taxation of non-residents in slovenia detailed description · taxation of non-residents in slovenia...
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REPUBLIC OF SLOVENIA MINISTRY OF FINANCE
FINANCIAL ADMINISTRATION OF THE REPUBLIC OF SLOVENIA
Šmartinska cesta 55, PO Box 631, 1001 Ljubljana, Slovenia T: +386 1 478 38 00
F: +386 1 478 39 00
www.fu.gov.si
INTERNATIONAL TAXATION
Taxation of non-residents in Slovenia
Detailed description
1ST version, AUGUST 2016
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TABLE OF CONTENTS
1. INDIVIDUALS ....................................................................................................................... 3 1.1 Non-resident of Slovenia .............................................................................................. 3
1.2 Source in Slovenia ......................................................................................................... 3
1.3 Coming to work in Slovenia .......................................................................................... 4
1.4 Coming to Slovenia to study ......................................................................................... 4
1.5 Coming to Slovenia after retirement ............................................................................ 5
1.6 Non-residents income - exemptions ............................................................................. 5
1.7 Relief for residents of EU Member States or EEA ......................................................... 6
1.8 Non-submission of tax number for non-residents (exception) .................................... 7
1.9 How is personal income tax paid for non-residents ..................................................... 7
1.10 The benefits under the Double Taxation Conventions ............................................... 7
1.11 Issue of confirmation of tax paid ................................................................................ 8
1.12. Non-resident taxation - other taxes ........................................................................... 8
1.13. Social security contributions ...................................................................................... 8
2. ENTERPRISES .................................................................................................................... 9 2.1 Corporation Income Tax ............................................................................................... 9
2.2 Withholding tax ........................................................................................................... 10
2.3 Taxation of the business unit (BU) or a permanent establishment (PE) of foreign
enterprises in Slovenia ...................................................................................................... 12
2.4 Taxation of the business unit (BU) or a permanent establishment (PE) of foreign
enterprises under the provisions of the international treaties on avoidance of double
taxation of income (DTA) .................................................................................................. 13
2.5 Examples of business activity in Slovenia ................................................................... 13
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1. INDIVIDUALS
1.1 Non-resident of Slovenia
The following persons are deemed non-residents:
• persons not resident in Slovenia, i.e. those who do not have permanent residence in
Slovenia, whose center of economic and personal interest is not Slovenia, and who are
present in Slovenia for less than 183 days in any individual tax year,
• persons with diplomatic or consular status of a foreign country in Slovenia,
• persons working as employees or officials of international institution,
• persons in Slovenia as a result of employment at a diplomatic office, consulate or
international mission of a third country,
• employees of institutions of the European Communities, European Central Bank or
European Investment Bank in Slovenia,
• persons employed in Slovenia as foreign experts in work for which Slovenia lacks
sufficient qualified personnel (approval required from the Slovenian tax authority),
• persons living in Slovenia exclusively for the purposes of study or treatment.
Non-residents are only liable to pay personal income tax on income whose source is in
Slovenia.
Further information about the residency status of a person can be found in FAQ - Residency
status.
1.2 Source in Slovenia
Income is deemed to have a source in Slovenia as follows:
• if employment is served or services are provided in Slovenia,
• if the income is paid by a Slovenian resident (a Slovenian legal entity or private
individual) or a business unit of a non-resident (a business unit of a foreign legal entity
in Slovenia),
• if the non-resident pursues business activities at or via a business unit or permanent
establishment in Slovenia,
• income from real estate and rights on real estate in Slovenia, including the capital gains
from the disposal of the real estate,
• income from securities and equity issued by the Republic of Slovenia, the Bank of
Slovenia, local authorities, companies, cooperatives, etc. established in Slovenia,
including the capital gains generated by the disposal of such.
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1.3 Coming to work in Slovenia
When you come to Slovenia to work, it is important to know:
A natural person with permanent or temporary residence in the Republic of Slovenia shall be
registered in the tax register ex officio by the financial office on the basis of data from the
Central Population Register. If the Central Population Register does not contain all information necessary for entry into the
tax register, tax authorities ask the natural person to submit the missing information in eight
days.
A foreign natural person, who achieves taxable income or is the owner of taxable movable or
immovable property in the Republic of Slovenia, shall submit the application for entry of the
individual into the tax register a form DR-02.
The application shall be submitted before the first receipt of taxable income or before the first
acquisition of ownership of taxable movable or immovable property.
