Corporate income tax

Corporate income tax is regulated by the Corporate Income Tax Act (CIT-2).

Taxpayers and the scope of their tax liability

A taxable person is:

• a legal entity according to national law;
• a legal entity according to foreign law; or
• an association of persons according to foreign law that is without a legal entity and is not a taxable person according to the law that regulates personal income tax.

A resident (with its registered office or place of effective management in Slovenia) is a person taxable for all income that has its source in or outside the Republic of Slovenia (taxation on worldwide income).

A taxable person that is a non-resident (whose registered office or place of effective management is not in Slovenia) is obliged to pay taxes on all income that has its source in Slovenia, meaning all income generated through activities within a business unit or via a business unit in Slovenia, as well as other income that might be generated in Slovenia. A business unit is considered as being the place of business, i.e. the place in or through which the non-resident’s activities and/or business in Slovenia are conducted in whole or in part. A business unit may be an office, subsidiary, factory, workshop, mine, quarry etc. or a construction site, assembly plant or other similar project lasting more than 12 months.

Tax exemptions

A taxable person like an institution, association, foundation, religious community, chamber and representative trade union established according to a special act on performing non-profit activities is not liable to pay tax if it is actually performing its operations according to the purpose of its establishment and operation. If part of its activity is performed for profit, then tax is levied and paid on that part.

Tax rate

The general corporate tax rate in 2023 is 19%. The special tax rate of 0% is used for investment funds and pension funds if they meet the conditions defined by law.

Tax base

The tax base for corporate income tax is profit (excess of revenues over legally approved expenses in the annual profit and loss statement).

Recognised expenses are those required for generating revenues (recognised expenses include costs of goods and services, labour costs etc.).

Partially recognised expenses (in the amount of 50%) are entertainment costs and costs of supervisory boards. Entertainment costs include the costs of hospitality, entertainment, or gifts given in connection with business contacts with business partners.

Non-recognised expenses encompass income similar to dividends, including hidden profit distribution, expenses to cover losses accrued from previous years, expenses to cover the payment of penalties, bribes, costs relating to private life, donations, VAT if the taxable person has not exercised their right to a refund of entry taxes, certain types of interest etc.

The tax base may be reduced by the following costs:

Depreciation (the straight-line depreciation method is used).

Expenses linked to depreciation may not exceed the level arrived at using straight-line depreciation and the 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%; and
• other investments 10%.

Reimbursement for annual leave, long-service bonuses, severance pay upon retirement, solidarity aid, for work-related expenses such as the cost of meals during work and for transport to and from work, field allowances, separate living allowances and for expenses for work-related travel (per diem allowances, reimbursement of transport costs, reimbursement of accommodation costs) are fully recognised.

Provisions formed in accordance with the standards are recognized as an expense in the amount of the accrued amount, except for provisions, which are recognized in the amount of 50% of formed provisions (provisions for guarantees given when selling products or services, provisions for reorganization, provisions for expected losses from onerous contracts, provisions for pensions, provisions for jubilee awards and provisions for severance pay upon retirement).

A loss may be carried forward for an unlimited period of time, although the reduction of the tax base due to tax losses from previous tax years is limited to 50% of the tax base of the tax period.

Exempt dividends and (partly) capital gains

In general, dividends are exempt from the CIT-2 tax base in the hands of a corporate shareholder. Domestic dividends are exempt if a subsidiary is subject to CIT-2. Foreign-source dividends paid by an EU subsidiary company to its Slovenian parent company are exempt if the subsidiary is subject to a corporate income tax listed in the EU Parent-Subsidiary Directive (2011/96/EU). There is no minimum level of ownership or holding-period requirements. Dividends derived from outside the EU are also exempt unless they are distributed by a company that is resident in a non-EU state where the general and/or average nominal tax rate is lower than 12.5%, noting that such states are listed by the Ministry of Finance.

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 unable to set off the applicable Slovenian withholding tax in its country of residence. No withholding tax applies to payments of dividends and interest paid from Slovenia to EU and EEA (excluding the Principality of Liechtenstein) investment and pension funds under certain conditions.

Capital gains are included as ordinary income by the accounting standards and taxed accordingly. Under the CIT-2 implementing EC Merger Directive (90/434/EEC), capital gains derived from the transfer of assets are exempt in certain conditions (branch of activity, valuation requirements, notification prior to transaction). In addition, 50% of capital gains derived by a taxpayer from the alienation of equity holdings are exempt from taxation in certain conditions (at least 8% participation, a 6-month holding period and employment of at least one person full-time continuously in that period, if the participation is not in a company that is a resident of a non-EU state where the general and/or average tax rate is lower than 12.5%, noting that such states are listed by the Ministry of Finance and is not on the European Union's list of jurisdictions unwilling to cooperate for tax purposes published in the Official Journal of the European Union). As a consequence, only 50% of capital losses are tax deductible.

