SLOVENIA 2016
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Web Site: www.shermannigretti.it E-mail: info@shermannigretti.it Tel. +39 (0)2 7722951 Mob. +39 335 6030346 Twitter: @ShermanNigretti Linkedin: Gianmauro Sherman Nigretti
GEOGRAPHY AND POPULATION CAPITAL:
LJUBLJANA
POPULATION:
1,98 MILLION
POLITICAL SYSTEM:
PARLAMENTARY DEMOCRATIC REPUBLIC
CURRENCY:
EURO (SINCE 1ST JANUARY 2007)
FORMS OF BUSINESS ORGANIZATIONS The Companies Act recognizes the following types of business vehicles: Partnerships (organized according to general provisions of continental law): • Limited partnership • General partnership Corporate forms: Persons who wish to incorporate a commercial enterprise in Slovenia may choose from the following types of business vehicles : • a public limited company/a joint-stock company • a company with limited liability/a private limited company • a sole proprietorship/a sole proprietor/a sole trader • a general partnership • limited partnership • a limited partnership/a partnership limited by shares ( the German model) • Branch (legally organized unit of foreign legal entity; the parent company is responsible for all liabilities arising from the operations of its branch) The most common forms are limited liability company (d.o.o.) and joint stock company (d.d.). Establishing a limited liability company or a branch office is the most common practice of foreign companies establishing their business in Slovenia.
Limited liability company (LLC or d.o.o.) An LLC is a legal entity with one founder (single-member LLC) or multiple founders who are not liable for the obligations of their undertaking. Share capital must be paid in; the minimum amount is EUR 7,500. A limited company is the most common way of doing business in Slovenia. Limited companes are owned by shareholders (individuals or other legal entities) and run by directors. They must be recorded by a notary and registered at the Trade Register. To set up a limited company you need the following requirements: • • • • • •
Have a name and address for the company To avoid mailboxes, the Public Register of Companies (AJPES) needs a formal lease Have at least 1 director (an individual) Have at least 1 shareholder Have articles of association (agreed rules about running the company) and activities to be carried out Register your company to the Tax Administration for the Tax number and Corporate tax and for VAT (if applicable)
Public limited company (d.d.) A public limited company may be founded by one or several local or foreign natural or legal entities who adopt articles of association which are prepared in the form of a notarial record. The minimum share capital is EUR 25,000.
Sole Traders The easiest way to start a business in Slovenia is to become a ‘sole trader’ (samostojni podjetnik posameznik). This means that only you own the business and you can work alone or employ other people.
ACCOUNTING AND AUDITING Companies operating in Slovenia are obliged to keep accounting records and prepare annual financial statements in accordance with the Slovene Accounting Standards issued by the Slovene Institute of Auditors. Domestic professional efforts provided the basic framework for the Slovene Accounting Standards in accordance with the compulsory framework of the International Accounting Standards and directives of the EU. Business organisations which must have their financial statements audited are defined under the National Companies Act. The Slovene auditing profession has fully adopted the International Standards of Auditing. About reporting period and personal income tax returns have to be filed to the tax authority no later than 31 March of the current year for the previous year. When the fiscal year equals the calendar year, corporate income tax returns have to be delivered to the tax authority no later than 31 March of the current year. Where the fiscal year is reconciled with the business year (if different from the calendar year), corporate income tax returns have to be delivered to the tax authority within three months of the year end.
CORPORATE TAXATION Corporate income tax In general, all companies resident in Slovenia are subject to tax on their worldwide income (but see Foreign tax relief). A company is resident in Slovenia if it has its legal seat or effective place of management in Slovenia. Non-resident companies are subject to tax on their Slovenian-source income only (income derived from or through a permanent establishment and other Sloveniansource income subject to withholding tax). Rates of corporate income tax
The standard corporate income tax rate is 17%. The corporate income tax rate for qualified venture capital companies is 0%, subject to specific conditions. Investment funds that distribute 90% of their operating profits for the preceding tax year by 30 November of the current tax year are taxed at a rate of 0%. Administration The tax year is the calendar year. However, a company may select its financial year as its tax year if the selected year does not exceed a period of 12 months and if it informs the tax authorities regarding its selection of the tax year. The selected tax year may not be changed for a period of three years. Annual tax returns must be filed within three months after the end of the tax year.
Dividends In principle, dividends paid to residents and nonresidents are subject to withholding tax at a rate of 15%. The tax does not apply to dividends paid to a resident or to a permanent establishment of a nonresident if the dividend recipient informs the dividend payer of its tax number.
INDIVIDUAL TAXATION Who is liable Residents are subject to income tax on their worldwide income. Nonresidents are subject to income tax on income from sources in Slovenia. Employment income and in come from the performance of services and business income are considered to be derived from sources in Slovenia if the employment, services and business are carried out in Slovenia. In addition, income is deemed to be derived from a source in Slovenia if it is paid or borne by a Slovenian tax resident. An individual is considered to be resident for tax purposes in Slovenia if, during the fiscal year, he or she fulfills any of the following conditions: • He or she has an officially registered permanent residence in Slovenia; • His or her habitual abode or center of personal and economic interests is located in Slovenia; • He or she is present in Slovenia for a total of more than 183 days. Rates Employees are subject to monthly employer withholding tax on salaries at rates ranging from 16% to 50%. Temporary workers are subject to a 25% withholding tax on income earned from the performance of work and services, reduced by 10% of standardized material costs. Payments on the basis of work contracts are subject to an additional tax at a rate of 25%, paid by the employer. Individuals aggregate their active income (that is, employment income, business income, income from agricultural activities and forestry, rental income and income from transfer of property rights), apply the progressive tax rates below, subtract tax withheld and paid during the year and then pay any balance due or request a refund of any overpayment.
VAT Value added tax (VAT) is charged, levied, collected and paid in respect of the supply and import of goods and services. Under the VAT Act, the usual tax rate is equivalent to 22% and reduced to 9.5%. The following are liable for VAT at the reduced 9.5% rate:
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Human and animal food (except alcoholic beverages) Livestock, seeds and seedlings, manure and fertilisers Hotel lodgings The supply of water Medicines and medical equipment Public transport Books, periodicals and compact discs Copyright and art Housing and buildings services
The following are liable for zero-rated VAT:
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Medical services Social security services Education, sports and religious services Political and humanitarian activities Certain cultural services and the like Provisional imports are also zero-rated
DOUBLE TAX TREATIES •
Slovenia has signed double taxation agreement with 55 countries.
DISCLAIMER This publication must not be regarded as offering a complete explanation of the taxation and corporate matters that are contained within this publication. This publication has been prepared on the express terms and understanding that the publishers are not responsible for the results of any actions which are undertaken on the basis of the information which is contained within this publication. The publishers and the authors expressly disclaim all and any liability and responsability to any person, entity or corporation who acts or fails to act as a consequence of any reliance upon the whole or any part of the contents of this publication. Accordingly no person, entity or corporation should act or rely upon any matter or information as contained or implied within this publication without first obtaining advice from an appropriately qualified professional person, and ensuring that such edvice specifically relates to their particular needs.