VAT Registration in Slovenia - 2021 Guide
VAT Registration in SloveniaUpdated on Thursday 01st April 2021
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The value added tax or VAT in Slovenia is ranked among the taxes on consumption and it is considered an indirect tax on goods and services, which is paid at each stage of production and distribution chain. In Slovenia, there are two types of VAT rates, a regular one of 22% and reduced rates, one of them applied at a rate of 9,5% for certain goods and services, which will also be presented in the article below.
However, it is important to know that Slovenia also applies other reduced VAT rates and companies can be charged with the respective rates if they trade the goods and services included in these categories. With regards to the VAT registration in Slovenia, the taxpayers should know that the following are applicable, as per the tax legislation available in this country:
- the standard VAT rate, of 22%, is charged to most of the goods and services traded on the Slovenian market;
- the reduced VAT rate, of 9,5%, is applicable to a wide range of goods, such as pharmaceutical products, foodstuffs or books and to various services, such as the hotel accommodation or restaurant services;
- another reduced VAT available here is charged at a rate of 5% and it is available only for the sale of e-books;
- Slovenia applies a VAT rate of 0%, which is applicable only for intra-community and international transportation (which does not include road transportation);
- in the case of businesses registered in the EU which sell goods on the internet, the procedure for VAT registration in Slovenia is mandatory once the sale reaches a threshold of EUR 35,000 (calculated on the annual sales).
Our team of lawyers in Slovenia can assist businessmen with in-depth information on the Slovenian VAT rates and can also provide legal representation for local businesses that have to register for VAT purposes, a procedure which requires the issuance of a VAT number. Our lawyers can also offer assistance on the VAT returns that have to be submitted with the local tax institutions.
Who pays VAT in Slovenia in 2021?
VAT in Slovenia is payable by any taxable person making a taxable supply of goods or services, except in cases in which, in accordance with the VAT Act 1, the VAT is charged to another person. The Slovenian VAT is also payable in the moment when it is introduced on an invoice.
The taxable person shall pay the VAT in Slovenia to the state budget no later than the last working day of the month following the expiration of the tax period, unless otherwise provided by law. In Slovenia, a taxable person identified for VAT purposes must have obtained a VAT identification number and must have fulfilled at least one of the conditions:
- has a taxable turnover exceeding EUR 50,000 in the last 12 months;
- is a taxpayer that supplies goods and services in the context of basic agricultural and forestry activities, as defined by the Income Tax Regulations, with an amount of EUR 7,500 as total income on these activities in the context of rural household for the last calendar year;
- is a taxable or a non-taxable person that has acquired goods within the EU in a total amount that has exceeded EUR 10,000 during the current calendar year;
- is a taxable person who is established in Slovenia, but provides services on the territory of another Member State in which he/she is a VAT payer in accordance with the Article no. 196 of Directive 2006/112/EC;
- is a foreign online business selling goods on the internet in Slovenia, with a value of EUR 35,000 per year.
The VAT registration is also necessary in the situation in which the entity is a taxable person within the territory of Slovenia and has made an acquisition of goods due to certain transactions that are related to the provision of activities outside this country; our team of Slovenian lawyers can provide more details on the legislation referring to this matter.
Please note that the local legislation also allows taxable entities to conclude the procedure for VAT registration in Slovenia prior to reaching the thresholds that are associated with their given category. The procedure can be completed on a voluntary basis, through an application that can be submitted with the tax authorities even from the moment when the Slovenian company was incorporated here.
VAT exemptions in Slovenia in 2021
There are also certain categories that are not charged with VAT in Slovenia, for example government bodies, organizations, local unions as well as other public entities that perform an activity or transaction as a public authority, even if they collect fees, levies and other charges and payments in connection with these activities or transactions.
There are also other categories that are exempted from VAT registration in Slovenia, such as: certain activities in the public interest (health, social care, education, religious, sport and physical education, culture, the universal postal service), insurance and reinsurance transactions, leasing of real estate, financial services, supply of stamps and postage stamps, supply of buildings or parts of buildings and land other than new construction, the supply of gold to the Bank of Slovenia.