Tax relief

Tax relief for investments in research and development

A taxable person can use the reduced tax base in the amount of 100% of the amount invested (but only up to the tax base) in research and development. Investments referred to in this paragraph are investments in:

• internal research and development activities of a taxable person, including the purchase of research and development equipment which is exclusively and permanently used for the research and development activities of the taxable person; and
• the purchase of research and development services (performed by other persons, including associated enterprises, or by other public or private research organisations).

Tax relief for investments

A taxable person can use the reduced tax base in the amount of 40% of the amount invested in equipment or intangible assets (including financial leases, but excluding goodwill and real property rights) and up to the amount of the tax base.

Equipment does not include furniture and office equipment and motor vehicles except computer equipment, cars and buses with hybrid or electrical drive systems, and trucks and buses meeting the EURO VI emission requirements.

Tax relief for employment

A taxable person employing someone younger than 29 years or older than 55 years, or employs a person in a profession for which there is a shortage of job seekers in the market,who had not in the last 24 months been employed by this taxable person (employer), is entitled to a reduction of its taxable base in the amount of 45% of the salary of that person, but only up to the amount of its tax base.

New relief for a taxpayer who employs a person under the age of 25 who is employed for the first time.

Tax relief for employing disabled persons

A taxable person that employs a disabled person can use tax relief of 50% of the disabled person’s salary (however, only up to the amount of the tax base). By employing a disabled person with a 100% physical disability or a deaf person, the reduction of the tax base is 70% of the salary of the disabled person (but only up to the amount of the tax base).

Tax relief for carrying out practical training within professional training

A taxable person taking on a trainee to perform practical work within professional education may exercise the right to decrease the tax base by the amount of payment made to such a person; however, only up to a maximum of 80% of the average monthly salary of people employed in Slovenia for each month the practical work is carried out by the individual person.

Tax relief for voluntary supplementary pension insurance

An employer financing a pension plan of collective insurance can take advantage of the reduction of the tax base for premiums of voluntary supplementary pension insurance paid to the benefit of employees to an administrator of a pension plan with its registered seat in the Republic of Slovenia or any other EU member state. The pension plan must be approved and registered in a special register in accordance with the regulations governing voluntary supplementary pension and disability insurance. The tax relief is used for the year in which the premiums were paid up to an amount equalling 24% of the compulsory contributions for pension and disability insurance for the employee/insured person, a maximum of EUR 2.903,66 a year and up to the amount of the tax base for the tax period.

Tax relief for donations

A taxable person can reduce their tax base for donations for generally beneficial, charitable, humanitarian, scientific, educational, sporting, cultural, health, ecological and religious purposes, disabled persons assistance as well as social assistance, established under special regulations for the performance of such activities, and if such payments were paid to Slovenian or EU residents or EEA residents (but excluding their business units outside the EU).

An exception is recognised in the amount of 1% of the taxable income for the tax period of the taxable person, but only up to the amount of the tax base for the tax period.

A taxable person may exercise the right to an additional reduction of the tax base in the amount of 0.2% of taxable income for the tax period for donations made for cultural purposes, sports purposes or donations to certain voluntary societies established for natural and other disaster protection, but only up to the amount of the tax base for the tax period.

A new special allowance to support top-level sport, namely a allowance for payments to providers of a top-level sport program for investments in top-level sport up to an amount corresponding to 3.8% of the taxable person's taxable income.

Tax relief for investment in the digital and green transition

New relief for investing in digital transformation and the green transition. The relief is set at 40% of the amount representing investments in digital transformation and the green transition during this period. Investments that can be used include cloud computing, artificial intelligence, big data, environmentally friendly technologies, cleaner and healthier public and private transport, decarbonisation of the energy sector, energy efficiency of buildings, and the introduction of other standards for climate neutrality.

Limitation of tax base reduction

For all of the tax relief types described above, the following apply: The tax base reduction due to tax losses from previous tax years, together with the exercise of unused parts of tax relief from previous tax periods, is recognised at the maximum of 63% of the tax base.

Preventing the double taxation of income generated by residents outside of Slovenia

A resident taxable person can, by exercising the right to the legally prescribed limit, reduce (deduct) from their tax liability the amount of foreign tax paid on income generated outside of Slovenia (foreign income) which is included in their tax base (the tax credit method is used).

The tax credit must not exceed the lower of the following:

• the amount of foreign tax on foreign income which was final and actually paid; and
• the amount of tax which would be payable on the foreign income if the tax credit were not possible.

If Slovenia has concluded a double taxation agreement with a third state, the foreign tax amount calculated at the rate laid down in that agreement is deemed to be the final foreign tax on the income from that state.

Controlled foreign company, Exit Taxation, Hybrid Mismatches

CIT-2 is aligned with the EU rules against erosion of the tax base in the internal market and the shifting of profits out of the internal market: exit taxation, a general anti-abuse rule, controlled foreign company rules, and rules to tackle hybrid mismatches.

