Slovenia: Business Environment

Company Tax

19%

Tax Rate For Foreign Companies

Slovenian tax residents are liable to pay corporate income tax on their worldwide income, whereas non-residents are only liable to taxation on Slovenia-source income.
A company is deemed to be resident in Slovenia if the entity has its registered seat or place of effective management located in the country.

Capital Gains Taxation

Capital gains are considered ordinary income and taxed at 19%. Gains arising from a transaction subject to the EU merger directive are exempt.
A portion equal to 47.5% of capital gains derived from the sale of shares are exempt if the shares represent a participation of at least 8% and have been held for more than six months, and at least one person is employed on a full-time basis during this period. Similarly, 50% of a loss arising from the disposal of such a shareholding would not be deductible for corporate income tax purposes.

Main Allowable Deductions and Tax Credits

Costs that occur prior to the entry of a legal entity into the court register may not be treated as tax-deductible, the same as for expenses that are not directly necessary for performing business activities or are not incurred as a consequence of business activity. In general, business expenses that are necessary to generate taxable revenues are fully tax-deductible.
Companies may deduct interest expense on loans from their owners or other associated parties up to a maximum of the amount calculated by using the prescribed interest rate published by the Ministry of Finance.
Certain provisions are only 50% tax-deductible when accrued, with the remaining 50% being treated as tax-deductible when the provision is utilised, as the provisions for warranties granted when selling products or providing services, reorganisations/redundancies, anticipated losses from onerous contracts, pensions, long-service bonuses, and severance payments on retirement. As from 1 January 2022 to 31 December 2026, provisions for pensions, for jubilee awards and for severance pay upon retirement shall be tax deductible 100% when formed for each individual tax period.
Entertainment costs are only 60% tax-deductible, those relating to the supervisory board are 50% tax-deductible.

The R&D incentive allows for a 100% deduction of the amount invested in internal R&D activities and the purchase of R&D services. The investment incentive allows for a 40% deduction of the amount invested in certain prescribed equipment and intangible assets, excluding investments in real estate property. Additionally, a special incentive was introduced as part of the post-COVID-19 recovery plan, which allows for a 40% deduction of investment into AI technology, cloud computing, green technology, etc. However, the combined deduction can be used up to the maximum of 63% of the actual tax base.

Bad debt provisions are only tax-deductible if the amount does not exceed the lower of: (i) the arithmetic mean of the bad debts written-off in the past three tax periods, under certain conditions specified in the tax law, and (ii) 1% of taxable revenues of the tax period.

Under certain conditions, a tax-deductible allowance for voluntary supplementary pension insurance may apply (of up to 24% of compulsory contributions for pension and disability insurance for insured employees, capped at EUR 2,819.01/year/employee).

Charitable donations made for humanitarian, disabled, charitable, scientific, educational, medical, sports, cultural, ecological, and religious purposes to residents of Slovenia or of EU or EEA member states are deductible, up to 0.3% of the taxable revenues, plus an additional allowance of 0.2% of the taxable revenues for payments made for cultural purposes and to voluntary organisations that work for the public interest to protect the public from natural and other disasters. As from 1 January 2022, another tax allowance for sport purposes of 3.8% shall be recognised for payments or equivalents to providers of the top sport program for investing in such sport.
Tax losses may be carried forward to subsequent years without a limitation (but only up to a maximum of 63% of the actual tax base), whereas loss carrybacks are not permitted.

Other Corporate Taxes

Other taxes include:

• a real estate transfer tax of 2% charged on real estate transfers and financial leases of real estate, unless VAT has been charged on the transaction;
• a tax on financial services provided by banks and other financial institutions (the tax rate is 8.5% and is applied to the fee of the financial service);
• an insurance premium tax levied on insurance premiums at the rate of 8.5% and paid by insurance companies;
• an environmental tax charged on CO2 emissions, waste disposal, lubricating oils and fluids, used tyres and used motor vehicles
• when registering for the first time a motor vehicle in Slovenia, a specific tax applies (rates may vary).

Currently, there is no specific tax levied on immovable property in Slovenia. However, a charge for the use of building land is levied on vacant and constructed building land owned by legal persons and individuals.
Social security contributions paid by the employer amount to 16.1% of the gross salary paid to employees, divided as follows: pension and disability insurance: 8.85%; health insurance: 6.56%; unemployment insurance: 0.06%; injury at work: 0.53%; parental insurance: 0.10%.

Other Domestic Resources

Financial Administration Office

Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Tax Rate

Allowable Deductions and Tax Credits

General individual tax deduction valid for every taxpayer is based on the amount of the yearly income. The general allowance for residents can go from EUR 3,500 to 4,500; the one for residents that are 100% disabled is equal to EUR 18,188.61; the special personal allowance for a resident who is still studying and has a recognised status of a student is EUR 3,500; the allowance for additional pension insurance can go up to EUR 2,903.66. Personal allowance for taxpayers over the age of 70 is set at EUR 1,500 for 2022.
There are also various allowances for dependent family members (varying on the number of children, for example EUR 2,510.03 for the first child, EUR 2,728.72 for the second, up to EUR 8,195.86 for the fifth child, EUR 9,094.90 for a child who needs special care and custody, etc.).

Special Expatriate Tax Regime

Slovenian residents are taxed on their worldwide income, non-residents only on the income sourced in Slovenia. An individual is considered resident for tax purposes if he/she has a formal residential tie with Slovenia; has a habitual abode or centre of personal and economic interests; or is present more than 183 days in a taxable year in Slovenia.
There is no special tax regime for expatriates. Nevertheless, non-residents who are residents of EU or EEA member states can claim the general allowance if at least 90% of personal income is taxable in Slovenia and respective income is exempt from taxation in the country of residency. Click here for further details.