Ljubljana
EY
Dunajska cesta 111 1000 Ljubljana Slovenia
Executive and immigration contacts
Matej Kovacic
Mojca Lukac
A. Income tax
GMT +1
+386 (1) 583-1762
Fax: +386 (1) 583-1710
Email: matej.kovacic@si.ey.com
+386 (1) 583-1731
Fax: +386 (1) 583-1710
Email: mojca.lukac@si.ey.com
Who is liable. Residents are subject to income tax on their world wide income. Nonresidents are subject to income tax on income from sources in Slovenia. Employment income and income from the performance of services and business income are considered to be derived from sources in Slovenia if the employment, ser vices 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.
Income subject to tax. The taxation of various types of income is described below.
Employment income. Employment income includes all income that a person receives from the employer or other person with respect to either past or present employment. Employment in come includes salary, holiday bonus, fringe benefits and direc tors’ fees. Benefits provided to family members of employees are considered to be employees’ benefits.
Business income. Business income includes income derived from performance of business activities and income from individual business transactions. Taxable business income is the difference between gross business income and the expenses necessary to generate business income.
Income from agricultural activities and forestry. Income from primary agricultural and primary forestry activity is attributed to a person who has the right to use the land that is recorded in the land register as agricultural land or a forest (cadastral income).
The tax base for cadastral income is the deemed income from the land determined under the relevant regulations.
Income from property leases Income from property leases includes income from leases of immovable and movable property.
In the determination of the tax base, standard costs of 15% are deducted from the income received. Instead of deducting standard costs, individuals may opt to deduct the actual costs for the maintenance of property to preserve its usable value. Income from property leases is taxed at a flat rate of 27.5% and is treated as final tax.
Income from transfers of property rights. Income from transfers of property rights includes income derived from the conveyance of the right to use the following:
Material copyrights
Material rights of the operator
Inventions
Appearance of a product
Distinguishing signs
Technical improvements
Plans
Formulas
Methods
Similar rights or similar property and information about indus trial, commercial or scientific experience, regardless of whether they are legally insured
Personal names
Pseudonyms
Images
To determine the tax base, income is reduced by 10% of standard costs unless the holder of the right is not its author, operator, or inventor. Standard costs are not recognized in the conveyance of the right to use a personal name, pseudonym or image. An advance payment of income tax equaling 25% of the tax base is payable.
Income from capital. Income from capital includes dividends, interest and capital gains.
Income from dividends includes dividends and other income derived from ownership of shares. Tax on dividends is also payable on the following:
Hidden profit distributions
Gains that are distributed with respect to debt securities
Income received on the basis of profit sharing of mutual funds
Income similar to dividends, which is taxed in the same manner as dividends, includes income derived from sales of products and services at lower than market prices to shareholders and their family members and debt cancellations. A flat tax of 27.5% is imposed on dividends and is treated as final tax.
Interest income includes the following:
Interest on loans, debt securities, bank deposits, deposits with savings banks and other similar financial claims
Income from life insurance policies
Income from financial leases
• Interest income received by unit holders from mutual funds that make payments on the basis of income sharing
Interest on deposits at banks and saving banks established in Slovenia or other European Union (EU) member states of up to EUR1,000 is not included in the tax base. Interest income is taxed at a flat rate of 27.5%.
An individual who is resident in a EU member state other than Slovenia is not subject to personal income tax on savings with a source in Slovenia to which the automated information exchange system between the EU member states applies.
Capital gains. Capital gains include the following:
• Gains from the disposal of immovable property regardless of whether the condition of the property is changed or unchanged at the time of disposal
• Gains from the disposal of securities and shares issued by com panies and other entities
• Gains from investment coupons
The tax base for capital gains is the difference between the value of the capital at the time of disposal and the value of the capital at the time of acquisition. Standard costs are recognized for acqui sition and disposal costs and reduce the tax base.
Capital gains are taxed at a flat rate of 27.5% with a reduction of the tax rate for every completed five-year period of ownership of the capital. As a result, the following are the tax rates:
• 20% after 5 years
• 15% after 10 years
• 10% after 15 years
Other income. Other income includes awards, gifts, prizes from prize drawings, student grants and similar items. An advance payment of income tax equaling 25% of the tax base is payable. The 25% advance payment is withheld at source unless the payer of the income is a nonresident or an individual. In such cases, the recipient of the income must file a prepayment tax return.