Tax on the transfer of assets, exchange of capital shares and mergers or divisions within the EU

The following tax relief on corporate income tax applies to transactions involving the transfer of assets, the exchange of capital shares or mergers and divisions occurring in the territory of the EU among companies which are residents of Slovenia or other EU member states (this also applies to European joint-stock companies – SEs):

• for the transfer of assets (a transaction in which the transferring company, without being dissolved, transfers one or more of its branches of activity to another existing company (the acquiring company) or to a newly established company in exchange for the issue or transfer of securities representing the capital of the acquiring company to the transferring company), the transaction is considered to be tax-neutral (deferral of tax) under the conditions defined by law;
• for the exchange of capital shares (a transaction in which the acquiring company obtains securities of the acquired company in exchange for its own securities, thus acquiring at least a majority of voting rights in the acquired company), a shareholder of the acquired company is exempt from tax with regard to profits or losses arising from the exchange of securities with the acquiring company unless it receives payment in cash; and
• for company mergers and divisions (a status change in the number of companies so as to create a new company or the division of an existing company into a number of new companies in accordance with the Companies Act), the transaction is considered to be tax-neutral (deferral of tax) under the conditions defined by law.

Withholding tax

This tax is paid on the following resident and non-resident incomes which have their source in Slovenia:

• dividends and income similar to dividends, except for dividends and income similar to dividends distributed through a business unit of a non-resident that is located in Slovenia;
• interest (with some exceptions, for example: interest on loans raised by and securities issued by the Republic of Slovenia, interest paid by banks);
• payments for using or for the right to use copyrights, patents, trademarks and other owners’ rights and other similar incomes;
• payments for leases on real estate located in Slovenia;
• payments for certain services provided by performing artists or sportspeople if these payments belong to another person (for example, a society within which they perform the service); and
• payments for certain services where payments are made to people whose head office or place of actual management is located in countries outside the EU where the general (or average nominal) tax rate on profit is below 12.5%.

The tax on the abovementioned income is not paid if the income was paid:

• to the Republic of Slovenia, a self-governing local unit in Slovenia or the Bank of Slovenia;
• to a resident taxable person that has informed the income payer of its tax number; or
• to a non-resident taxable person that is obliged to pay the tax on income generated through activities in a business unit or via a business unit in the Republic of Slovenia and who has informed the income payer of its tax number provided that the income was paid to that business unit.

There is no withholding tax on dividends paid to a non-resident who is a resident of the EU or EEA if the recipient of a dividend is unable to set off the applicable Slovenian withholding tax in its country of residence. Something similar applies to payments of dividends and interest paid from Slovenia to EU and EEA investment and pension funds.

No withholding tax is also paid on interest from debt securities issued by an entity established under Slovenian regulation if those securities do not contain a swap option for equity securities and are admitted to trading on a regulated market or traded in the multilateral trading system in an EU or OECD member state. The abovementioned regime does not apply to interest on debt securities issued to pay compensation in accordance with the law governing denationalisation.

The tax rate is 15% of the tax base that represents an individual income. The benefits provided by international agreements to prevent double taxation (a tax calculation according to a lower tax rate) can be used based on a decision of the tax authorities. In the event tax was paid despite the relief offered by the international agreement according to the statutory tax rate (where a higher amount of tax was then paid), it is possible to obtain a refund for the tax already paid.

Flat-rate taxation

A taxable person (a company and/or a foreign person that is comparable to a company – for its business unit in Slovenia) whose annual income does not exceed EUR 50,000 (EUR 100,000 if they employ at least one person full time for at least 5 months) can choose a simplified tax regime (flat-rate taxation). Under this regime, the tax base is determined on the basis of lump-sum costs accounting for 80% of income (40% for income exceeding EUR 50,000); however, tax relief cannot be claimed or a tax loss declared. The corporate tax rate is 19%.

The lump-sum costs cannot exceed EUR 40,000 (or EUR 80,000) per year.

When a taxable person’s average revenues for the last two consecutive years exceed EUR 150,000, they must exit the flat-rate taxation system.

Tonnage tax

Tonnage tax is regulated by the Act on Tonnage Tax. A tonnage tax regime, as an alternative regime to corporate income tax, is available to resident shipping companies with respect to their income from the operation of ships in international traffic, provided that the ships referred to meet the prescribed conditions and are being strategically and commercially operated from Slovenia.

The tax base for a particular ship in a tax period is calculated by multiplying the daily tax base by the number of days a ship was operating in the given tax accounting period. The tax base is the sum of tax bases for the tax accounting period of ships that are included in the tonnage tax regime.

Personal income tax

Personal income tax is regulated by the Personal Income Tax Act.

Taxable persons

Taxable persons are residents and non-residents. Residents are liable to income tax on their worldwide income (i.e. income derived in Slovenia plus income derived abroad). Non-residents are liable to income tax on income derived in Slovenia.