As the rule, the application shall be submitted to the competent tax office (local branch office)
for the payer of incomes (exemptions are General Financial Office and Special Financial Office).
When the payer of incomes has no seat in Slovenia, the application shall be submitted to the
financial office competent for the territory where the income is planned to be achieved.
If there are more payers of incomes or if the income is planned to be achieved on the territory of
several financial offices, the foreign individual shall submit the application to the financial office,
competent for the payer/territory of first income.
If a you only come to Slovenia to work for a short period of time (less than six months), you are
considered to be a non-resident of Slovenia, and stay resident of a country, where you
previously worked or lived, unless you establish residential ties (e.g. habitual abode or the
centre of vital interests) in Slovenia prior to the expiration of those six months. After six months,
it is important to settle your residency status by either going to the local offices of the Financial
Administration and filling in the Questionnaire: Determination of residency status – entering the
Republic of Slovenia or downloading the questionnaire from the previously mentioned link. The
questionnaire is not mandatory; you can simply file an application for the determination of your
residency status.
More information can be found in section Questions & Answers.
1.4 Coming to Slovenia to study
When a person come to Slovenia to study, it is important to know:
If you are a foreign student, coming to Slovenia, you are, according to the Article 7 of the
Slovenian Personal Income Tax Act, a non-resident of Slovenia, if you are coming to Slovenia
for the sole purpose of study. In case you are coming to Slovenia to study and work (more than
is needed for your life expenses as a student), you will also stay a non-resident for the first six
months, unless you establish residential ties (e.g. habitual abode or the centre of vital interests)
in Slovenia prior to the expiration of those six months. After six months, it is important to settle
your residency status by going to the local office of the Financial Administration and filling in the
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Questionnaire: Determination of residency status – entering the Republic of Slovenia. The
questionnaire is not mandatory; you can simply file an application for the determination of
residency status.
If you are, as a foreign student, planning to work in Slovenia, you have to obtain a tax number
(for the purposes of receiving your earned income), which you get at the competent local office
of the Financial Administration. You have to fill in a form DR-02.
More information about tax numbers for foreign individuals can be found here.
More information about taxation of student’s remuneration can be found in section Questions &
Answers.
1.5 Coming to Slovenia after retirement There are a lot of situations, where people, who used to be residents of Slovenia, went abroad,
lived and worked there for several years and therefore became non-residents of Slovenia. After
retirement they are coming back to Slovenia. The following explanation also applies to people,
who were never residents of Slovenia, but they decided they want to enjoy their retirement here.
They both need to settle their residency status by both going to the competent tax office (local
branch office) and filling in the questionnaire: Questionnaire: Determination of residency status
– entering the Republic of Slovenia or downloading the questionnaire from the previously
mentioned link.
The questionnaire is not mandatory; they can simply file an application for the determination of
their residency status.
If they are indeed planning to stay in Slovenia and they will establish residential ties here, they
will be considered as Slovenian residents.
Determination of tax residency for people receiving pensions from foreign countries is of high
importance. Most Double Taxation Agreements (DTA) stipulate that pensions shall be taxable
only in the state of residency of the person receiving such a pension. Therefore, if a person
decides to permanently live in Slovenia, receives pension from a foreign country and is a
resident of that country (existence of DTA with that country), she or he has to settle her/his
residential status according to the new circumstances, so they can be taxed in the country,
where they newly established residential ties (Slovenia).
More information can be found in section Questions & Answers.
1.6 Non-residents income - exemptions
Non-residents are exempted from paying personal income tax on:
• capital gains, provided that the source of the capital gain is in Slovenia (the issuer of the
security is the Slovenian government, the Bank of Slovenia or a company established in
Slovenia), and the security or equity disposed of by the non-resident is not part of a dominant
equity holding,
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• residents of EU Member States do not pay personal income tax on income from savings in the
form of interest payments (in accordance with the EU Savings Tax Directive1 whose source is in
Slovenia, provided that they are the beneficial owner of the aforementioned income,
• non-residents do not pay personal income tax on income from employment received for work
at a foreign diplomatic or consular office, an international institution in Slovenia, or an EU
institution in Slovenia,
• non-residents do not pay personal income tax on income earned by the pursuit of business
activities (with the exception of income from appearing as a performer or athlete), provided that
the business activity is not pursued via a business unit in Slovenia, and they are present in
Slovenia for less than 183 days in any period of 12 months, and under the further condition that
it is not income on which withholding tax is levied (in accordance with the law governing
corporate income tax, withholding tax is charged on income if the taxpayer earns the income
pursuant to the Personal Income Tax Act as part of the pursuit of business activities;
withholding tax is also charged on payments earned by the taxpayer as part of the pursuit of the
business activity of appearing as a performer or athlete),
• non-residents do not pay personal income tax on interest from securities, issued by the
Republic of Slovenia on the basis of the act, which arranges public finance,
• non-residents do not pay personal income tax on interest from debt securities, issued by
companies, established under regulations in Slovenia, on condition that debt securities not
contain an option of exchange for holding equities and they be included into trade on the
organised market or traded within the multilateral trade system in an EU Member State or
OECD Member State, except for debt securities, issued for payment of indemnity under the act,
which arranges denationalization.