Deductions. For 2021, residents may claim as deductions the follow ing annual tax reliefs:
• General relief of EUR3,500 if no other residents claim depen dent family member relief with respect to the taxpayer. If the annual tax base is lower than EUR13,316.83, the tax relief is increased and calculated using the following formula: Total al lowance = 18,700.38 – (1.40427 x total income). If the annual tax base is lower than EUR11,166.37, the tax relief is increased to EUR6,519.82.
• Dependent family member relief of EUR2,436.92.
• Relief of EUR2,436.92 for the first, EUR2,649.24 for the sec ond, EUR4,418.54 for the third, EUR6,187.85 for the fourth and EUR7,957.14 for the fifth dependent child.
• Relief of EUR8,830 for dependent children in need of special care.
• If certain conditions are met, relief of EUR17,658.84 for disabled persons with a severe physical disability.
• Relief of EUR3,500 for a student if no other residents claim dependent family member relief with respect to the taxpayer and if other conditions are met.
• Special tax relief for assignees in the maximum annual amount of EUR12,000 if the following conditions are met:
— The assignment is longer than 30 days.
— The prior working location was more than 200 kilometers from the assignment location.
— The monthly salary received during the assignment is at least 1.5 times higher than the average annual salary in the previ ous year divided by 12 months.
— The individual was not a tax resident of the host country five years prior to the assignment.
• For self-employed cultural workers or journalists earning annual income up to EUR25,000, a deduction equal to 15% of their annual income.
Nonresidents of Slovenia who are tax residents of other EU or European Economic Area (EEA) member states may apply the general relief and relief for dependent family members in their annual income tax return if they can demonstrate that at least 90% of their entire taxable income in a tax year is derived in Slovenia and if they can prove that the income was exempt from tax or not taxed in their country of residence.
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 con tracts 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 with held and paid during the year and then pay any balance due or request a refund of any overpayment.
Individuals are subject to tax at the following progressive rates for income earned in 2021.
Married persons are taxed separately, not jointly, on all types of income.
by a private business may be carried forward for an
B. Other taxes
Inheritance
receive
gift taxes.
number of years.
who inherit, or
Slovenia
are subject to tax. Movable property received is not subject to the tax if it does not exceed the value of EUR5,000.
The taxable value for inheritance or gift tax is the current market value of the property, less transaction costs and any liabilities attached to the property. The inheritance and gift tax rates depend on the taxable value of the property and on the beneficiary’s relationship to the deceased or donor. Beneficiaries are divided into the following categories.
Class Beneficiaries
I
Spouses, children and their spouses, and stepchildren
II Parents and siblings and their descendants
III Grandparents
IV All others
Class I beneficiaries are not subject to inheritance or gift tax. In addition, beneficiaries in any other class who inherit or receive a residence, and who have no other residence and were living in the household of the deceased or donor at the time of the death or gift, are not subject to inheritance or gift tax.
The rates for Class II beneficiaries range from 5% to 14%, for Class III beneficiaries from 8% to 17%, and for Class IV benefi ciaries from 12% to 39%.
Property tax. Municipalities determine compensation for the use of building land based on points allocated to each building land. Each municipality has its own scoring system and point value. As a result, the compensation varies based on the location of the building land.
Municipalities tax real estate of higher value at the following progressive tax rates based on the type of real estate:
• Buildings: Tax rates range from 0.1% up to 1% for compensa tion value over EUR251,170.77.
• Vacation home: Tax rates range from 0.2% up to 1.5% for compensation value over EUR251,170.77.
• Office space: Tax rates range from 0.15% up to 1.25% for compensation value over EUR194,813.91.
Certain properties are exempted from taxation depending on the usage of the property and type of property. Property tax is paid in installments for the year in advance.