An individual is a resident of Slovenia for the purposes of personal income tax if they have a formal residential tie with Slovenia (i.e. have a permanent residence in Slovenia, are a Slovenian public employee employed abroad or were a Slovenian resident but are currently employed in an EU institution) or have an actual residential tie with Slovenia (have a habitual abode or centre of personal and economic interests or is present for more than 183 days in a taxable year in Slovenia).

Each individual is treated as a separate taxpayer. There is no taxation of spouses or a family as a whole. The tax year is the calendar year.

For personal income tax purposes, income is classified in six categories:

• income from employment;
• income from business activity;
• income from basic agriculture and forestry;
• rental income and royalties;
• income from capital; and
• other income.

The tax base is determined according to the formula applying to each type of income.

Tax rates

All categories of income, except income from capital, rental income and income deriving from business for which the tax base is determined using lump-sum deductions, are annually aggregated and taxed synthetically at the following progressive rates:

During the year an advance tax is paid, either by a tax return, tax declaration or withholding – depending on the type of income and the circumstances of the taxpayer receiving the income.

Income from capital (interest, dividends and capital gains) and rental income are taxed at the following tax rates:

• interest – 25%;
• dividends – 25%;
• capital gains – 25% for a holding period of up to 5 years, 20% for a holding period from 5 to 10 years, 15% for a holding period from 10 to 15 years and an exemption for a holding period greater than 15 years; and
• rental income – 25%.Unlike other types of income, tax paid on income from capital and rental income is final tax for residents and non-residents alike.

As an option and under certain conditions, personal business income may be taxed on a schedular basis (see Flat-rate tax).

Tax allowances

Allowances that reduce the aggregated tax base (deductions) for a resident taxpayer on an annual level include (for 2023):

General allowance:

• EUR 5,000.00 + (18,761.40 – 1.17259 x total income) for residents with an active income up to EUR 16,000.00; and
• EUR 5,500.00 for residents with an active income of more than EUR 16,000.00.

Personal allowances:

• disabled person’s allowance (100% physical impairment): EUR 18,188.61;
• senior and volunteers allowance: EUR 1,500.00
• student allowance: EUR 3,500.00;
• employees under 29: EUR 1,300.00 and
• independent artists, journalists and sportsmen’s allowance: 15% of their revenues (up to EUR 25,000.00 of revenues).

Family allowances granted to residents supporting their family members, as follows:

• EUR 2,698.00 for the first dependent child; for each subsequent dependent child, this amount is increased;
• EUR 9,777.00 for a dependent child who requires special care; and
• EUR 2,698.00 for any other dependent family member.

A special deduction for voluntary additional pension insurance payments: up to EUR 2,903.66.

The self-employed may claim additional allowances (for investments; for investments in R&D, for investments in digital and green transition, for employment; for employing disabled persons; for carrying out practical training within professional training; for voluntary supplementary pension insurance; and for certain donations).

Such allowances, together with the exercise of unused parts of tax relief from previous tax periods, are limited to 63% of the tax base from income arising from business activity.

Pensioners and the working disabled are entitled to a tax credit in the amount of 13.5% of the pension/compensation received from compulsory pension and disability insurance.

Residents of another EU member state who derive income from employment, business income, income from agriculture and forestry, royalties or other income in Slovenia may claim various allowances if they can prove that the abovementioned income derived in Slovenia amounts to at least 90% of their entire taxable income for the tax year, and that this income is not taxed in the country of their residence. A non-resident claiming such allowances is obliged to file the same annual active income tax return that applies to residents.

The Profit-Sharing Act regulates the sharing of a company’s profit among employees and provides tax incentives with regard to corporate income tax, personal income tax and social security contributions. The Profit-Sharing Act determines two profit-sharing schemes: one in the form of cash payments and the other in the form of a number of shares in the company.

The flat-tax scheme for smaller entrepreneurs, which provides a simplified tax regime with lump-sum deductions, aims to reduce the administrative burden on entrepreneurs with an annual turnover of up to EUR 50,000 (EUR 100,000 if they are full-time self-employed or if they full-time employ at least one person for at least 9 months).

In accordance with this regime, the tax base for income from business is determined on the basis of a lump-sum deduction of taxable income (80% or 40% depending on conditions and income), but no tax allowances can be claimed. The income tax rate is 20%. The tax paid is considered final (schedular taxation).

Where a taxable person’s average revenues for the last two consecutive years exceed EUR 150,000, they must exit the flat-rate taxation system.

Contractual work tax

Work performed under a contract is also regulated by the Personal Income Tax Act (where the taxable person is the contractor/work-performing party) as well as the Contractual Work Tax Act (where the taxable person is the employer/work-receiving party).

The tax on work done under a contract applies to all legal persons and individuals performing a business activity and employing other persons under a contract for temporary work. The tax is levied on each gross payment made to individuals under a contract for temporary work. The taxable base also includes all refunds of expenses connected with the services performed.

