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Ernst & Young Svetovanje d.o.o. +386 (1) 583-1700 Dunajska cesta 111 Fax: +386 (1) 583-1710 1000 Ljubljana Slovenia
Principal Tax Contact and Business Tax Services Leader
Matej Kovačič
+386 (1) 583-1762
Mobile: +386 (41) 395-325 Email: matej.kovacic@si.ey.com
International Tax and Transaction Services – International Corporate Tax Advisory
Matej Kovačič
Business Tax Advisory
Matej Kovačič
+386 (1) 583-1762
Mobile: +386 (41) 395-325 Email: matej.kovacic@si.ey.com
+386 (1) 583-1762
Mobile: +386 (41) 395-325 Email: matej.kovacic@si.ey.com
International Tax and Transaction Services – Transaction Tax Advisory
Matej Kovačič +386 (1) 583-1762
Mobile: +386 (41) 395-325 Email: matej.kovacic@si.ey.com
International Tax and Transaction Services – Transfer Pricing
David Jež +386 (1) 583-1961
Mobile: +386 (40) 725-482 Email: david.jez@si.ey.com
Tax Policy and Controversy
Matej Kovačič
Global Compliance and Reporting
Dina Ćosić
People Advisory Services
Mojca Lukač
Indirect Tax
Anka Pogačnik
A.
+386 (1) 583-1762 Mobile: +386 (41) 395-325 Email: matej.kovacic@si.ey.com
+386 (1) 583-1878
Mobile: +386 (40) 233-898 Email: dina.cosic@si.ey.com
+386 (1) 583-1731
Mobile: +386 (41) 332-396 Email: mojca.lukac@si.ey.com
+386 (1) 583-1754 Mobile: +386 (30) 479-902 Email: anka.pogacnik@si.ey.com
Royalties from Patents, Know-how, etc. 15 (a)
Services 15 (b)
Rentals 15 (c)
Net Operating Losses (Years)
Carryback 0
Carryforward Unlimited (d)
(a) This tax applies to payments to residents and nonresidents.
(b) Specified categories of service payments (consulting, marketing, market research, human resources, legal, administrative and information technology services) are subject to a 15% withholding tax if the payments are made to persons with a head office outside the European Union (EU) and if the coun try of the head office is on the list published by the Ministry (list of prohib ited list countries) or on the list of EU non-cooperative jurisdictions.
(c) A 15% withholding tax applies to cross-border payments for the lease of real estate located in Slovenia.
(d) See Section C.
B. Taxes on corporate income and gains
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. Nonresident companies are subject to tax on their Sloveniansource income only (income derived from or through a perma nent establishment and other Slovenian-source income subject to withholding tax).
The definition of a “permanent establishment” of a nonresident company in Slovenia generally follows the definition in the Organisation for Economic Co-operation and Development (OECD) Model Tax Convention on Income and Capital 2010.
Rates of corporate income tax. The standard corporate income tax rate is 19%.
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%.
Pension funds established in accordance with the Pension and Disability Insurance Act are taxed at a rate of 0%.
Insurance undertakings that are authorized to implement the pen sion scheme in accordance with the act regulating pension and disability insurance must pay tax with respect to the activities re lating to such implementation at a rate of 0% of the tax base if a separate tax calculation is compiled only for this pension scheme.
Capital gains. Fifty percent of a capital gain from the disposal of shares is exempt from tax if certain conditions are met. The other 50% is treated as ordinary business income and is subject to tax at the regular corporate rate. However, in such circumstances, the expenses of a taxpayer are decreased by 5% of the exempt amount of capital gains. The same principle applies to capital losses (only 50% of a capital loss is deductible for tax purposes).
If a capital gain is realized from disposal of shares acquired with respect to venture capital investments in a venture capital company that is established in accordance with the act regulating venture capital companies, the total amount of such gain may be exempt from tax if the company had the status of a venture capital com pany for the entire tax period and if the company had the status
of venture capital company for the entire period of the holding of the shares by the taxpayer. Losses incurred on the transfer of shares acquired under a venture capital scheme are not deductible for tax purposes.
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.
Companies must make advance payments of corporate income tax. Monthly advance payments of corporate income tax are required if the total amount of the advance payments exceeds EUR400, based on the tax calculated in the tax return for the preceding tax year. Companies must make quarterly advance payments if the total amount of the advance payments is less than EUR400, based on the tax calculated in the tax return for the preceding tax year. Advance payments of corporate income tax are due on the 10th day of the month following the period to which the advance tax payment relates. The balance of tax due must be paid within 30 days after the annual tax return is filed with the tax authorities. If the total amount of advance payments of corporate income tax exceeds the amount of tax due for the year, the overpaid tax is refunded to the company.
Dividends. In principle, dividends paid to residents and nonresi dents 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 estab lishment of a nonresident if the dividend recipient informs the dividend payer of its tax number.
Measures implementing the EU Parent-Subsidiary Directive are in effect in Slovenia. Under these measures, dividend distribu tions are exempt from withholding tax if all of the following conditions are satisfied:
• The recipient of the dividends owns at least 10% of the equity capital or voting power of the payer of the dividends.
