Taxation in Slovenia
Taxation in SloveniaUpdated on Monday 27th February 2023
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The tax system in Slovenia is comprised by a set of taxes that are created by the administration of the country with the purpose of achieving its objectives (fiscal, economic and social). The taxation system in Slovenia is also an important part of the economic and socio-political system, along with the social security contributions, customs systems and other charges, that form the fiscal system of Slovenia. All persons have taxation obligations, including those interested in immigration to Slovenia.
Our team of Slovenian lawyers can advise local and foreign entities (both natural persons and corporate bodies) on the tax registration requirements and can present the Slovenian tax system applicable to a particular case. Companies can also benefit from a full representation when registering with the local tax authorities, but also on the tax compliance that needs to be concluded during a financial year.
What are the main Slovenian taxes?
The Slovenian taxation system is comprised of a set of basic taxes which are applied to natural persons, as well as to those developing commercial activities on the territory of the country. Taxes in Slovenia are collected by the Financial Administration of the Republic of Slovenia and they consist in the following types of taxes:
- value added tax, imposed at the standard rate of 22%, and the corporate income tax, available at a rate of 19%;
- personal income taxes, applied on a progressive system which varies depending on the level of income of a Slovenian tax resident;
- the social security contributions, which are divided between the employer and the employee;
- capital gains tax, imposed on a progressive system (it ranges between 0% to 25%);
- in the case of those involved in trading activities, the excise duty and the customs duty will be applied.
Corporate tax in Slovenia
The corporate tax must be paid by legal entities that obtain profit from the registered activity and are headquartered in Slovenia or practice the registered activity on the territory of Slovenia. The current corporate tax in Slovenia is applicable at the rate of 19% on the company’s profit and this is also applicable to businesses which carry their operations in this country through a permanent establishment.
Taxable period of corporate tax in Slovenia
The taxable period is the span of time in which all profits earned are taxed. The regular tax period is the calendar year. All income earned during the calendar year are subjected to the 19% Slovenian corporate tax and a tax return must be submitted by the end of March of the following year. Corporations also have an option of using a different tax period but it must not exceed twelve months. The option must be made known to the tax authorities and cannot be changed for three consecutive years. Our experts in company formation in Slovenia can inform you further about the tax period for your corporation.
Payment of corporate tax in Slovenia
Corporate tax in Slovenia is paid in advance in either monthly installments or quarterly payments, depending if the amount exceeds 400 euros. The determined amount to be paid is based on the previous year’s calculations. The final payment for corporate tax in Slovenia must be made within thirty days after the submission of the tax return. The submission of a tax return is very important because it will be the basis for determining whether correct taxes are paid or not. Also, tax inspection can only be done within five years after the submission of the tax return. Make sure that your company in Slovenia is paying the right amount of taxes.
The following video offers a short presentation on the taxation system available in Slovenia:
Are there any exemptions of the payment of the Slovenian corporate tax?
There is an exemption on the payment of the corporate tax and this is available in the case of charitable organizations, associations and other similar entities. It is important to know that other Slovenian entities can be exempted from paying the corporate tax on income; thus, businessmen opening companies in Slovenia registered as insurance companies will not be required to pay this tax. The same regulation also applies to investment funds registered in this country.
At the same time, companies registered in specific economic sectors can request to be exempted from the payment of the corporate tax; instead, they will pay a tax known as the tonnage tax. This can be applied in the case of Slovenian companies developing maritime transportation activities.
In order to obtain the exemption from paying the corporate tax, companies are required to notify the competent authorities. The tonnage tax was introduced in Slovenia starting with 2008 and in order to benefit from this option, the maritime company has to be registered and managed from here; our Slovenian lawyers can offer more details on the applocable law.
An exemption on the corporate income tax is also applicable in the case of Slovenian sole traders, but this is given by the fact that this structure is imposed with the personal income tax, as, from a legal point of view, there is no distinction between the company and its owner. Our law firm in Slovenia can offer an extensive presentation on the characteristics of a sole trader and can also represent natural persons in registering this entity.
When should a Slovenian company file for tax returns?
The tax returns of a Slovenian company have to be registered with the local tax office by 31st of March of the next year following the previous financial year. The tax returns in Slovenia can be filed with the online platform, eTax System, but in order to do so, the company must obtain a digital certificate.
The tax base is the profit after tax return. The tax is levied on an annual basis and currently stands at 19%. The taxable person shall pay advance tax in the current year in monthly or quarterly installments in proportion to the amount of the tax base after the last tax return. The tax relief reduces the tax base and tax liability.
Personal income tax in Slovenia
Another part of the taxation in Slovenia is the personal income tax. This tax is paid by a natural person resident in the Republic of Slovenia, with personal incomes during a calendar year. Individuals who are not residents of Slovenia are also eligible for paying income tax in case they have continuously produced incomes for at least six months on Slovenian territory. The income tax in Slovenia is paid on a progressive tax scale of 16%, 27%, 35%, 39% and 50%. Foreigners will also be required to pay this tax, in certain sitatuons, which can be prested by our immigration lawyers in Slovenia.
The tax system for the taxation of personal income was recently modified, by creating five taxation thresholds. The system with five types of tax rates became applicable starting with January 2017. The 16% rate is applicable for an yearly income of maximum EUR 8,021.34, while an income between this value and a maximum of EUR 20,400 is taxed with a rate of 27%.