The tax rate is 25%.

There are several exemptions from the contractual work tax. These include payments for temporary services performed by students or pupils; payments for services performed for helping and caring for disabled people; payments for certain defined services performed periodically in the area of agriculture; and payments for the use of copyrights made under a copyright contract.

Derivative instruments gains tax

The derivative instruments gains tax is regulated by the Derivative Instruments Gains Tax Act. Derivative instruments are defined by the Financial Instruments Market Act, but also include certain debt securities.

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 holding period, i.e. from 27.5% to an exemption where the holding period exceeds 20 years. Gains realised from short-term contracts are taxed at 40%.

Social security contributions

Social security contributions are regulated by the Social Security Contributions Act and other laws. Both employers and employees pay compulsory social security contributions. Employers withhold these contributions from the wages or salaries of the employees and pay them together with their contributions every month as part of payroll accounting. The self-employed, shareholders and owners of companies are obliged to make their own social security contributions.

Compulsory social security insurance schemes apply to the whole population. There are four social security insurance schemes:

• pension and disability insurance;
• health insurance;
• unemployment contribution; and
• parental leave contribution.

The base for the contributions of both the employer and employee is the amount of the gross wage, fringe benefits and the remuneration of expenses related to work above a certain threshold.

The self-employed are obliged to pay both the contribution of the employer and the contribution of the employee by themselves. The base for the social security contributions of the self-employed is determined by a special formula taking into account the net business income of the self-employed. The self-employed can opt to choose a higher base for contributions.

Value-added tax (VAT)

Tax on the turnover of goods and services is regulated by the Value Added Tax Act, which is fully harmonised with all provisions of the VAT Directives.

VAT is payable:

• on all taxable supplies of goods and services made by a taxable person in the course of their economic activity in Slovenia;
• on an intra-Community acquisition; and
• on the import of goods.

A taxable person is any person who independently carries out any economic activity, in any place, regardless of its economic outcome.

A taxable person must apply for registration in the following cases:

• a domestic taxable person, if the value of their supplies over the last 12 months exceeds the threshold of EUR 50,000;
• a foreign taxable person making supplies of goods and services to Slovenia regardless of the transaction value (unless supplies are made only to taxable persons registered for VAT in Slovenia under general scheme);
• a domestic or foreign taxable or non-taxable person who makes intra-Community acquisitions of goods if their total value exceeds the threshold of EUR 10,000;
• a foreign taxable person making distance supplies of goods or performing TBE services to final consumers, if the value of supplies exceeds the threshold of EUR 10,000 and they are not registered in the OOS system;
• any taxable person receiving services in Slovenia upon which VAT is payable by the recipient; and
• any taxable person supplying services to another taxable person from another member state for which VAT is payable by the recipient.

Small businesses may apply for voluntary registration, which should be valid for at least a 5-year period.

Three VAT rates apply in Slovenia.

The standard VAT rate is 22% and relates to all supplies of goods and services not specified as being subject to the reduced rates or to exemptions.

The reduced rate is 9.5% and pertains to goods and services specifically defined by the VAT Act (foodstuffs; water supplies; medicines and personal medical appliances; passenger transport; admission to cultural and sporting events; the supply, construction, renovation and alteration of social housing; hotel accommodation etc.).

The special reduced rate of 5% pertains to the supply, including library loan, of books, newspapers, and periodicals.

In compliance with EU rules, several activities or transactions are exempt from VAT (e.g. certain activities in the public interest, certain financial transactions, insurance and reinsurance transactions, international transport of passengers except for international road transport, leasing and letting of immovable services, the supply of goods essential to VAT-exempt transactions, universal postal services).

Person liable for charging and paying VAT

Depending on the location of the buyer and seller as well as the type of supply, the following rules apply:

• the buyer and seller are in Slovenia: the seller charges and pays VAT on supplies of goods and services;
• the buyer and seller are in different EU member states: the buyer charges and pays VAT on the acquisition of goods and for business-to-business supplies of services. For business-to-consumer supplies of services, the seller charges and pays VAT. Specific rules apply to certain services (e.g. intermediary services; services connected with immovable property; transport services; cultural, artistic, sporting, scientific, educational, entertainment or similar services; ancillary transport services; valuations of movable tangible property or work on such property; restaurant and catering services; the hiring of means of transport; and telecommunication, broadcasting and electronic services supplied to consumers);
• the buyer is in Slovenia and the seller is in a non-EU country: the customs administration charges VAT on the importing of goods whereby the buyer pays the VAT. Different rules apply to services (depending on the place of the provision and type of service; in most cases, the buyer pays the VAT, with the latter exercising it as input VAT); and
• the buyer is in a non-EU country and the seller is in Slovenia: the seller does not charge or pay VAT.

Registration of foreign taxable persons

A foreign natural or legal person performing business activity with goods and services in Slovenia which is subject to Slovenian VAT (except when they supply goods or services for which VAT is payable solely by the customer) must register for VAT and acquire a VAT identification number prior to commencing business.