• The duration of the recipient’s ownership in the payer is at least two years.
• The recipient of dividends is a taxable company that has one of the prescribed legal forms, is a resident of an EU member state and is a taxpayer for one of the taxes for which the common system of taxation applies.
If, at the time of payment of a dividend, the duration of ownership of the recipient is shorter than two years and all other require ments are met, a withholding tax exemption is still possible if the payer or its agent provides an appropriate bank guarantee to the tax authorities.
Dividends paid to EU/European Economic Area (EEA) residents are exempt from withholding tax if a tax credit is not available in the country of residence of the recipient.
Dividends and interest paid to EU/EEA resident pension funds, investment funds and insurance companies performing pension
plans are exempt from withholding tax if a tax credit is not available in the country of residence of the recipient and if the recipient of such income is not a Slovenian branch of such per sons.
Dividends received by Slovenian taxable persons are generally subject to a full participation exemption.
Expenses of an amount equal to 5% of the dividends received are not deductible for tax purposes because they are deemed to be expenses incurred with respect to the exempt dividend income.
Foreign tax relief. Income tax paid abroad can be credited against the final tax liability of a company if the income on which the tax has been paid abroad is included in the tax base. The foreign tax credit may not exceed the lower of the amount of foreign tax on foreign income that was paid or the amount of tax that would have been paid under Slovenian law on the foreign income if the credit had not been granted. To claim the tax credit, the taxpayer must submit appropriate documentation together with the tax return.
C. Determination of trading income
General. Taxable income is based on the profits reported in the annual financial statements prepared in accordance with International Financial Reporting Standards (IFRS) or Slovenian accounting standards, which generally follow IFRS. For tax purposes, profits are adjusted, primarily for nondeductible expenses.
In general, only those expenses that are directly required for the generation of taxable revenues are allowed as deductible expenses.
The law specifies that certain expenses are not deductible, includ ing the following:
• Incentives paid to the management board and to the board of directors
• Pecuniary penalties (fines paid to government agencies)
• Donations
• Bribes
Only 60% of entertainment expenses and fees paid to the super visory board is deductible for tax purposes.
Interest on loans to related entities is deductible up to the amount computed by applying the acknowledged interest rate at the time of the loan approval. The Ministry of Finance publishes the acknowledged interest rate. It is possible for a taxable person to prove that a contractual interest rate exceeding the acknowledged interest rate is an arm’s-length rate.
A deduction for bad debts can be claimed if specified conditions are met.
Limitations to tax base reduction. Effective from 2020, a general limitation of tax base reduction after utilization of tax reliefs and tax losses carried forward was introduced. The maximum reduc tion of the tax base from tax allowances and the tax losses carried forward is limited to 63% of the tax base for a tax period, which results in an effective minimum corporate tax rate of 7%.
Inventories. Inventories may be valued using any of the methods prescribed by the applicable accounting standards. Permissible methods include first-in, first-out (FIFO), average cost and other methods. The last-in, first-out (LIFO) method is not allowed. Inventories are measured at the lower of cost or net realizable value.
Provisions. The following provisions are deductible for tax pur poses up to an amount equal to 50% of the provisions established in accordance with the accounting standards:
• Provisions for warranties
• Provisions for restructurings
• Provisions for expected losses from onerous contracts
• Provisions for pensions
• Provisions for termination benefits with respect to employees
• Provisions for jubilee benefits
Other provisions established based on applicable accounting stan dards are 100% tax deductible.
Specific provisions established by a bank for specific risks are deductible up to the amount prescribed by the Banking Act. Technical provisions that insurance companies are required to establish under the law are deductible up to the amount prescribed by the Insurance Act. Special provisions that are required for stockbrokerage companies are deductible up to the amount prescribed by the Financial Instruments Market Act.
Revaluation expenses. In general, subject to special conditions and limitations, revaluations of the following items are deductible for tax purposes:
• Receivables
• Financial assets and financial instruments measured at fair value through profit or loss
• Goodwill
• Debts, receivables, investments and cash receivables, provided that the revaluations are based on changes in the exchange rate
Tax depreciation. Depreciation calculated using the straight-line method is deductible for tax purposes. The tax law sets the maxi mum depreciation rates. The following are some of the prescribed maximum straight-line depreciation rates.
Assets Rate (%)
Buildings, including investment property 3
Parts of buildings, including investment property 6
Equipment, vehicles and machinery 20
Parts of equipment and equipment for research activities 33.3
Computer equipment, hardware and software 50
Crops lasting several years 10
Breeding animals 20
Other investments 10
For the depreciation of operating leases, the maximum annual depreciation rate is calculated taking into account the period of the contractual lease of the asset. Depreciation recognition is determined depending on the contractual lease terms. Changes to the recognition of depreciation of operating leases applies to tax periods beginning on or after 1 January 2022.
Tax relief for investments. A taxable person may claim a reduction of the tax base in the amount of 40% of the amount invested in equipment and intangible assets (subject to certain limitations). The reduction may not exceed the amount of the tax base, and the unused portion of the tax relief can be carried forward to the next five tax periods.
