General Information
Country Name: Slovenia
Currency: Euro (€) (EUR)
Primary Tax Authority: Financial Administration of the Republic of Slovenia (Finančna uprava Republike Slovenije – FURS)
Key Legislation:
- Corporate Income Tax Act 2006
- Personal Income Tax Act 2006
- Value Added Tax Act 1999
Fiscal Authority Allocation
Centralized Fiscal System:
Slovenia operates under a centralized tax system. All taxes, including income tax, VAT, and other duties, are collected and administered by the Financial Administration of the Republic of Slovenia (FURS). Local governments do not levy income taxes, but they collect property taxes and some minor fees.
Corporate Income Tax (CIT)
Standard Rate: 19%
Slovenia applies a flat corporate income tax rate of 19% to all resident companies, which are taxed on worldwide income. Non-resident companies are taxed on Slovenia-sourced income only.
Corporate Forms and Taxation:
- Limited Liability Company (Družba z omejeno odgovornostjo – d.o.o.): The most common corporate form, taxed at the standard 19% rate on distributed profits.
- Public Limited Company (Delniška družba – d.d.): Typically used by larger companies, also taxed at 19%.
- Branches of Foreign Companies: Taxed on Slovenia-sourced income at the same 19% rate.
Exemptions and Incentives:
- R&D Incentives: A 100% deduction on R&D-related expenses is available, encouraging investment in innovation.
- Tax Loss Carryforward: Tax losses can be carried forward indefinitely and offset against future taxable profits.
- Investment Deduction: Investments in certain sectors, such as technology and energy efficiency, may qualify for additional deductions.
Goods and Services Tax (GST) / Value-Added Tax (VAT)
Standard Rate: 22%
Slovenia applies a VAT rate of 22% to most goods and services. A reduced rate of 9.5% applies to specific goods and services, including food, medicines, and books.
Exemptions:
Healthcare, financial services, education, and certain social services are exempt from VAT. Exports are zero-rated.
Personal Income Tax (PIT)
Progressive Rates:
Slovenia applies a progressive personal income tax system with the following rates:
- Income up to €8,755: 16%
- Income between €8,756 and €25,750: 26%
- Income between €25,751 and €51,500: 33%
- Income between €51,501 and €74,160: 39%
- Income above €74,160: 50%
Dividends:
Dividends are taxed at a flat rate of 27.5%.
Additional Mandatory Contributions
Social Security Contributions:
Both employers and employees are required to contribute to Slovenia’s social security system, covering pensions, healthcare, and unemployment benefits.
- Employer Contribution: 16.1% of gross salary.
- Employee Contribution: 22.1% of gross salary.
Withholding Taxes
- Dividends: 27.5%
- Interest: 27.5%
- Royalties: 15%
These rates may be reduced under Slovenia’s double taxation agreements (DTAs).
Transfer Pricing Rules
Slovenia adheres to OECD transfer pricing guidelines, requiring related-party transactions to be conducted on an arm’s-length basis. Documentation is required for cross-border related-party transactions exceeding certain thresholds.
Special Tax Regimes
- Special Economic Zones (SEZs): Companies operating within designated SEZs may benefit from reduced CIT rates and other tax incentives aimed at encouraging investment in certain sectors.
- Start-Up Incentives: Slovenia offers tax incentives to start-ups, including tax holidays and simplified administrative procedures for companies in innovation-driven sectors.
Other Taxes
- Real Estate Tax: Levied on land and buildings at rates set by local municipalities, generally ranging between 0.1% and 1% of the property’s value.
- Capital Gains Tax: Capital gains are taxed at 27.5%, with the rate gradually decreasing if the asset has been held for over 5 years.
- Excise Duties: Excise duties apply to goods such as alcohol, tobacco, and energy products.
Double Taxation Agreements (DTAs)
Slovenia has signed over 55 double taxation agreements with countries around the world, including major partners such as Germany, France, and the United States. These treaties aim to prevent double taxation of income and provide reduced withholding tax rates on dividends, interest, and royalties.
Local Taxes
Although Slovenia’s tax system is centralized, local governments can levy certain taxes, such as property taxes and municipal fees. Local authorities receive a portion of income tax revenue to fund public services.
Compliance and Reporting
Annual Filing:
Corporate tax returns must be filed by March 31st of the following tax year. Personal income tax returns must be filed by April 30th. The tax year in Slovenia follows the calendar year.
Penalties for Late Filing:
Penalties for non-compliance or late filing include interest on overdue tax payments and fines. Penalties vary depending on the severity of the breach and the amount of unpaid taxes.
Recent Developments
Green Tax Initiatives:
Slovenia is focusing on promoting environmentally friendly policies, including tax incentives for investments in renewable energy, energy efficiency, and electric vehicles.
Digital Services Tax:
Slovenia is considering the introduction of a digital services tax to address revenue from global digital companies operating in the country, in line with broader EU discussions on the topic.
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