Upon registration, both foreigners and Slovenian taxable persons must charge VAT and submit a VAT return form to the tax authority once a month (or quarterly if certain conditions are met). More

Appointment of a representative

A foreign person may authorise a Slovenian taxable person to perform obligations and exercise their rights on their behalf as regards the obligations and rights of a foreign person registered for VAT in Slovenia.

A tax representative may be any legal or natural person that is a resident of Slovenia and liable to VAT, except the subsidiaries of a foreign person.

The appointment of a tax representative is mandatory for foreign persons which do not have their registered seat in Slovenia or in any other EU member state. Certain exceptions apply (special non-union scheme for services, special scheme for international occasional road transport of passengers; concluded mutual assistance agreement).

VAT refunds to foreign taxable persons

A foreign taxable person is entitled to a refund of VAT paid in Slovenia if the following conditions are met:

• they are not established in Slovenia and have no permanent address or usual residence in Slovenia;
• they are not registered in Slovenia; and
• they do not supply goods and services in Slovenia (except for transport and transport-related services subject to exemption and for supplies of goods and services, where the tax is payable by the person receiving the supply).

The minimum refund limits are:

• EUR 400 if the refund period is less than 1 calendar year but not less than 3 months (6 months in case of taxable persons established outside the EU); and
• EUR 50 if the refund period is 1 calendar year or the remaining portion of a calendar year.

The Ljubljana Financial Office is the competent tax authority for making VAT refunds to foreign taxable persons.

VAT refunds to taxable persons established in another EU member state

A taxable person established in another EU member state is entitled to a refund of those VAT amounts for which the taxable person established in Slovenia may exercise a right of deduction.

To be entitled to a refund of VAT in Slovenia, the taxable persons must carry out transactions for which they hold the right to deduct VAT in the member state where they are established.

To obtain a VAT refund in Slovenia, the taxable person must submit an electronic refund application via the electronic portal set up by the member state that issued their VAT number (typically the member state in which they are established).

Refund applications must be submitted by 30 September of the calendar year following the refund period.

VAT refunds to taxable persons established outside the EU

VAT refunds to taxable persons established outside the EU are only granted according to conditions of reciprocity.

Taxable persons file their VAT refund claims in Slovenia via the eDavki electronic portal by using the form DDV-VTD. Before filing a claim, an applicant must obtain a tax number and a qualified digital certificate to access the Financial Administration’s electronic eDavki system. Alternatively, taxable persons may authorise another person to file a VAT refund claim through the eDavki portal and to represent them in the refund procedure.

A refund application must be submitted to the competent tax authority by 30 June of the calendar year following the refund period. More

New rules regarding e-commerce

Rules on the VAT for cross-border B2C e-commerce activities were introduced on 1 July 2021.

The transactions covered by the new rules are:

• distance sales of goods within the EU by suppliers or deemed suppliers (online marketplaces/platforms facilitating supplies);
• domestic sales of goods by deemed suppliers;
• supplies of services by EU and non-EU sellers to consumers within the EU (cross-border B2C services); and
• distance sales of goods imported from third territories or third countries carried out by suppliers and deemed suppliers, except for goods subject to excise duties.

Some administrative simplifications were introduced. The existing thresholds for distance sales of goods within the EU were abolished and replaced by a new EU-wide threshold of EUR 10,000. The new threshold covers distance supplies of goods within the EU and TBE services performed to final consumers. If suppliers exceed the threshold, they are able to pay the VAT to the country of destination through their regular VAT identification, or through the one-stop-shop (OSS) system.

Another novelty is the introduction of the Import one-stop shop (IOSS) for the declaration and payment of VAT on distance sales of low value goods imported from outside of the EU. The import-VAT exemption for consignments valued at up to EUR 22 is abolished.

One stop shop system

Three special schemes have been introduced to allow taxable persons to declare and pay VAT due in Member States in which they are not established, via a web-portal located in the Member State in which they are identified:

• the non-Union OSS scheme, which covers supplies of all types of cross-border services provided by taxable persons not established in the EU to final consumers in the EU;
• the Union OSS scheme, which covers all types of business to customer (B2C), supplies of services as well as intra-EU distance sales of goods, and certain domestic supplies facilitated by electronic interfaces;
• the IOSS scheme, which covers distance sales of goods imported from third territories or third countries to customers in the EU up to a value of EUR 150.

The OOS simplifies VAT obligations for businesses selling goods and supplying services to final consumers throughout the EU, allowing them to:

• register for VAT electronically in one single Member State for all the eligible sales of goods and services to customers located in the other Member States;
• declare the VAT due on all these sales of goods and services in a single electronic VAT OSS return and make a single payment of the declared VAT;
• work with the tax administration of the Member State in which they are registered for the OSS, and in one language, even though their sales are EU-wide.