Tax relief for research and development expenditure. Tax relief is available for research and development (R&D) expenditure.
The tax base may be decreased by 100% of the expenditure in curred in R&D activities (super deduction).
The taxable person may also carry forward the unused portion of the tax relief to the following five fiscal periods.
Such tax relief may not be granted for R&D that is financed by government funding or the EU.
Tax relief for R&D expenditure excludes the use of the tax relief for investments.
Tax relief for investment in the digital and green transition. New tax relief for investment in the digital and green transition has been introduced, effective from 1 January 2022. Tax relief amounts to 40% of the amount representing investments in the digital transformation and green transition. These investments include investments in cloud computing, artificial intelligence and big data, and investments in environmentally friendly tech nologies, such as cleaner, cheaper, and healthier public and private transport, decarbonization of the energy sector, energy efficiency of buildings and the introduction of other climate neutrality standards.
The new relief is mutually exclusive with the R&D investment relief and the investment relief and cannot be claimed if invest ments were financed from the budgets of self-governing local communities, the budget of the Republic of Slovenia or the EU budget, and if these funds have the nature of a grant.
Tax relief for the hiring of employees. An employer who hires cer tain employees may claim relief in the amount of 45% of the sal ary of such employees for the first 24 months of employment, but not exceeding the amount of the tax base. To be eligible for the relief, one of the following conditions should be met:
• The employee is younger than 29 years old or older than 55 years old.
• The employee represents a person who is in a profession for which there is a shortage of jobseekers in the labor market and who was not employed by the employer seeking the tax relief or a related party in the past 24 months, provided such shortage is identified on the list determined by the Ministry of Labor.
• The overall number of employees employed at the employer in the tax period increased.
An employer may claim relief in the amount of 55% of the employee’s salary if he employs a person under the age of 25 who is employed for the first time, but no more than the amount of the tax base.
Hidden profit distributions. Hidden profit distributions are nonde ductible expenditures and are subject to withholding tax as
deemed dividends. The following items are treated as hidden profit distributions to a shareholder owning directly or indirectly at least 25% of the capital in the payer (or controlling the payer on the basis of the contract or having influence over the payer):
• Providing assets or performing services, including the discharge of debts, without consideration or at a price that is lower than the comparable market prices
• Payments for the purchase of assets and services at a price that is higher than the comparable market prices
• Payments for assets that were not transferred or for services that were not rendered
• Interest on loans granted at an interest rate that differs from the acknowledged interest rate if the taxpayer cannot prove that an unrelated entity would have agreed to the interest rate
• Interest on loans exceeding the thin-capitalization limit (see Section E)
Relief for losses. Assessed tax losses may be carried forward for an unlimited time period. It is possible to use tax losses carried forward from previous years, up to a maximum of 50% of the tax base for a tax period. The right to carry forward tax losses is lost if the ownership of share capital or voting rights changes by more than 50% during a tax year, as compared to the beginning of the tax year, and if the taxpayer did not conduct any business activity for two years or the business activity was significantly changed in the two-year period before or after the change of ownership (unless the business activity was significantly changed to main tain jobs or to restore business operations).
Loss carrybacks are not allowed.
Groups of companies. The formation of groups of companies for tax purposes is not allowed.
D. Other significant taxes
The following table summarizes other significant taxes.
Nature of tax Rate (%)
Value-added tax
Standard rate 22
Reduced rate 9.5
Super reduced rate 5 Transfer tax on immovable property 2 Motor vehicle tax; amount of tax depends on power of the engine, emission standard, CO2 emissions and other factors
Various Water Vessel Tax; amount of the tax depends on the length of the vessel (minimum of five meters) and the power of the engine
Various Tax on insurance premiums 8.5 Property tax; levied on premises such as buildings, parts of buildings and land and depends on the location, age and other factors
Various Social security contributions, on monthly salary
Health insurance, paid by Employer 6.56
Nature of tax Rate (%)
Employee 6.36
Pension and disability, paid by
Employer 8.85
Employee 15.5
Unemployment insurance, paid by
Employer 0.06
Employee 0.14
Maternity benefits, paid by
Employer 0.1
Employee 0.1
Workers’ compensation insurance (for occupational injuries and diseases), paid by employer 0.53
E. Miscellaneous matters
Foreign-exchange controls. The official Slovenian currency is the euro (EUR).
Legal entities with their head office in Slovenia and subsidiaries of foreign commercial companies that are registered in the Court Registry in Slovenia may maintain foreign-currency accounts or foreign-currency deposit accounts at authorized banks in Slovenia. Slovenian and foreign enterprises and their subsidiaries may freely perform one-sided transfers of property to or from Slovenia. Profits may be freely transferred abroad in foreign cur rency.
