on gross gaming revenue (GGR), being the value of payments received for participation in a game of chance, reduced by the value of prices;
- 25% to 45% concession fee on GGR, depending on the type of game.
The operators of special games of chance are subject to the following taxes:
- 18 % tax on GGR;
- 5% to 20% concession fee on GGR, depending on the level of GGR.
Inheritance and Gift Tax
Inheritance and gift tax applies to transfers of property. The tax is paid by individuals or legal persons of private law who have received property in the form of inheritance or gifts.
Taxpayers are divided into four categories according to their relationship with the deceased or donor as follows:
- Class I: all direct descendants and spouses;
- Class II: parents, siblings and their descendants;
- Class III: grandparents; and
- Class IV: others.
The tax base of inherited or given property is the value after deduction of debts and other liabilities. For real estate this value is set at 80% of general market value; for moveable property, except money, this value is set as market value.
Exemptions to the inheritance and gift tax include: individuals classified under Class I; farmers who inherit agricultural land or an entire farm; and legal persons of private law, established for religious, humanitarian, educational, cultural, charitable and certain other activities. Moveable property up to a value of EUR 5,000 is also exempt from taxation.
The tax is levied progressively depending on the value of the property and the category under which the relation to the deceased or donor is classified. Table 8 presents the tax rates.
Inheritance and gift tax rates
Tax rate ranges
Class II 5% to 14%
Class III 8% to 17%
Class IV 12% to 39%
Taxpayers must declare their liability to the local tax authority within 15 days of receiving a gift. The assessment of inheritance tax is made according to the inheritance decision sent by the court to the tax authority. The tax is payable within 30 days of the assessment being issued.
Real Property Tax
Real property tax is levied on premises such as buildings and parts of buildings, including apartments, garages and secondary homes.
The taxpayer is the individual who is the actual or beneficial owner of the premises.
The taxable base for premises is the value ascertained according to special criteria issued by the government and local communities.
The tax rate for premises depends of the type of property and its value. The tax rate for dwellings varies from 0.10% to 1% of the value. The tax rates on premises used for rest and recreation are in the range of 0.20% to 1.50%. The tax rate for business premises varies from 0.15% to 1.25%. For business premises that are not used for attendant activities or are not rented, the tax rate is increased by 50%.
Exemptions to the real property tax include:
- buildings of less than 160 square meters;
- buildings used for agricultural purposes;
- business premises used by the owner or user for business activity;
- cultural or historical monuments.
In addition, there is a temporary exemption for 10 years to taxpayers who own a newly constructed building or repaired or renovated buildings, if the value of these buildings has increased as a result of renovation by more than 50%.
For a taxpayer with more than three family members who live in the owner's house, the tax decreases by 10% for the fourth and every additional family member.
The tax is assessed by the tax authorities by 31 March for the present year. Tax is paid in instalments for the year in advance. Tax is payable within 45 days of the assessment being issued.
Water Vessel Tax
The tax is levied on vessels longer than five metres registered in Slovenia or registered in other countries but owned by Slovenian residents. The taxpayers are the owners. The tax is levied for the calendar year, based on the length of the vessel and its engine power.
Motor Vehicle Tax
For passenger motor vehicles which are put into circulation in Slovenia for the first time (first registration in Slovenia) motor vehicle tax is paid. Import and acquisition of motor vehicles from other EU Member States are also taxed. From the 1st of March 2010 the tax rates depend on the environmental criteria (CO2 and Euro emission standards), and the rates are from 0.5% to 28% for petrol cars and from 1% to 31% for diesel cars.
Circulation tax is defined as an annual fee on the use of motor vehicles and is imposed on vehicles registered in Slovenia. The rates are set according to different categories of vehicles, and the outstanding amount is calculated in proportion to the duration of the registration period.