The IOSS enables B2C distance selling suppliers of goods of up to EUR 150 delivered directly to customers from a third country to charge the VAT of the destination country. In this case, the good is exempt from import VAT.

Other taxes

Excise duties

Excise duties are regulated by the Excise Duty Act. Excise duties are payable on excise products produced in the territory of Slovenia or introduced from the territory of other EU member states, or on excise products imported into the EU. Excise products are alcohol and alcoholic beverages, tobacco products, energy products and electricity released for consumption in the territory of Slovenia. The person liable to pay excise duty is the producer or the importer of the excise product, or a person that supplies excise goods from another EU member state.

Excise duty is paid for tobacco products as a percentage of the market price value of the excise product and a fixed amount for a certain amount of product (for example, a percentage of market price plus a fixed amount for 1,000 cigarettes), for energy products and electricity in a fixed amount for a certain amount of product (for energy products the unit depends on the type of product, for example kilograms for LPG; litres for petrol, gas oil; megawatt hours for natural gas and electricity; gigajoule of caloric value for coal, coke and lignite) and for alcohol and alcoholic beverages (in a fixed amount per hectolitre for wine, sparkling wine and fermented beverages intermediate products; and in a fixed amount on the percentage volume of alcohol per hectolitre for beer and ethyl alcohol).

Customs duties

Customs duties are levied on goods imported into the EU customs territory from other countries. The rates of duty are laid down in the Common Customs Tariff and applied in accordance with the EU’s common customs legislation.

Property tax

Property tax is regulated by the Civil Tax Act. Property tax is levied on buildings and parts of buildings, including apartments, garages and second homes. The taxpayer is an 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 range from 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 property tax include buildings of less than 160 square metres; buildings used for agricultural purposes; business premises used by the owner or user for business activity; and cultural or historical monuments.

In addition, there is a temporary exemption for 10 years for taxpayers who own a newly constructed building or repaired or renovated buildings if the value of these buildings has increased by more than 50% as a result of the renovation. 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.

Tax on transfers of immovable property

Taxation on transfers of immovable property is regulated by the Real Property Transaction Tax Act. The tax is paid on real property transactions and on the establishment and transfer or letting out the right of superficies for consideration according to the act governing property relations. A real property transaction is any transfer of title to property for consideration (hereinafter referred to as a transfer of property).

A taxable person is the seller of the real property unless it is agreed that the buyer is to pay the tax.

The tax is payable at the rate of 2% of the tax base. The tax base is the selling price of the real property.

The transfer of a title to property for which VAT has already been charged is not considered a transfer of property. The establishment or transfer of the right of superficies for which value-added tax has already been paid is not subject to this tax.

The tax is not charged on the:

• transfer of property to diplomatic or consular missions accredited in Slovenia in the case of reciprocity, and to international organisations if so stipulated by international treaties binding on Slovenia;
• transfer of property due to expropriation;
• transfer of property possessing the status of a cultural monument;
• transfer of agricultural land in the framework of land consolidation and other agrarian operations under the regulations on agricultural land;
• transfer of property in compulsory collection proceedings of mandatory levies;
• transfer of property in the division of property between spouses and cohabiting partners on the termination of or during a marriage or a registered same-sex civil partnership;
• transfer of property on the rescission of a property transfer contract;
• transfer of property in the division of real property between partners or shareholders in winding-up proceedings;
• transfer of property within the framework of financial transformations as defined in the Companies Act; and
• transfer of property as a non-cash contribution on the establishment of a legal entity or its capital increase.

Charge for the use of building land

A charge for the use of building land is levied on vacant and constructed building land possessed by legal persons and individuals and is regulated by the Construction Land Act. The charge is set by local communities for vacant building land based on the area of building land planned for building and for constructed building land based on the useful area of the residential house or business premises thereon.

Exemptions are set for land and buildings used by the embassies and international organisations, for temporary or new buildings or apartments for 5 years, there is a partial or full exemption for people with low incomes, building land planned for public infrastructure (health, social security, schools, culture, science, sports and public and the public administration etc.) and developed building land under public infrastructure.

Motor vehicle tax

Motor vehicle tax is regulated by the Motor Vehicles Tax Act. The tax is paid for passenger motor vehicles camping vehicles, motorcycles, three-wheel vehicles and quadricycles put into circulation in Slovenia for the first time or they are registered in the Republic of Slovenia for the first time; imports and acquisitions from other EU member states are also taxed. The tax amount is determined on a progressive scale, depending on the CO2 emission, EURO emission standard and engine power . Tax rates are higher for vehicles that use diesel fuel. The amount of tax for exclusively electrical vehicles and other vehicles without CO2 emissions is EUR 0.

Certain categories of vehicles are excluded from the tax (among others, vehicles acquired for the transport of disabled people or families with three or more children; vehicles intended for official use by diplomatic representations and international organisations and their staff; old-timers and sport vehicles not intended for road use etc.).