Resident enterprises may obtain loans from nonresident enterprises in their own name and for their own account. They are required to report selected loan transactions with nonresident enterprises to the Bank of Slovenia. For this purpose, loan trans actions include the following:
• Pledges of real estate and other security
• Purchases by nonresidents of accounts receivable arising from transactions between resident enterprises
• Purchases by residents of accounts receivable arising from transactions between nonresident enterprises
• Certain other transactions between resident and nonresident enterprises if the economic purpose of the transaction is effec tively the granting of a loan
Transfer pricing. Transfer prices are determined by referring to market prices of the same or comparable assets or services charged between unrelated parties (comparable market prices). Comparable market prices are determined by one of the five methods prescribed by the OECD guidelines.
A resident or nonresident and a foreign legal entity or foreign partnership are deemed to be related parties if any of the follow ing circumstances exist:
• The taxable person directly or indirectly holds 25% or more of the value or number of shares or equity holdings, or control over management or supervision or voting rights of the foreign person or controls the foreign person on the basis of contract or transaction terms that differ from terms that are or would in the same or comparable circumstances be agreed to between unre lated parties.
• The foreign person directly or indirectly holds 25% or more of the value or number of shares or equity holdings or control over management or supervision or voting rights of a taxable person, or controls the taxable person on the basis of contract or trans action terms that differ from terms that are or would in the same or comparable circumstances be agreed to between unrelated parties.
•
The same person at the same time, directly or indirectly, holds 25% or more of the value or number of shares or holdings or participates in the management or supervision of the taxable person and the foreign person or two taxable persons or they are under the same person’s control on the basis of contract or trans action terms that differ from terms that are or would in the same or comparable circumstances be agreed to between unrelated parties.
•
The same natural persons or members of their families directly or indirectly hold 25% or more of the value or number of shares or holdings or control over the management or supervision of the taxable person and the foreign person or two resident enti ties or they are under their control on the basis of contract or transaction terms that differ from terms that are or would in the same or comparable circumstances be achieved between unre lated parties.
Taxpayers must maintain transfer-pricing documentation continu ously. The transfer-pricing documentation requirements are based on the Master File concept. Under this concept, which is recommended by the European Community (EC) Council and the EU Joint Transfer Pricing Forum, the transfer-pricing documentation consists of a Master File, country-specific part and Country-byCountry Report (CbCR).
Country-by-Country (CbC) reporting obligations may apply in Slovenia to a group of businesses if it has at least business based in Slovenia and at least business based in another country and if it has a consolidated group revenue of at least EUR750 million. CbCRs must be filed within 12 months after the end of the fiscal year to which they relate. The CbCR must include the following information for each fiscal year and for each jurisdiction where business is conducted:
• Amount of revenue generated
• Amount of profit or loss before tax
• Amount of accrued and paid tax
• Amount of undistributed profits
• The number of employees
• Size of tangible assets (excluding cash and cash equivalents)
If a group needs to report, it must notify the Slovenian tax author ity every year where it intends to report. The CbC reporting notification must be submitted in electronic form via the eDavki portal together with the corporate income tax return. The CbC notification form is available on the Slovenian tax authority web site and is available in Slovenian language.
Related-party transactions must also be reported every year with the corporate income tax return in accordance with the following rules:
• If the cumulative amount of given or received loans from a particular related party exceeds EUR50,000 in a tax period, the taxpayer must disclose the name of the related party, its state of
residence and tax number, the cumulative amount of loans and the type of relationship with the related party.
• If the cumulative amount of other intercompany receivables or liabilities toward a particular related party exceeds EUR50,000 in a tax period, the taxpayer must disclose the name of the related party, its state of residence and tax number, the cumula tive amount of receivables or liabilities toward the related party and the type of relationship with the related party.
The transfer-pricing rules can apply to transactions between domestic related parties in specific circumstances.
Debt-to-equity rules. Interest on loans from shareholders, who directly or indirectly at any time during a tax year hold at least 25% of capital or voting rights of the taxable person (with the exception of banks and insurance companies as borrowers), is deductible only if it is attributable to the part of the loan that does not exceed a specified multiple of the value of the share capital owned (debt-to-equity ratio). Loans from shareholders are also considered loans from related persons of the taxable person if the shareholder directly or indirectly at any time during a tax year holds at least 25% of shares, holdings or voting rights in the lender and the taxable person. For example, this applies to loans obtained from sister companies. The applicable debt-to-equity ratio is currently 4:1.
Anti-avoidance legislation. On 27 November 2018, the National Assembly adopted the amended Corporate Income Tax Act (CITA-2). The amendments were based on Council Directive (EU) 2016/1164 of 12 July 2016. The changes took effect on 1 January 2019. The amended act introduces a general anti-abuse rule to prevent abusive tax practices. The rule may be used only if all of the other rules set out in CITA-2 cannot prevent tax abuse. This means that the general anti-abuse rule is used as a last resource if other rules set out in CITA-2 are not sufficient to prevent the obtaining an unjustified tax advantage.
In addition, the amendment introduced the controlled foreign company (CFC) regime. A CFC has two main elements. The first is based on participation and entitlement to profits, while the other is based on actual taxation, as compared to possible taxa tion in Slovenia. A person who is not taxed under CITA-2 is treated as a CFC if the following conditions are met:
• A taxable person directly or indirectly participates in the person with more than 50% of the voting rights, has directly or indi rectly more than 50% of the capital of the person, or is entitled to more than 50% of the person’s profits.
