Overview of selected tax rates

Source: Ministry of finance of Slovenia

Sick Leave entitlements

Absence from Work due to Health Reasons A worker shall be entitled to absence from work in cases of a temporary incapacity for work due to a disease or injury and in other cases in accordance with the regulations on health insurance.
The employer shall pay wage compensation from his own funds in cases of the worker’s incapacity to work due to a disease or injury which is not related to work for the period up to 30 working days for individual absence from work but not more than for 120 working days in a calendar year. In cases of a worker’s incapacity to work due to an occupational disease or injury at work, the employer shall pay the worker wage compensation from own funds for the period up to 30 working days for each individual absence from work.
In case of longer absence from work, the employer shall pay wage compensation to the debit of health insurance.

Corporate Income Tax

The current corporate income tax rate of 22% of the taxable base will be trimmed to 21% in 2009 and 20% of the taxable base by 2010.

Taxable persons:

• All legal persons carrying out commercial activities and having their registered offices in Slovenia or having their place of effective management in Slovenia (partnerships and other corporate forms, investment funds, banks, insurance companies, co-operative enterprises, public enterprises and other legal persons).
• Non-resident legal persons (i.e. not having their registered office in Slovenia) are subject to corporate income tax to the extent that income is the result of performing a business activity in Slovenia.
• If a permanent operating unit of a foreign entity is regulated differently in an agreement on avoidance of double taxation, the provisions of that agreement apply.

Tax allowances for:

a) Capital investments

• a deduction from the tax base of 20% of the investment in research and development.
• The amount of the additional deduction may be increased to 30-40% depending on the regional relief scheme.

b) Implementation of practical work during professional education

For taxable persons that employ apprentice, pupil or student according to the didactic contract for implementation of practical work in professional education.

• a deduction from the tax base of the wages paid to these persons, but no more than 20% of average monthly wages of employees in Slovenia

c) Employing disabled people

For taxable persons who employ disabled persons the taxable base is lowered by an amount equal to 50% of the gross wages paid to the disabled persons. For taxable persons who employ disabled persons with a disability of 100% and deaf and dumb persons the taxable base is lowered by an amount equal to 70% of the wages paid to these persons.

d) Voluntary supplementary pension insurance

• Up to 24% of the compulsory contributions for pension and disability insurance for insured employees, but no more than € 2,390 annually per employee.

e) Donations

• Up to an amount equivalent to 0.3% of the taxable revenue for amounts paid in cash and in kind for humanitarian, disabled, charitable, scientific, educational, ecological and religious purposes, social security and health care to Slovenian residents.

Above mentioned relieves are mutually exclusive.

• Additional reduction up to an amount equivalent to 0.2% of the taxable revenue for amounts paid in cash and in kind for voluntary associations and cultural purposes, founded for protection against natural and other accidents that work in public interest, namely only for donations to residents of Slovenia and European Union.
• Additional reduction up to an amount of 3 average monthly wages per employee, employed by taxable persons for amounts paid in cash and in kind for political parties

 

Personal income tax

Personal income tax is levied on six categories of income:

• income from employment,
• business income,
• income from agriculture,
• income from property (rental income, royalties, interest and dividends),
• capital gains
• other income worldwide (income derived in Slovenia as well as abroad).

Firstly, an individual’s yearly income is computed separately and than aggregated. The total amount is taxed according to an annual tax schedule containing five income tax brackets and the following progressive tax rates: 16%, 27% and 41%.

The amount of tax payable is estimated and paid monthly. The annual tax return must be completed, signed by the taxpayer and sent to the local tax administrative office by the 31st of March of the following year. Any over- or underpayment is then charged or refunded.

Non-residents are liable to personal income tax on income derived in Slovenia. An individual, regardless of this nationality, is a resident in Slovenia for personal income tax purposes if he has permanent residence or if he is present more than 183 days in a taxable year in Slovenia.

Profit repatriation tax

This is the rate of tax which investors must pay if they wish to pay profits to their owners in the host country or the investor country. Where profits are transferred abroad the rate is lowered in line with bilateral agreements on the avoidance of double taxation. Slovenia’s rate of taxation on the repatriation of profits is 25% where profits are transferred abroad, 0% when transferred to EU countries.

Capital gains tax

A separate return covering the preceding year must be filed before 28 February even though capital gains tax in relation to the sale of property, securities and shares is calculated and paid together with personal income tax. Income tax on interest, dividends and capital gains is paid according to a flat income tax rate:

• Interest: 20%
• Dividends: 20%
• Capital gains:
  20% for a holding period of up to 5 years,
  15% from 5 to 10 years,
  10% from 10 to 15 years,
    5% from 15 to 20 years,
    0% from 20 years and longer.

Capital gains tax is payable on the difference between the selling price and the purchase price.

VAT

All persons who independently perform any activity in any place are liable for VAT irrespective of the purpose or result of the pursuit of the activity. If the value of supplies within the period of the last 12 months exceeds the threshold of EUR 22,000, registration as a VAT taxable person is obligatory. VAT is accounted and paid on goods supplied and services performed by a taxable person as part of the pursuit of his activity in the territory of the Republic of Slovenia for payment, and on goods imported into Slovenia. The VAT Act lays down two rates of VAT: a standard rate of 20% and a reduced rate of 8.5%. The 8.5% VAT rate applies to items such as food (including beverages other than alcoholic beverages), medicines, medical equipment, books, entrance fees, housing, copyright, etc.

Immovable Property Transfer Tax

This tax is levied on the transfer of immovable property if VAT has not been charged on such property. The rate of 2% is applied to the market value of immovable property transferred. Usually, the taxpayer is the seller of the immovable property; however it is common, that the tax burden is already calculated in the price. Transfers of agricultural land are exempted from this tax burden. Details of the transfer have to be submitted to the local tax administrative within 15 days of the contract date.

Depreciation allowances

The depreciation allowance on buildings and equipment is quite favourable. Depreciation and amortization may not exceed the level arrived at using straight-line depreciation and the maximum annual depreciation rates shown in table.

Maximum annual depreciation rates (%)

Source: Republic of Slovenia, National Assembly; Corporation Tax Act