Taxes on vessels. Taxes are imposed on vessels that are longer than five meters and satisfy one of the following additional conditions:
• It is entered in the boat/ship register for shipping on the sea and continental waters
• The owner of the vessel is a resident of Slovenia and the vessel fulfills the conditions to be registered as mentioned in the first item above, but it is not registered
• The owner is a resident of Slovenia and the vessel fulfills the conditions to be registered, but is not registered because the ship is already registered abroad
The vehicle taxes do not apply to vehicles performing only regis tered activities.
following tables
of the vehicle tax and the additional tax
Length class of
per Tax per the vessels
meter of kilowatt of power Exceeding Not exceeding tax vessel of vessel Meters Meters EUR EUR EUR
C. Social security
Slovenia imposes social security taxes to cover health insurance, pension and disability insurance, and unemployment insurance. Each month, employers and employees contribute amounts equal to the percentages of salary shown in the table below. No ceiling applies to the amount of salary subject to the contributions.
Employer Employee Total Type of contribution % % %
Pension and disability insurance 8.85 15.50 24.35
Health insurance 6.56 6.36 12.92 Unemployment insurance 0.06 0.14 0.20 Maternity allowance 0.10 0.10 0.20 Worker’s compensation insurance 0.53 0.00 0.53 Total 16.10 22.10 38.20
Self-employed persons must pay all of the above contributions, unless they are also employees. The tax base for the contributions is 60% of the profit generated by the business.
Contributions for health insurance and pension and disability insurance are also levied on contract workers. For contract work ers, the rates of health insurance contributions are 6.36% of earned income for employees and 0.53% of earned income for employers. The contributions for pension and disability are 15.5% of earned income for employees who are not covered by pension and health insurance and 8.85% of earned income for employers. Employees who are already covered by pension and health insurance does not need to make contributions for pension and disability.
Contributions paid during the year are considered final payments. As a result, no adjustment or final settlement is made at the end of the year.
D. Tax filing and payment procedures
The tax year in Slovenia is the calendar year.
The tax authorities prepare an informative calculation of each individual’s personal income tax liability based on the information received from payers of income. Beginning from the date of dis patch of the calculation, the individual has 30 days to object and submit a tax return. If the individual does not object within
30 days, the calculation is deemed to be a tax assessment and the individual is considered to have waived his or her right to appeal.
If a tax resident individual does not receive the calculation by 31 May of the year following the tax year, he or she must com plete and submit the tax return by 31 July of the year following the tax year.
Advance payments are due on the receipt of income (see Section A).
The tax is usually payable within 30 days after receipt of the tax assessment. The tax authorities have until 31 October of the year following the tax year to issue the annual tax assessment.
A rental income tax return must be filed by 28 February of the year following the tax year.
Interest received from abroad must be declared to the tax authorities by 28 February of the year following the calendar year.
Capital gains must be reported by 28 February of the year follow ing the calendar year.
A dividend tax return must be filed by 28 February of the year following the calendar year.
E. Tax treaties
Slovenia has entered into double tax treaties with the following jurisdictions.
Albania Hungary Poland Armenia Iceland Portugal
Austria India Qatar Azerbaijan Iran Romania Belarus Ireland Russian Belgium Isle of Man Federation Bosnia and Israel Serbia and Herzegovina Italy Montenegro Bulgaria Japan Singapore
Canada Kazakhstan Slovak Republic
China Mainland Korea (South) Spain
Croatia Kosovo Sweden Cyprus Kuwait Switzerland
Czech Republic Latvia Thailand Denmark Lithuania Turkey
Egypt* Luxembourg Ukraine
Estonia Malta United Arab Finland Moldova Emirates
France Morocco* United Kingdom
Georgia Netherlands United States Germany North Macedonia Uzbekistan Greece Norway
* This treaty has been ratified in Slovenia, but it is not yet effective.
F. Entry visas
EU nationals and nationals of the following jurisdictions may enter Slovenia for up to 90 days (unless otherwise specified) without obtaining entry visas.