Slovenia Tax year – Slovenia tax year is the calendar year
Filing and payment – Personal income tax is collected by way of withholding during the year if the payer of the income is a Slovene legal person. If the payer of the income is a foreign legal entity, the individual is liable to report the income to the tax authorities, which then assesses the tax. Dividend and interest tax returns must be submitted quarterly, except returns for interest from the EU, which are due by the end of February, as are capital gains tax returns. For income taxed on an aggregate basis, the individual receives an information tax calculation from the tax authorities by the end of May for the previous year, under which tax prepaid during the year is taken into consideration. If the assessment is correct and the individual does not file a complaint, the tax assessed in the calculation becomes final. If the individual does not receive the information calculation by the end of May, he/she must file a tax return by the end of June. Thereafter, the tax authorities issue a tax assessment.
Penalties – EUR 200 if the personal income tax return is not submitted in accordance with the legal requirements.
Slovenia Corporate Tax
Slovenia corporate tax rate is 20%.
There is also a special rate of 0% which applies to investment funds, pension funds and insurance undertakings for pension plans under certain conditions. The special rate of 0% also applies for venture capital companies which were set up by the Venture Capital Companies Act and prepare a separate tax statement just for that part of their activity.
All legal persons carrying out commercial activities and having their head offices or place of effective management in Slovenia (partnerships and other corporate forms, investment funds, banks, insurance companies, cooperative enterprises, public enterprises and other legal persons) are subject to corporate income tax (taxation on worldwide income). Non-residents (legal persons who do not have their headquarters in Slovenia or their place of effective management in Slovenia) are subject to corporate income tax only if the income has its source in Slovenia.
There are a limited number of legal persons who are exempt from corporate tax for non-profit activities, for example: institutes, societies, foundations, religious communities, political parties, chambers or representative trade unions.
The Bank of Slovenia does not assess and pay corporate income tax.
The general corporate profit tax rate for the year 2010 and beyond is set at 20%. There is also a special rate of 0% which applies to investment funds, pension funds and insurance undertakings for pension plans under certain conditions.
There is also a tonnage tax regime, as an alternative to normal corporate income tax, available to resident shipping companies in respect of their income from the operation of ships in international traffic. The regime has been in place since 1 January 2008; the election term lasts for 10 years and is renewable. All ships which are operated by a group of companies ought to be included in the tonnage tax system. The tax base for a particular ship in a tax period is calculated by multiplying the daily tax base with the number of days a ship operates within the given tax accounting period. The tax base is the sum of tax bases for the tax accounting period of the ships included in the tonnage tax regime (see details in the section on tonnage tax).
The taxable base for computing the corporate income tax is profit, determined as the surplus of revenues over expenses recognized in the income statement according to accounting standards, unless otherwise stipulated by the Corporate Income Tax Act. Taxable income includes revenues, which are determined according to accounting standards. This generally includes all income received and capital gains realized. Recognized expenses according to the Corporate Income Tax Act are those expenses required to acquire taxable revenue. Expenses that are not required to acquire revenue are expenses for which it follows that: they are not directly linked with performing activities and are not a consequence of performing activities; they are of a private nature; and they do not conform to normal business practice. Non-recognized expenses are, inter alia, income similar to dividends, including payment of hidden profit distribution, expenses covering losses from previous years, costs relating to private life including the pertaining VAT, costs for forcible collection of taxes or other levies, penalties, taxes, deductible VAT from previous years, interest paid on taxes or other levies not paid on time, interest paid on loans received from persons whose principal office or place of residence is in a country outside the EU with a nominal level of tax on profits less than 12.5%, donations and bribes.
Depreciation may not exceed the level arrived at using straight-line depreciation and the maximum annual depreciation rates shown in Table 4.
Depreciation category Maximum annual depreciation rates (%)
Building projects, including investment property 3
Parts of building projects, including parts of investment property 6
Equipment, vehicles and machinery 20
Parts of equipment and equipment for research 33.3
Computers and computer equipment 50
Long-term plantations 10
Breeding and working herds 20
Other investments 10
The taxpayer may change the method of valuing inventories. Expenses from revaluation for impairment in goodwill are recognized up to the amount of 20% of the original value of the goodwill.
Loss is calculated as the surplus of expenses over revenues as defined by the Corporate Income Tax Act. Losses may be offset against taxable profits in the following years. Losses may be carried forward undefined, but the carry-back of losses is not permitted.
Capital gains from regular income are subject to tax.
The Directive on the common system of taxation applicable to mergers, divisions, transfers of assets and exchanges of shares concerning companies of different Member States has been implemented.
