Double tax treaties are instruments chosen by the governments in order to attract foreign capital. Their importance is proved by their long history, these treaties being signed for more than 30 years between the states.
Slovenia doesn’t have a developed network of treaties yet. So far, Slovenia has signed treaties of double taxation avoidance with: Albania, Austria, Belgium, Belarus, Bosnia and Herzegovina, Bulgaria, Canada, Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, India, Ireland, Israel, Italy, Latvia, Lithuania, Luxembourg, Macedonia, Malta, Moldova, Netherlands, Norway, People’s Republic of China, Poland, Portugal, Qatar, Republic of Korea, Romania, Russian federation, Serbia, Montenegro, Singapore, Slovak Republic, Spain, Sweden, Switzerland, Thailand, Turkey, Ukraine, Great Britain and Northern Ireland, United States of America. Other treaties are the ones signed with Armenia, Egypt and Kuwait.
Certain treaties are replaced by new protocols, such as the treaty with Federal Republic of Germany regarding the taxation of incomes and capital replaced by a protocol with Germany.
Regulations related to double taxation agreements in Slovenia
The double tax treaties signed in Slovenia are regulated by the Tax Procedure Act from 2005, Articles 260 and 262.
According to it, the taxation is made in the non-resident’s country of origin, if that country has signed a double tax treaty with Slovenia. The taxable profit is taxed with 17% in Slovenia. Other method would be through credit, when the profit is taxed in Slovenia, but a credit is granted in the treaty country of origin of the company’s owners.
The exemption is granted by delivering a completed form to the Slovak tax authorities. A new request must be issued for each payment of income. If the requester pays out taxes on profits regularly is possible for the tax authorities to approve the one time submission of documents.
Besides the corporate tax on profits, the withholding tax on dividends, interests and royalties is receiving certain exemptions or minimizations. The usual withholding tax on those is 15%.