Albania (b) Japan St. Lucia
Andorra Kiribati
St. Vincent and Antigua and Korea (South) the Grenadines
Barbuda Malaysia Samoa
Argentina Marshall Islands San Marino
Australia Mauritius
Bahamas Mexico
Serbia (b)(d)
Seychelles
Barbados Micronesia Singapore Bosnia and Moldova (b) St. Kitts and Nevis
Herzegovina (b) Monaco Solomon Islands
Brazil Montenegro (b) Timor-Leste
Brunei Darussalam Netherlands
Tonga
Canada Antilles (c) Trinidad and Tobago Chile New Zealand Tuvalu
Colombia Nicaragua Ukraine (b) Costa Rica North United Arab Dominica Macedonia (b) Emirates El Salvador Palau United States
Georgia (b) Panama Uruguay
Grenada Paraguay Vanuatu Guatemala Peru Vatican City Honduras Russian Venezuela Israel Federation (a)
(a) Russian nationals may enter Slovenia without a visa only if they hold a perma nent visa for Austria, Belgium, Denmark, France, Finland, Greece, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, Germany, the Netherlands, Norway, Portugal, Spain, Sweden, Switzerland or the United Kingdom and if such visa has been valid for at least three months as of the date of crossing the Slovenian border.
(b) The rule applies only to holders of biometrical passports. (c) The rule applies to the successors of the former Netherlands Antilles.
(d) Holders of Serbian passports issued by the Serbian Coordination Directorate are excluded.
Holders of diplomatic and business passports from the following jurisdictions may also enter Slovenia without visas for specified durations (up to 3 months or 90 days).
Albania Egypt South Africa Azerbaijan Indonesia Thailand Bolivia Jamaica Tunisia Bosnia and Kazakhstan Turkey
Herzegovina Maldives Ukraine* China Mainland Peru United States
Cuba Philippines Vietnam Ecuador Russian Federation
* The rule applies only to holders of biometrical passports.
G. Work registration, single residence and work permit, and self-employment
Foreigners need a single permit for residing and working in Slovenia if any of the following applies:
• They wish to reside and be employed or perform work, includ ing as self-employed persons.
• They are either posted or transferred to work in Slovenia or perform seasonal work in Slovenia for longer than 90 days.
A single application is filed for obtaining such permit, which means that it is not necessary to first obtain a work permit. However, work permits must be obtained for Bosnia and
Herzegovina citizens and for seasonal farm workers who are working up to 90 days.
The initial single permit, which needs to be obtained before entering Slovenia, is issued for the duration of the employment or work contract, but not for longer than one year and can be extended for a maximum of two years if the foreigner and their employer apply for an extension of the single permit by the appropriate time. It can be extended under the same conditions that apply to its issuance.
The single residence and work permit is issued by the administra tive office with the consent of the Employment Service of Slovenia. After submitting the application for the single permit, the administrative office automatically begins the process of obtaining consent from the Employment Service of Slovenia. The permit is issued in residence permit card form, on which it is specifically noted that it is the single permit.
A foreigner, his or her employer, or its authorized person may file for an application for the single permit. If the first single permit application is filed by the foreigner, it must be filed at the diplo matic representation or consulate of Slovenia abroad, while an employer or its authorized person may file an application with the administrative office where a foreigner will reside or with the administrative office of where the employer’s registered office is located or where the business activity will take place. The single permit application needs to be accompanied by supporting docu ments proving that the requirements for both residence and employment are met (that is, a foreigner must have a passport with a validity that exceeds the intended residence in Slovenia by at least three months, sufficient funds and adequate health insur ance, as well as supporting documents required for a particular type of employment or work (for example, an employment con tract or a certificate).
Under the procedure for issuing the single permit, the administra tive office obtains data on compulsory health insurance if the foreigner’s compulsory health insurance is in Slovenia and data on criminal and minor offenses’ records kept in Slovenia. If the criminal and minor offences’ records are not available in Slovenia, they should be provided by the foreigner.
A foreign national who establishes a company in Slovenia and intends to run the business as a founder must obtain a personal single permit for self-employment before registering the compa ny.
Employers from EU member states must register job positions at the employment office for persons who are seconded to a subsid iary or branch office in Slovenia. No single permits are required for such persons, but such work needs to be registered at the Employment Service of Slovenia. If a foreigner is not from an EU member state, he or she must obtain a single permit.
The EU Blue Card is introduced for highly qualified employee migrants and entitles its holder to reside and work in the territory of an EU member state.
Workers that are seconded to work in Slovenia must be employed by the seconding company for at least one year before the secondment. This applies to all types of secondments, such as cross-border services, movement within a group of companies and seasonal work.
Citizens of the EU do not need single permits to work in Slovenia. However, the foreign entity must register them at the National Employment Office, specifying where and over what time period the individual will be working.