1.7 Relief for residents of EU Member States or EEA
Individuals residents in EU Member States or EEA may claim the general relief, personal relief,
special personal relief for residents, who independently perform a specialized profession in the
field of cultural activity, or a profession of a journalist or an athlete, a relief for supplementary
pension insurance and a special relief for dependents in the annual personal income tax
declaration, should they submit one, provided that they demonstrate that their income earned in
Slovenia from employment or from the pursuit of business activities or basic agricultural and
forestry activities or incomes from renting property and transfer of property rights and other
incomes, constitutes at least 90% of their taxable income in the tax year, and if they prove that
in the residence state incomes, achieved in Slovenia, are excluded from taxation or they are not
taxed.
With the purpose of exercising the above-mentioned relief residents of EU Member States or
EEA shall enclose the completed "EU/EEA – Tax relief application", certified by a foreign tax
authority, with the annual declaration for assessment of personal income tax.
1 Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments, OJ L 157 of 26 June 2003.
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1.8 Non-submission of tax number for non-residents (exception)
There is no need to submit a tax number to the income payer prior to the payment of income to
a non-resident who earns only occasional income in Slovenia, and does not have a Slovenian
tax number. In such instances the Slovenian payer must obtain the non-resident’s name,
address, identification number and country of residence.
1.9 How is personal income tax paid for non-residents
Personal income tax is paid on all payments to foreign individuals during the year. The personal
income tax prepayment is considered a non-resident´s final tax.
If the income is being paid to the non-resident by a Slovenian legal entity or sole trader, the
latter withholds the personal income tax for the non-resident. If the income is being paid by a
person who is not a taxpayer in Slovenia (e.g. a foreign payer), the recipient must declare the
income for the personal income tax prepayment to be made in Slovenia. (Forms for declaration
of assessment of personal income tax prepayment on individual types of income).
Income from employment is generally taxed in the country where the employment is served.
Non-residents who earn income from employment paid by a foreign legal entity that is not a
taxpayer in Slovenia submit the form for the declaration for the prepayment of personal income
tax on the employment income to the relevant tax office.
Non-residents who earn income from other contractual relationships that is paid by a Slovenian
legal entity or sole trader may lodge a request with the relevant tax office for a reduction in the
taxable base on income from employment (from another contractual relationship) for transport
and accommodation costs. As the personal income tax prepayment is reduced as a result of the
actual costs claimed and recognised, the tax authority issues a ruling refunding the non-resident
for the tax paid in excess.
1.10 The benefits under the Double Taxation Conventions
The following benefits can be claimed as a result of double taxation conventions by foreign
individuals (non-residents) earning income in Slovenia:
• non-taxation in the source country (Slovenia), where the double taxation convention
confers the right of taxation solely in the country where the income recipient is based,
• taxation in the source country (Slovenia) at a lower rate, which usually arises on three
types of income: dividends, interest and property rights; the rate ranges from 5% to
15%.
Non-residents have two possibilities for claiming the benefits that they enjoy under double
taxation conventions taxed at source in Slovenia:
• a reduction or exemption in the payment of tax, if under the double taxation convention
the income is taxed at a lower rate or is exempt from tax in Slovenia. The non-resident
income recipient must submit a claim to the taxpayer (the Slovenian payer) before the
income is paid. Only when the claim has been approved and received from the tax
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authority the taxpayer can pay the income and charge tax at a lower rate, or not
calculate and withhold tax on the income,
• a refund of tax paid in excess: if the taxpayer (the Slovenian payer) has charged tax at
higher rates irrespective of the benefits set out by double taxation convention, the non-
resident income recipient can request a refund of the tax. If tax has been charged on
income that under the double taxation convention is exempt from taxation, the full
amount of the tax paid is refunded to the income recipient.