• The corporate income tax on the profits actually paid by the person is less than half of the corporate income tax that would be charged to a person on the basis of the applicable corporate taxation system in Slovenia for that profit under CITA-2.
Multilateral instrument. On 22 March 2018, Slovenia ratified the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI), ef fective 1 July 2018. The MLI is designed to swiftly implement the tax treaty-related measures arising from the OECD Base Erosion and Profit Shifting project through the automatic modi fication of existing bilateral tax treaties. It implemented “mini mum standard” changes to existing treaties in the areas of treaty
abuse, mutual agreement procedures and treaty preambles. In addition, depending on the reservations and notifications made by each party, the MLI facilitates optional changes to modify tax treaties with respect to permanent establishments, transparent entities, residence tiebreakers, double tax relief, minimum share holding periods, capital gains derived from immovable property and a jurisdiction’s right to tax its own residents.
Hybrid mismatches and exit taxation. In light of the Base Erosion and Profit Shifting (BEPS) project and Directive 2016/1164/EU, the following two sets of rules were introduced into the Slovenian tax law, effective from 1 January 2020:
• Rules on exit taxation
• Rules on hybrid mismatches aimed at curbing tax avoidance practices that affect the tax base
The first set of rules determines a tax on the unrealized apprecia tion of assets gained in Slovenia; it taxes hidden reserves on the transfer of a business activity or assets from Slovenia to another country.
The second set of rules concerns the neutralization of effects in cases of hybrid mismatches between EU member states, as well as with third countries, arising from payments or alleged payments between the taxable person and related parties in different countries. Hybrid mismatches are the result of differences in the legal characterization of payments, financial instruments and similar items in cases of different legal and tax regimes. The rules provide adjustments in the determination of tax liabilities for such cases.
New provisions on reverse hybrid mismatches were introduced, effective from 1 January 2022.
Mandatory Disclosure Rules. On 22 June 2019, Slovenia imple mented the EU directive on the mandatory disclosure and exchange of cross-border tax arrangements (DAC 6). The rules implementing DAC 6 are effective from 1 July 2020; however, reports retroactively cover arrangements for which the first step was implemented between 25 June 2018 and 1 July 2020.
The deadline for (first) reporting on existing cross-border arrangements (implemented after 25 June 2018) is 28 February 2021. Any new arrangements must be reported within 30 days.
F. Treaty withholding tax rates
Most of Slovenia’s double tax treaties follow the OECD model convention. The following table shows the withholding tax rates under Slovenia’s tax treaties.
Dividends Interest Royalties
Albania
Bulgaria
Dividends Interest Royalties
% % %
5/10 (a) 5 (b) 5/10 (c)
Canada 5/15 (f) 0/10 (k) 10
China Mainland 5 10 10
Croatia 5 0/5 (b) 5
Cyprus 5 5 (t) 5
Czech Republic
5/15 (a) 0/5 (b) 10
Denmark 5/15 (a) 5 5
Estonia 5/15 (a) 0/10 (b) 10
Finland 5/15 (a) 0/5 (b) 5
France 0/15 (d) 5 (b) 5
Georgia 5 0/5 (s) 5
Germany 5/15 (a) 0/5 (b) 5
Greece 10 10 10
Hungary 5/15 (a) 0/5 (k) 5
Iceland 5/15 (a) 0/5 (b) 5 India 5/15 10 10 Iran 7 0/5 (ee) 5
Ireland 5/15 (hh) 0/5 (b) 5
Israel 5/10/15 (ii) 0/5 (b) 5
Italy 5/15 (a) 10 5 Japan 5/10 0/5 (gg) 5 Kazakhstan 5/15 (a) 10 10 Korea (South) 5/15 (a) 5 (b) 5 Kosovo 5/10 (cc) 0/5 (dd) 5 Kuwait 0/5 (v) 0/5 (w) 10
Latvia 5/15 (a) 0/10 (b) 10 Lithuania 5/15 (a) 0/10 (b) 10 Luxembourg 5/15 (a) 0/5 (b) 5 Malta 5/15 (g) 5 5 Moldova 5/10 5 5 Netherlands 5/15 (ll) 0/5 (b) 5
North Macedonia 5/15 (a) 10 10
Norway 0/15 (r) 0/5 (e) 5
Poland 5/15 (hh) 0/10 (b) 10 Portugal 5/15 (hh) 0/10 (b) 5
Qatar 5 5 5
Romania 5 0/5 (b) 5
Russian Federation 10 10 10 Serbia and Montenegro (n) 5/10 (hh) 0/10 (b) 5/10 (h)(j)
Singapore 5 0/5 (kk) 5
Slovak Republic 5/15 (jj) 10 10
Spain 5/15 (a) 0/5 (b) 5 Sweden 5/15 (a) 5 5 Switzerland 0/15 (z) 5 (aa) 0/5 (bb)
Thailand 10 0/10/15 (b)(i) 10/15 (j)
Turkey 10 0/10 (b) 10
Ukraine 5/15 (a) 5 5/10 (h)(j)
United Arab Emirates 0/5 (ff) 0/5 (l) 5
United Kingdom 0/15 (p) 0/5 (q) 5
United States 5/15 (a) 0/5 5
Uzbekistan 8 8 10
Non-treaty jurisdictions 15 15 15
(a) The lower rate applies if the recipient of the dividends is a company that holds at least 25% of the capital of the payer of the dividends.