An income in Slovenia ranging between EUR 20,400 and EUR 48,000 is imposed with a tax of 34%; in the case of persons obtaining an income between EUR 48,000 and EUR 70,907.20, the tax is applied at a rate of 39%. Any income above EUR 70,907.20 is taxed at a tax rate of 50%. Please take these into consideration for immigration to Slovenia on a long-term basis.
Employers must also pay the employees' contributions for health and injury at work, contributions for pensions and disability insurances, contributions for parenthood and employment. The employer pays 22.10% (calculated in accordance to the employee's wage) for these contributions, while from the employee’s wage is withdrawn an amount of 16,10%.
VAT in Slovenia
Another important part of the taxation in Slovenia is the value added tax or VAT, which is payable at the place and time where goods or services were provided. The tax rate in Slovenia is currently imposed at a rate of 22% and the reduced rate of 9.5% is applicable for certain goods or services. The exports from Slovenia are exempted from VAT payment. The VAT number is associated with the EORI number issued for any economic operators importing or exporting goods here.
Dividend tax in Slovenia
The dividend consists in payment of the participation in the profits of the company on the basis of shareholding. The dividend tax in Slovenia is calculated at a tax rate of 15%. The dividend tax is charged to the company/legal person that pays the dividend. When the dividends are reinvested in the same company or in other company with the purpose of creating jobs or for strengthening the company's potential on the market, the divided tax is returned by filling a certain application.
Are there any exemptions of the withholding tax on dividends in Slovenia?
According to the Slovenian Corporate Income Tax Act (CITA) the tax on dividends sourced by a Slovenian company is not withheld if the dividends are paid to a business which is a non-resident of Slovenia, under certain conditions: the company is a tax resident of another EU (European Union) or EEA (European Economic Area) member state, its taxes are withheld in the country of residence or if it deducts the dividends received in Slovenia from the tax base in its country of residence.
This exemption from the withholding tax on dividends is extended to non-resident pension funds, insurance companies that are allowed to provide a pension plan and investment funds. These business entities must satisfy a number of provisions in order to benefit from the exemption and our team of consultants in company registration in Slovenia may offer in-depth advice on this matter.
In order to be qualified for the exemption, the above mentioned types of companies have to be a resident of another EU or EEA member state and prove that the exemption does not represent a mechanism to avoid taxation in the country of origin. The withholding tax applies to all dividends received by a non-resident in relation to its Slovenian company (permanent establishment).
Please note that in the case of companies operating in Slovenia in the shipping sector, the taxation is concluded following a special tax regime. In this sense, businessmen who want to open a company in Slovenia in this sector should know that the taxation regarding the corporate income tax and the distribution of the dividends is concluded following the regulations of the CITA, but the tax base is completed following the regulations prescribed by the Tonnage Tax Act.
When is it necessary to submit the dividend tax returns in Slovenia?
According to the Slovenian legislation, the tax returns on dividends have to be submitted on a quarterly basis. An exemption in this case is applicable only in the banking sector, where such documents have to be submitted by the end of the month of February. It is important to know that if the tax returns are not submitted when requested, penalties can be imposed.
Tax for real estate in Slovenia
The tax for real estate properties is another fiscal obligation included in the taxation in Slovenia. This tax must be paid by any natural or legal person who is recorded in the Land Register as an owner of a real estate property. The tax obligation is available for foreigners as well and you can find out more on this from our immigration lawyers in Slovenia. The tax rates are as follows:
- for buildings or parts of buildings including the land on which they stand the current tax rate is of 0.10% in the case of residential properties;
- the tax rate for premises created for the purpose of recreation varies between 0.20% to 1.50%;
- in the case of commercial properties, the applicable real estate tax ranges between 0.15% to 1.25%;
- the real estate tax system also includes the payment of the capital gains obtained from the sale of properties in Slovenia.
Does Slovenia provide any tax reliefs?
Yes, businessmen who want to invest in Slovenia can benefit from tax reliefs, provided that they invest in specific fields of activity. The tax reliefs are available in the case of investments concluded in the field or research and development, the employment of persons included in specific social categories, starting an apprenticeship program addressed to young persons such as students, but they are also available for donations.
For more details, you can contact our law firm in Slovenia, where investors can obtain an in-depth presentation on the Slovenian tax system; our lawyers are prepared to provide professional consultancy services for any matter related to the taxation of a legal entity in this country and may also advise businessmen on the tax system addressed to sole traders registered here, which are entities that must comply with the personal taxation system.
As person who is not a resident of Slovenia, you are not liable to taxation in this country, unless you have certain tax connections to this country such as, let’s say, owning a property here that is for rental, while you live somewhere else.
Once you start the process for immigration to Slovenia on a long-term basis, then tax obligations will appear. According to the law, this can happen once a person obtains a residency permit.
A residence permit is necessary for a foreigner who stays here a period of minimum 90 days in a 180 days period. However, tax residency in Slovenia can appear when one stays here a total of 183 days per year (or 6 months in 12 months in a financial year).
Tax residency will be maintained as long as the person lives here, including when the person will apply for Slovenian citizenship.
Residency in Slovenia will generally equate with tax residency in Slovenia, unless the person does not obtain any type of income. For instance, a foreigner can arrive here to enroll in long-term tertiary studies, which is non-lucrative activity.
Therefore, the foreigner will be a resident, but not a tax resident, since him or her does not obtain an income deriving from Slovenia.