A general R&D investment incentive is represented as a deduction from the tax base of 40% of the amount invested in internal R&D activities and purchase of R&D services, but not exceeding the
amount of the taxable base. The amount of the additional deduction can be increased to 50% or 60%, depending on the regional relief scheme.
There is also a tax incentive (deduction) from the tax base of 30% of the amount invested in equipment and intangibles, but not exceeding the amount of EUR 30,000 and only up to the amount of the taxable base. Equipment does not include furniture and office equipment and motor vehicles, except cars and buses on hybrid or electrical drive, and trucks meeting the EURO V (for the years 2008, 2009 and 2010) and EURO VI emission requirements, as well as buses meeting the EURO IV (for the years 2008, 2009 and 2010) emission requirements.
A tax relief for employment is granted to a taxpayer that employs a person under the age of 26 or a person above the age of 55 who has been prior to employment at least six months registered as unemployed with the Employment Service of the Republic of Slovenia and has not been employed with this taxpayer or his/her associated enterprise for the last 24 months. Such taxpayer may claim a reduction of the tax base by 45% of the person's salary, however, only up to the amount of the tax base.
There are further general tax incentives under certain conditions for entities that provide work for apprentices or disabled persons. A taxpayer that employs disabled persons under the Act regulating the vocational rehabilitation and employment of disabled persons may claim a reduction in the taxable base in the amount of 50% of the salaries of such persons, but not exceeding the amount of the taxable base, whilst a taxpayer that employs disabled persons with 100% physical disability or deaf persons may claim a reduction in the taxable base in the amount of 70% of the salaries of such persons, but not exceeding the amount of the taxable base. A taxpayer that employs disabled persons above the prescribed quota, their disability not being the consequence of a workplace injury or occupational disease at the same employer, may claim a reduction in the taxable base in the amount of 70% of the salaries of such persons, but not exceeding the amount of the taxable base.
If a taxpayer under a teaching agreement employs an apprentice or student for performing practical work in professional education, the taxpayer may claim a reduction in the taxable base in the amount of the salary paid, but not exceeding 20% of the average monthly salary in Slovenia for each month of performing practical work and each individual person who takes part in such professional education.
Furthermore, there is tax relief for donations. A taxpayer may claim a reduction in the taxable base for amounts paid in cash and in kind for humanitarian, disabled, charitable, scientific, educational, medical, sports, cultural, ecological and religious purposes, for payments made to residents of Slovenia or residents of Member States of the EU or EEA (excluding the Principality of Liechtenstein) who are established under special regulations for the performance of such activities and up to an amount equivalent to 0.3% of the taxpayer's taxable revenue in the current tax period. A taxpayer may also claim a reduction in the taxable base for amounts paid in cash and in kind to political parties up to an amount equivalent to three times the average monthly salary per employee of the taxpayer in the current tax period. The cumulative amount of relief granted may not exceed the amount of the taxable base. An additional reduction of 0.2% of the taxpayer's taxable revenue is granted for amounts paid in cash and in kind for cultural purposes and voluntary societies incorporated for protection from natural and other disasters who work in the public interest and are residents of Slovenia or residents of Member States of the EU or EEA (excluding the Principality of Liechtenstein) and are established under special regulations for the performance of such activities.
Relief for voluntary supplementary pension insurance up to 24% of the compulsory contributions for pension and disability insurance for an insured employee, but no more than EUR 2,390 annually per employee, may apply under certain conditions.
Additional tax incentives for eligible costs for initial investments and employment costs are given to companies which operate in economic zone (for details see in the section on economic zones).
Corporate income tax is payable for the tax period corresponding to the calendar year; however, corporate taxpayers may choose their tax period to be the same as their business year, which does not necessarily equal the calendar year. In that case the taxpayer must notify the tax authority of its choice and keep in mind that the tax period chosen may not exceed a period of 12 months. The taxpayer may not change the tax period for three years.