Due to the harsh effects the economy had to suffer as a consequence of the measures taken to reduce the effects of the Covid-19 pandemics, the Slovenian government has provided various tax reliefs or deductions to local businesses. Amongst them, throughout 2020 the local government provided the right to submit VAT returns later than the deadline established under the local law, without imposing penalties or charges for the delay. In 2021 and 2022, companies can benefit from a special VAT payment plan.
Reduced VAT rate in Slovenia
The reduced rate of VAT (9,5%) is applied for certain categories of goods and services, such as: food, live animals, seeds, plants and materials intended for food preparation, water supply, medicines, including birth control products and products for hygienic protection. it also applies to medical equipment, aids and other assets, which are intended to alleviate or treat an injury or handicap, intended only for personal use. The reduced VAT rate is available for the following as well:
- the carriage of passengers and their personal baggage;
- books, brochures, leaflets and similar printed products, newspapers and periodicals, other than material which is wholly or predominantly devoted to advertising;
- taxes for exhibitions, theaters, cinema and music events, parks, zoos and similar cultural and sporting events;
- services provided by copyright writers and composers and performing artists services;
- housing and other facilities intended for permanent residence, as well as parts of these structures, if they are part of social policy, including construction, renovation and repair;
- animals for fattening, seeds, seedlings, fertilizers, plant protection products, biotic plant protection products and services, which are intended exclusively for agricultural use;
- forestry and fisheries, accommodation, domestic care services (such as home help and care of young, elderly, sick or disabled) and it can also refer to other services or products provided by the law.
Every taxable person identified for VAT purposes in Slovenia is entitled to benefit from VAT deduction on the basis of certain rulings. Deductible VAT are those amounts of tax that are recognized in the accounts on the purchase of goods or services. The right to deduct VAT is given to a taxable person only for the purchase of goods and services which are used for the purposes of his taxable transactions and are legally exempted specific transactions.
Does a foreign company need a Slovenian VAT number?
Yes, according to the tax legislation applicable in Slovenia, foreign companies have to obtain a Slovenian VAT number if they perform business activities that are charged with the VAT on the country’s territory. Our team of Slovenian lawyers can advise businessmen on how to obtain a local VAT number as a foreign entity; a short presentation on this matter can be read below:
- the requirement is available for foreign online businesses selling goods on the internet to the Slovenian citizens;
- the VAT registration is compulsory in this case when the value of the goods sold on the Slovenian market is of EUR 35,000 per year;
- as a non-resident company in Slovenia, the legal entity has to apply for a non-resident tax ID number;
- the registration can be done by submitting specific company documents;
- an extract from the Trade Registry where the company was incorporated is needed;
- the passport copies of the persons representing the company are also required.
The Slovenian VAT number is comprised on the country code SI, designating Slovenia, followed by a code comprised of 8 digits. The company applying for a VAT number in Slovenia has to submit the necessary papers with at least 15 days prior to starting its business activities in this country. The structure of the VAT number resembles with the one of the Slovenian EORI number.
In the case of EU businesses who need a VAT number in Slovenia the local law does not prescribe the obligation to appoint a local fiscal representative, but it is recommended to have a local agent who can represent the company in relation with the local tax institutions (for matters such as tax inspections or the verification of the company’s books). However, non-EU companies are obliged to have a fiscal representative in this country.
What are the obligations when submitting VAT returns in Slovenia?
Once the company is issued with the VAT number in Slovenia, it can start trading. This leads to the obligation of submitting VAT returns following the applicable accounting regulations and this has to be done based on the nature of the VAT payer (natural person or legal entity).
The VAT returns have to be completed as requested by the Financial Administration of Slovenia, the main institution which handles tax matters in this country. The tax returns in Slovenia can be submitted on the online platform of the institution, free of charge.