(b) The 0% rate applies to interest paid to the government including local authorities or the national bank. In certain treaties, the 0% rate applies to interest paid to national export companies and other institutions, subject to additional conditions.
(c) The lower rate applies to royalties paid for the use of, or the right to use, the following:
• Copyrights of literary, artistic or scientific works (not including cinemato graphic works)
• Industrial, commercial or scientific equipment
(d) The 0% rate applies if the recipient of the dividends is a company that holds at least 20% of the capital of the payer of the dividends and (as modified by Paragraph 1 of Article 8 of the MLI) if this condition is met throughout a 365-day period that includes the day of the payment of the dividends (for the purpose of computing this period, no account is taken of changes of owner ship that directly results from a corporate reorganization, such as a merger or divisive reorganization, of the company that holds the shares or that pays the dividends).
(e) Interest arising in a contracting state and paid to the government of the other contracting state is exempt from tax in the state of the payer. In the case of Slovenia, interest arising in Norway and paid with respect to a loan guaran teed or insured by Slovene Export and Development Bank Inc., Ljubljana on account of the Republic of Slovenia as authorized in accordance with the domestic law is exempt from tax in Norway.
(f) For dividends paid by Slovenian companies, the 5% rate applies if the recipi ent of dividends holds at least 25% of the capital of the payer of the dividends. The 15% rate applies to other dividends paid by Slovenian companies. For dividends paid by Canadian companies, the 5% rate applies if the recipient of dividends holds at least 10% of the voting power of the payer of the divi dends. The 15% rate applies to other dividends paid by Canadian companies.
(g) For dividends paid by Slovenian companies, the 5% rate applies if the recipi ent of dividends owns at least 25% of the capital of the payer of the dividends. The 15% rate applies to other dividends paid by Slovenian companies. For dividends paid by Maltese companies to Slovenian resident beneficiaries, the withholding tax rate may not exceed the tax imposed on the profits out of which dividends are paid.
(h) The 5% rate applies to royalties for the use of, or the right to use, copyrights of literary, artistic or scientific works, including cinematographic works, and films or tapes used for radio or television broadcasting.
(i) The 10% rate applies to interest paid to financial institutions, including insur ance companies.
(j) The 10% rate applies to royalties paid for the following:
• The use of, or the right to use, copyrights of literary or artistic works, including motion pictures, live broadcasting, films and tapes
• Other means for use or reproduction in connection with radio and televi sion broadcasting
• The use of, or the right to use, industrial, commercial or scientific equipment
(k) Subject to additional conditions, the 0% rate applies to the following:
• Interest paid with respect to indebtedness of the government or local authorities
• Interest paid to an entity that was established and operates exclusively to administer or provide benefits under pension, retirement or other employee benefit plans
Interest arising in Slovenia (Canada) and paid to a resident of Canada (Slovenia) is taxable only in Canada (Slovenia) if it is paid with respect to loans made, guaranteed or insured by the Export Development Corporation (Slovenian Export Company).
(l) Interest paid by a company that is a resident of a contracting state is taxable only in the other contracting state if the beneficial owner of the interest is one of the following:
The other state
Political subdivision
Local government
Local authority
Central bank
pension fund
Abu Dhabi Investment Authority
Abu Dhabi Investment Council
Emirates Investment Authority
• Mubadala Development Company
• International Petroleum Investment Company
• Dubai World
• Investment Corporation of Dubai
• Any other institution created by the government, a political subdivision, a local authority or a local government of that other state that is recognized as an integral part of that government, as agreed through an exchange of letters by the competent authorities of the contracting states
Interest arising in the United Arab Emirates and paid on a loan guaranteed or insured by the Slovenian Export and Development Bank (Slovenska Izvozna in Razvojna Banka, or SID Bank) Inc. Ljubljana, on behalf of the Republic of Slovenia as authorized by the domestic law is exempt from tax in the United Arab Emirates.
(m) The 0% applies if any of the following circumstances exists:
• The interest is paid to the government including local authorities or the national bank.
• The payer of the interest is the government including local authorities or the national bank.
• The interest is paid with respect to a loan made, approved, guaranteed or insured by an institution that is authorized under internal law to act as an export financing institution on behalf of the contracting state.
(n) The tax treaty between Slovenia and the former Union of Serbia and Montenegro is expected to continue to apply to the republics of Serbia and Montenegro. The treaty does not apply to Kosovo.
(o) The 5% rate applies if the recipient of the dividends is a company that holds at least 10% of the capital of the payer of the dividends.