Tax payments must be made in advance (on a monthly or quarterly basis). If the limit of EUR 400 is exceeded, the taxpayer pays the instalment on a monthly basis; if the limit of EUR 400 is not exceeded, the instalment is paid on a quarterly basis. Tax returns must be submitted to the tax authorities by 31 March for the preceding calendar year if the calendar year is the same as the tax year. If the calendar year is not the same as the tax (business) year, tax returns must be submitted to the tax authorities within three months of the current business year for the preceding business year.
Companies paying dividends withhold tax at a rate of 15% on each dividend distributed to residents and non-residents of Slovenia. If international treaties on the avoidance of double taxation stipulate a tax rate different from 15%, the tax rate from the treaty applies. There is no withholding tax if a resident taxpayer notifies the payer of its tax number and if the non-resident taxpayer for activities in a business unit in Slovenia notifies the payer of its tax number. No tax is withheld for payments of dividends and income similar to dividends distributed to persons to whom a common system of taxation, applicable in the case of parent companies and subsidiaries, applies under certain conditions (at least 10% equity and shares held for at least 24 months). The Directive on a common system of taxation applicable in the case of parent companies and subsidiaries of different Member States has been implemented.
There is no withholding tax on dividends paid to a non-resident who is a resident of the EU or EEA (excluding the Principality of Liechtenstein) if the recipient of the dividend is not able to set off the applicable Slovenian withholding tax in his/her country of residence. Similar applies to payments of dividends and interest paid from Slovenia to EU and EEA (excluding the Principality of Liechtenstein) investment and pension funds.
Interest and Royalties
Withholding tax at a rate of 15% applies to interest, with the exception of interest on loans raised and securities issued by the government of Slovenia, and interest paid by banks.
No withholding tax is paid in respect of payments on interests arising from debt securities issued by a company established under the regulations applicable in the Republic of Slovenia, if:
- they do not contain the option of exchange for an equity security (or if they do not contain the holders' option by way of which an exchange for an equity security could be achieved if the issuer of a debt security is a bank) and
- they are admitted to trading on a regulated market or are traded in a multilateral trading system in an EU Member State or in a OECD member country,
with the exception of debt securities issued for the payment of damages under the law regulating denationalisation.
Withholding tax at a rate of 15% applies to royalties. There is no withholding tax if a resident taxpayer notifies the payer of its tax number and if a non-resident taxpayer for activities in a business unit in Slovenia notifies the payer of its tax number.
The Directive on the common system of taxation applicable to interest and royalty payments made between associated companies of different Member States has been implemented.
Tax on Insurance Services
This tax is levied on insurance premiums and paid by insurance companies. The tax rate is 6.5%.
Slovenia vat (Value added tax)
The standard rate of VAT in Slovenia is 20%.
There are two VAT rates applicable in Slovenia:
(1) The standard rate of 20% applies to all supplies of goods and services not specified as being subject to the reduced rate or to exemptions.
(2) The reduced rate of 8.5% applies to goods and services specifically defined by the VAT Act. These include food, medicines, the supply of medical appliances for the personal use of disabled persons, supply of water, supply of books and other printed materials, construction, renovation and supply of housing, and tickets to cultural and sports events. The list has been supplemented by new changes of VAT Act.
All companies pay VAT except those carrying out certain defined activities, small businesses and farmers with a turnover and income below defined thresholds, and those dealing with products intended for export and international transport.
VAT is payable on all supplies of goods and services, effected by a taxable person acting as such, for consideration within the territory of Slovenia, on intra-Community acquisition, including intra-Community acquisition of new means of transport and on importation of goods. It is also imposed on the transfer of ownership of buildings or parts thereof if the transfer is made before first occupancy or within a period of two years after first occupancy.
Slovenia adopted a value added tax system in July 1999. In May 2004, when Slovenia became a member of the European Union, all provisions concerning intra- Community trade were enacted. The Slovenian VAT Act was changed with effect from 1 January 2010. The purpose of those changes was to follow the development of European VAT regulations.
A taxable person must apply for registration if the value of his supplies within the period of the last 12 months exceeds the threshold of EUR 25,000. There is a separate threshold for registration in the VAT system for agricultural activities exceeding EUR 7,500 in accordance with the cadastral income of agricultural and forestry land. Small businesses (including farmers) may apply for voluntary registration which is valid for at least a five-year period.