Tax is also not paid on vehicles exported or supplied to another EU member state before the first registration; temporarily imported vehicles and vehicles introduced to Slovenia from another EU member state if certain conditions are met. If a vehicle is exported or moved to another EU member state, the proportional part of the tax paid can be reimbursed.

Circulation tax

According to the Motor Vehicle Charges Act, an annual fee on the use of motor vehicles is paid for the use of motor vehicles registered in Slovenia. The tax amount depends on the type of vehicle. Certain categories of vehicles are exempted from the tax.

Water vessel tax

Water vessel tax is regulated by the Act on the Taxation of Water Vessels. Tax is levied on vessels longer than 5 metres registered in Slovenia, registered in other countries or not registered anywhere but owned by Slovenian residents. The taxpayers are the owners. Tax is levied for the calendar year, based on the length of the vessels and their engine power.

Exemptions apply to: vessels used for carrying out business activities, those used by the Police, Customs Administration, Army, the Ministry of the Environment and Spatial Planning, and the Navigation Administration; vessels with the status of a museum specimen; vessels for sports activities; vessels for the official needs of consular and diplomatic missions and international organisations according to international agreements.

An additional tax that is also based on the length of a vessel and its engine power is paid according to the Fiscal Balance Act.

Inheritance and gift tax

The taxation of gifts and inheritance is regulated by the Inheritance and Gift Taxation Act. The subject of the tax is property which a natural person or legal person of private law acquires from a natural or legal person as an inheritance or a gift and which is not deemed income according to the law governing personal or corporate income tax.

The tax rate amounts are between 5% and 39% depending on the value of the property and line of succession. Tax relief applies to inheritance and gifts to persons in the first line of succession and inheritance and gifts with a value of up to EUR 5,000.

Environmentally-oriented taxes

Taxes are levied on the pollution of air with carbon dioxide emissions (CO2 tax), the use of lubricating oils and fluids, landfilling with scrap pneumatic tyres, landfilling with scrap packaging, landfilling with waste electrical and electronic equipment, environmental pollution due to the use of volatile organic compounds, environmental pollution caused by waste water discharge and on environmental pollution caused by waste disposal.

Tax on insurance services

Taxation of insurance services is regulated by the Insurance Contracts Tax Act. The tax is paid by insurance companies and other legal persons conducting insurance business in the territory of Slovenia. The tax base is the premium or contribution paid on the basis of a concluded insurance contract.

The tax is payable at the rate of 8.5% of the tax base.

The tax is not charged on:

• compulsory contributions for pension, disability and health insurance;
• property (accident and health) and life insurances where the insurance period is not shorter than 10 years (if the insurance contract expires before the end of the 10-year period the tax shall be charged and paid);
• insurance which covers risk outside the territory of the Republic of Slovenia; and
• reinsurance.

Tax on financial services

The taxation of financial services is regulated by the Financial Services Tax Act. The tax is paid by bank and saving companies and other legal persons conducting payment services (including companies which submit a payment invoice) and services of insurance agents in Slovenia. The tax base is the compensation or contribution received on the basis of a concluded finance service. The tax is payable at the rate of 8.5% of the tax base.

The tax is not charged on:

• financial services taxable under VAT regulations;
• financial services taxable under insurance tax regulations;
• financial services which are performed by the Central Bank of Slovenia;
• financial services which are performed by or on behalf of the European Financial Stability Facility;
• financial services which are performed by or on behalf of an international financial institution set up by two or more EU member states in order to provide financial assistance to its members experiencing financing problems;
• financial services which are performed by or on behalf of the European Central Bank, the European Investment Bank or other bodies set up by the European Union;
• financial services which are performed by or on behalf of international organisations and bodies; and
• financial services performed for diplomatic missions and consular posts of foreign states.

Tax on gambling and concession fees

Gambling taxes and concession fees are regulated by the Tax on Gaming Act. The taxable persons are the operators of conventional games of chance (lotteries, raffles, scratch lotteries, bingo, betting and similar games) and the operators of special games of chance (casino games organised in either casinos or slot-machine salons). The tax base is the gross gaming revenue. The tax is payable at the rate of 5% and 18% of the tax base. An additional concession fee applies.

Tax on lottery tickets

According to the Tax on Lottery Tickets, the tax on lottery tickets is paid by the organisers of conventional games of chance with a state concession. The tax base is the selling price of the lottery ticket (excluding the tax on lottery tickets). The tax rate is 10% of the tax base.

Tax on winnings from conventional games of chance

Tax on winnings from conventional games of chance is regulated by the Taxation on Prizes from the Classical Games of Chance Act. Winnings from lotteries, raffles, scratch lotteries, bingo, betting and similar games of chance organised in Slovenia are subject to a 15% tax if the prize exceeds EUR 300. The gross principle is used in the taxation of winnings. No deductions are allowed. The tax is withheld by the gaming operator.