Because the application process for work permits is timeconsuming, applications should be submitted to the appropriate authorities at least two months before the intended start date of employment. Each employment of a foreign national must be registered at the employment office. For EU citizens whose work need only be registered and no single permit is required, the pro cedure is shorter and simplified, yet it should be completed prior to the start of work.
H. Residence permits
Temporary residence permits. Temporary residence permits are issued with work permits (that is, single residence and work per mits) or independently by the Regional Department of Internal Affairs for a period of the intended stay in Slovenia, up to five years (or less if the passport expires before then) in the case of an EU citizen. To apply for a temporary residence permit, the appli cant must prove the following:
• The length of his or her intended stay in Slovenia
• Adequate means of support
• Arrangement for health insurance
A foreign person must indicate one of the prescribed reasons for his or her residence in Slovenia, such as employment, work, fam ily reunion or study.
The application for a first residence permit must be filed with the Slovenian embassy in the country of permanent residence. An application for a residence permit for seasonal work can be filed by a foreigner with the Slovenian embassy in a foreign country or by his or her employer in Slovenia or with the embassy abroad.
The same application process applies with respect to cross-border services.
The residence permit must be obtained before arrival in Slovenia. After obtaining the residence permit, a foreigner must register his or her address in Slovenia.
Temporary residence permits may be renewed. Applications for renewals must be filed with the authorities before the expiration of the existing permit.
Permanent residence permits. Permanent residence permits are issued to foreign nationals who have lived in Slovenia for five consecutive years under temporary residence permits if other conditions are met.
Permanent residence permits can be issued before five years have elapsed if certain conditions are met (a foreign person of Slovenian
origin and family members of a foreign person who has already obtained a permanent residence permit).
A foreign national must file an application for a permanent resi dence permit with the Regional Department of Internal Affairs in the area where he or she has a permanent place of residence.
EU nationals. An EU citizen may enter Slovenia with a valid identity card or passport and reside in Slovenia for three months without having to register his or her residence. In the event of a prolonged stay in Slovenia (in excess of three months), he or she is required to apply for registration of residence before the expi ration of the first three months of his or her residence in Slovenia. Alternatively, he or she may apply for a registration of residence immediately after his or her entry into Slovenia.
A certificate of residence registration may be issued to an EU citizen who intends to or already resides in Slovenia for the purpose of employment or work, self-employment, provisions of services, studying or family reunion, as well as to an EU citizen who wishes to reside in Slovenia for another reason.
An EU citizen, who continuously resides in Slovenia for five years on the basis of a certificate of residence registration, may be granted a permit for permanent residence. This permit is valid for an indefinite time period.
A beneficial regime concerning the entry into and residence in Slovenia applies to family members of EU citizens.
I. Family and personal considerations
Family members. Working spouses of expatriates do not auto matically receive the same types of permits as the expatriates. Applications must be filed independently.
Spouses and children of EU nationals who legally reside and work in Slovenia do not need work permits to be legally employed, but must have the approval of the National Employment Office.
Marital property regime. Under the Law on Marriage and Family Relations, a couple’s property is presumed to be owned in equal shares. However, the spouses may prove that they did not con tribute to the joint property in equal proportions. The law applies to married couples and long-term heterosexual partnerships (common-law spouses). For spouses who are both foreign nation als, Slovenian law does not apply.
Forced heirship. Under Slovenian inheritance law, a specified per centage of a deceased’s estate passes to a surviving spouse and children, regardless of the provisions of any will.
Driver’s permits. Foreign individuals who possess valid driver’s licenses in their home countries may drive vehicles in Slovenia for a period up to 12 months after taking up residence in Slovenia. However, citizens of EU countries may use their home-country driver’s licenses during the entire length of their stays in Slovenia without applying for Slovenian licenses. Foreign individuals may apply for a Slovenian driving license within two years after the
date of entry into Slovenia. However, even if an individual applies for a Slovenian driver’s license within two years, he or she may not drive in Slovenia with his or her home country driver’s license after the 12-month grace period.
A Slovenian driver’s license may be issued if the applicant submits the application, results of a medical examination, valid foreign driver’s license and a fee. The foreign driver’s license is sent to the applicant’s home country and may be returned to the foreign indi vidual when he or she returns to his or her home country.