(p) The 0% rate applies if the recipient of dividends owns more than 20% of the capital voting rights of the payer of the dividends.
(q) The 0% rate applies if either of the following circumstances exists:
• The interest is paid to the government including local authorities or the national bank.
• The payer and the recipient are both companies and one of the companies owns directly at least 20% of the capital of the other company, or a third company that is a resident of a contracting state holds directly at least 20% of the capital of both the payer company and the recipient company.
(r) The 0% rate applies if any of the following circumstances exists:
• The recipient of dividends owns more than 15% of the capital voting rights of the payer of the dividends (see last sentence of second bullet below).
• In the case of Norway, the beneficial owner of the dividends is a resident of Norway who is a partner in a Norwegian partnership and alone or together with the other partners holds directly at least 15% of the capital of the company paying the dividends. As modified by Paragraph 1 of Article 8 of the MLI, the conditions stated in this bullet and in the first bullet above must be met throughout a 365-day period that includes the date of the pay ment of the dividends (for the purpose of computing this period, no account is taken of changes of ownership that would directly result from a corporate reorganization, such as a merger or divisive reorganization, of the company that holds the shares or that pays the dividends).
• The dividends are derived and beneficially owned by the government of a contracting state.
(s) A 0% rate applies if any of the following circumstances exists:
• The payer of the interest is the government of a contracting state, political subdivision, local authority or central bank of such state.
• The interest is paid to the government of the other contracting state or a political subdivision, local authority or central bank of such state.
• The interest is paid with respect to a loan made, approved, guaranteed or insured by an institution that is authorized in accordance with internal law on insurance and financing of international business transactions.
(t) A 0% rate applies if either of the following circumstances exists:
• The payer of the interest is the government of a contracting state, or a political subdivision, local authority or central bank of such state.
• The interest is paid to the government of the other contracting state or a political subdivision, local authority or central bank of such state.
(u) The lower rate applies to royalties paid for the use, or the right to use, patents, patterns, models, plans, and secret formulas or procedures or for information regarding industrial, commercial or scientific experience.
(v) The 0% rate applies if the beneficial owner of the income is a resident of the other contracting state and is one of the following:
• The government of that contracting state or a political subdivision or local authority thereof or the central bank
• A governmental institution created in that contracting state under public law such as a corporation, fund, authority, foundation, agency or similar entity
• An entity established in that contracting state, all the capital of which has been provided by that contracting state or a political subdivision or local authority thereof or any governmental institution mentioned in the bullet above together with other states
(w) A 0% rate applies if the beneficial owner of the interest is a resident of the other contracting state and is one of the following:
• The government of that contracting state, a political subdivision or local authority thereof or the central bank
• A governmental institution created in that contracting state under public law such as a corporation, fund, authority, foundation, agency or similar entity
• An entity established in that contracting state, all the capital of which has been provided by that contracting state or a political subdivision or local authority thereof or a governmental institution as defined in the bullet above, together with other states
(x) A 0% rate applies if any of the following circumstances exists:
• The payer of the interest is the government of that contracting state or an administrative-territorial or political subdivision or a local authority or the central bank.
• The interest is paid to the government of the other contracting state or an administrative-territorial or political subdivision or a local authority or the central bank.
• The interest is paid with respect to a loan made, approved, guaranteed or insured, on behalf of the Republic of Slovenia, by the Slovenian Export and Development Bank (Slovenska Izvozna in Razvojna Banka, or SID Bank) Inc. Ljubljana, which is authorized under the domestic legislation of the Republic of Slovenia for insuring and financing international business transactions.
• The interest is paid to the State Oil Fund of the Republic of Azerbaijan. (y) The lower rate applies to royalties paid for the use of, or the right use, com puter software, patents, designs or models, plans, secret formulas or processes, or for information concerning industrial, commercial or scientific experience. (z) A 0 % rate applies if the beneficial owner of the dividends is one of the fol lowing:
• A company (other than a partnership) that is a resident of the other contract ing state and that holds directly at least 25% of the capital in the company paying the dividends
• A pension scheme (aa) Interest arising in a contracting state and paid to a resident of the other con tracting state that is the beneficial owner of the interest is taxable only in that other state to if any of the following circumstances exist:
• It is paid by the government of a contracting state, a political subdivision, a local authority or the central bank.
• It is paid to the government of a contracting state, a political subdivision, a local authority or the central bank.
• It is paid with respect to a loan made, approved, guaranteed or insured by an institution that is authorized in accordance with internal law to insure and finance international business transactions.
• It is paid with respect to indebtedness arising as a result of the sale on credit of equipment, merchandise or services.
• It is paid by a bank to a bank of the other contracting state.
• It is paid by a company to a company of the other contracting state if the recipient company is affiliated with the company paying the interest by a direct minimum holding of 25% in the capital or if both companies are held by a third company that is resident of an EU member state or Switzerland and that has directly a minimum holding of 25% in the capital of the first company and in the capital of the second company.