Provided that the VAT payers did not submit in due time the required documents, they can face various penalties. The penalties can range from EUR 2,000 to EUR 125,000, regardless of the nature of the VAT payer (natural person, legal entity, sole trader) if the documents were not completed as required by the tax law available here or if they were not submitted in the given amount of time. Please note that the Slovenian tax law also allows local institutions to charge interest for late payments, which is imposed at 0,0247% on the due amount; the interest is calculated as a daily rate.
The VAT registration in Slovenia will create the obligation to pay taxes accordingly. In this sense, the local legislation requires taxable entities to pay VAT on the net amount obtained in a financial year. This has to be calculated when submitting the VAT returns. Our team of lawyers in Slovenia can present more information on the tax assessment procedures and other accounting requirements imposed to businesses or natural persons.
In Slovenia, the tax returns can be submitted on a monthly or a quarterly basis. The manner in which a taxable entity must submit the VAT returns is determined based on the yearly taxable amount. Thus, in the case of those that have an yearly revenue of up to EUR 210,000, the tax returns can be completed on a quarterly basis. Those with revenues of more than EUR 210,000 should prepare monthly tax returns.
When can one be charged for VAT in Slovenia?
Foreign businesses interested in trading in Slovenia can become liable for the payment of this tax in a wide category of situations. Those who are not sure if their business activity has to be charged for VAT in Slovenia can request legal assistance on this matter from our team of Slovenian lawyers. However, some of the most common scenarios are presented below:
- businesses importing goods into Slovenia from outside the EU community;
- trading goods in Slovenia (purchasing and selling various products on the country’s territory);
- the sale of goods from Slovenia to buyers from outside the country;
- purchasing goods in Slovenia from another EU member state;
- organizing events in Slovenia where the participants have to pay an admission fee.
The tax can also be imposed when storing goods in Slovenia which are kept for the purpose of being sold, distributed on the local market or which are held as consignment. Our law firm in Slovenia can provide additional details on other situations that can be liable to the payment of this tax.
It is necessary to know that there are several categories of goods which do not allow a VAT refund; our team of Slovenian lawyers can present the detailed list of the goods that are included into this category and can also present what types of businesses are allowed to claim VAT refunds in Slovenia.
As a general rule, the VAT refunds are available for businesses located outside the EU, but this principle is available as long as the tax authorities in the respective non-EU countries have prescribed similar regulations for the VAT refund applicable to businesses incorporated in Slovenia.
Are there any VAT requirements for natural persons in Slovenia?
Yes, natural persons can also be charged with the VAT if they develop taxable activities that fall under the regulations of the VAT law. This is also applicable to foreigners living in Slovenia. Thus, it is necessary to know that a foreign natural person can become a taxable entity in Slovenia if he or she will reside in this country for a period longer than 183 days (calculated in a calendar year).
When this time period is met, the person has the legal obligation to fill in a questionnaire with the local tax authorities, which will determine, based on the information provided, if the person is liable for taxation in this country and for which types of taxes. The tax authorities will also determine if the person’s tax residence can be established in Slovenia and if so, the person should announce the tax authorities in the country of residence on the modification.
This procedure should be completed with the purpose of avoiding the need to pay the same taxes for the same income in two different countries. The procedures can depend on the country of residence, as different tax agreements can be signed; our law firm in Slovenia can offer an extensive presentation on the tax agreements that were signed by the local authorities.
Natural persons who have to register for VAT in Slovenia must first obtain a VAT identification number. The request for the issuance of a VAT number in Slovenia can be done by using the online platform of the Slovenian tax institutions (the eTax system or the e-Vem portals are available for this) or by going in person to the tax office located in the region where the person resides.
The Act no.1 on VAT sets out the conditions for the exercise of the right to deduct VAT, the restrictions on this right, as well as obligations and methods of correction. For more details, you may contact our law firm in Slovenia. Our team of Slovenian lawyers can provide any additional information on other aspects related to the payment of the VAT.