(bb) Royalties paid by a company that is a resident of a contracting state to a resident of the other contracting state is taxable in only the other state if the beneficial owner is a company that is affiliated with the company paying the royalties by a direct minimum holding of 25% in the capital or if both com panies are held by a third company that is resident of an EU member state or Switzerland and that has directly a minimum holding of 25% in the capi tal of the first company and in the capital of the second company.
(cc) The lower rate applies if the beneficial owner is a company (other than a partnership) that holds directly at least 10% of the capital of the company paying the dividends.
(dd) A 0% rate applies if any of the following circumstances exists:
• The payer of the interest is the government of that contracting state or a political subdivision, local authority or the central bank.
• The interest is paid to the government of the other contracting state or a political subdivision, local authority or the central bank.
• The interest is paid with respect to a loan made, approved, guaranteed or insured by an institution of the other contacting state on behalf of that state as authorized by a special domestic law on insuring and financing of inter national business transactions.
(ee) Interest arising in a contracting state and paid to a resident of the other contracting state that is the beneficial owner of the interest is taxable only in that other state if any of the following circumstances exists:
• The interest is paid the government of the other contracting state, a politi cal subdivision or a local authority thereof, or to the central bank of the other contracting state.
• The interest is paid in connection with the sale on credit of industrial, commercial or scientific equipment.
• The interest is paid in connection with the sale on credit of merchandise by one enterprise to another enterprise.
(ff) Dividends paid by a company that is a resident of a contracting state is tax able only in the other contracting state if the beneficial owner of the divi dends is one of the following:
• The other state
• Political subdivision
• Local government
• Local authority
• Central bank
• Recognized pension fund
• Abu Dhabi Investment Authority
• Abu Dhabi Investment Council
• Emirates Investment Authority
• Mubadala Development Company
• International Petroleum Investment Company
• Dubai World
• Investment Corporation of Dubai
• Any other institution created by the government, a political subdivision, a local authority or a local government of the other state that is recognized as an integral part of that government as agreed through an exchange of letters by the competent authorities of the contracting states
(gg) The 0% rate applies to interest paid to the government, including local authorities, or the national bank. The 0% rate also applies to interest paid to a resident of the other contracting state with respect to debt claims guaranteed, insured or indirectly financed by any institution promoting exports, investment or development.
(hh) The lower rate applies if the recipient of the dividends is a company that holds at least 25% of the capital of the payer of the dividends and (as modi fied by Paragraph 1 of Article 8 of the MLI) if this condition is met through out a 365-day period that includes the date of the payment of the dividends (for the purpose of computing this period, no account is taken of changes of ownership that would directly result from a corporate reorganization, such as a merger or divisive reorganization, of the company that holds the shares or that pays the dividends).
(ii) The 5% rate applies (as modified by Paragraph 1 of Article 8 of the MLI) if the beneficial owner is a company (other than a partnership) that holds directly at least 10% of the capital of the company paying the dividends. The 10% rate applies (as modified by Paragraph 1 of Article 8 of the MLI) if the following conditions are met:
• The beneficial owner is a company that holds directly at least 10% of the capital of the company paying the dividends and the dividends are paid out of profits that by virtue of the law of the state in which the payer is a resident are exempt from company tax or subject to company tax at a rate that is lower than the normal rate in that state.
• The above condition is met throughout a 365-day period that includes the date of the payment of the dividends (for the purpose of computing this period, no account is taken of changes of ownership that would directly result from a corporate reorganization, such as a merger or divisive reor ganization, of the company that holds the shares or that pays the divi dends).
(jj) The 5% rate applies (as modified by Paragraph 1 of Article 8 of the MLI) if the beneficial owner is a company that holds directly at least 25% of the capital of the company paying the dividends. The 5% rate also applies (as modified by Paragraph 1 of Article 8 of the MLI), in the case of a Slovak partnership, if the beneficial owner is a company resident in the Slovak Republic that is a partner in a Slovak partnership that alone holds directly at
least 25% of the capital of the company paying the dividends and if this condition is met throughout a 365-day period that includes the date of the payment of the dividends (for the purpose of computing that period, no account is taken of changes of ownership that would directly result from a corporate reorganization, such as a merger or divisive reorganization, of the company that holds the shares or that pays the dividends).
(kk) Interest arising in a contracting state and paid to the government of the other contracting state is exempt from tax in the first-mentioned state. In the case of Slovenia, interest arising in Singapore and paid in consideration of a loan guaranteed or insured by Slovene Export and Development Bank Inc., Ljubljana on account of the Republic of Slovenia, as authorized in accor dance with the domestic law, is exempt from tax in Singapore.
(ll) The lower rate applies if the recipient of the dividends is a company that holds at least 10% of the capital of the payer of the dividends and (as modi fied by Paragraph 1 of Article 8 of the MLI) if this condition is met through out a 365-day period that includes the date of the payment of the dividends (for the purpose of computing this period, no account is taken of changes of ownership that would directly result from a corporate reorganization, such as a merger or divisive reorganization, of the company that holds the shares or that pays the dividends).
Slovenia has ratified double tax treaties with Egypt and Morocco, but these treaties are not yet effective.