Non-residents can claim benefits on forms for claiming the benefits of double taxation
conventions, there being a claim form defined for each type of income.
1.11 Issue of confirmation of tax paid The tax authority in Slovenia issues confirmation of tax paid in a particular tax year to non-
residents at their request. The confirmation serves non-residents as the basis for claiming the
deduction of tax paid in Slovenia, or exemption from the payment of tax in the country of
residence.
Request for issuing the certificate on paid tax in the Republic of Slovenia
1.12. Non-resident taxation - other taxes
On 1 January 2014, a new estate tax was introduced. This tax was annulled by the
Constitutional Court on 31 March 2014. A former real estate taxes and duties, which applied
before 1 January 2014 were reinstated.
Foreigners owning real estate in Slovenia are liable to pay property tax in accordance with the
civil tax act (private individuals only), and the building land use charge (legal entities and private
individuals) in accordance with the building land act and municipal ordinances on the building
land use charge.
Foreign owners who sell real estate are liable to pay real estate sales tax in accordance with the
real estate sales tax act.
Non-residents (both legal entities and private individuals) also pay boat tax vessels under the
aquatic vessels tax act and act on balancing public finances. Foreign owners of boats are
obliged to pay this tax on boats more than 5 m in length that are entered in the boat register in
Slovenia.
More information about taxation of non-residents, vat refund when leaving Slovenia and
distance selling is available in a detail description International taxation – general explanations.
1.13. Social security contributions
Employees in an employment contract with their employer situated in Slovenia are required to
pay social security contributions in Slovenia regardless of their tax residency status, if they are
required to integrate into the social security system of Slovenia. This depends on EU Social
Security Coordination rules for workers from EU Member States and on bilateral treaties on the
social security for workers from other counties. Social security system in Slovenia consists of 5
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types of compulsory social security contributions instituted by the Social Security Contributions
Act.
The types and the rates of contributions the employees and the employers are required to pay
can be found in the following table:
Type of Social Security
Contribution
Employee’s rate Employer’s rate
Pension and Disability
Insurance
15,50 % 8,85 %
Health Insurance 6,36 % 6,56 %
Insurance for Parental
Protection
0,10 % 0,10 %
Unemployment Insurance 0,14 % 0,06 %
Injury and Illness Insurance 0,53 %
Total Amounts 22,10 % 16,10 %
2. ENTERPRISES 2.1 Corporation Income Tax According to the provisions of the Article 3 of the Corporate Income Tax Act taxpayers shall be
legal entities of domestic and foreign law. A taxpayer shall also be a company and/or any
association of persons (partnerships and other corporate forms, investment funds etc. as
residents), including a civil law company subject to foreign law, which does not have legal
personality and is not considered a taxpayer subject to the personal income tax.
A resident shall be a taxpayer who meets on of the following conditions:
- the residents registered office is located in Slovenia;
- the residents place of effective management is located in Slovenia.
A non-resident shall be a taxpayer who meets neither of the above mentioned conditions.
Subsidiaries of a foreign legal entity in Slovenia are under the provision of the Corporate
Income Tax Act considered as a resident of Slovenia and liable to corporation income tax.
Foreign enterprise that performs business activities in Slovenia through a branch or in any other
similar way is a non-resident of Slovenia. According to the Article 4 of the Corporate Income
Tax Act non-residents are only taxed on Slovenian source income. Income of a foreign
enterprise or a sole entrepreneur/self-employed person has a Slovenian source when its
business is carried on in or through a business unit (BU) of a non-resident (permanent
establishment - PE) situated in Slovenia. As a consequence only income that a foreign
enterprise (non-resident) earns through or in a business unit situated in Slovenia is taxed in
Slovenia. Foreign enterprise is also taxed in Slovenia on the types of income that are subject to
withholding tax.
According to Article 6 of the Corporate Income Tax Act a business unit of a non-resident (BU)
for tax purposes is defined as a fixed place of business through which the business of a foreign
enterprise is wholly or partly carried on in Slovenia.
The term BU or PE as defined above includes primarily:
an office, a branch, a factory, a workshop, a mine, a quarry or other place of extraction
of natural resources
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a building site or construction and assembly project including the supervision and
counselling activities connected with it, if it exists for more than 12 months counting
from the date of the start of auxiliary and preliminary works.
Apart from that, BU also includes a person (natural or legal) acting in Slovenia on behalf of the
foreign enterprise if they have, and habitually exercise in Slovenia, an authority to conclude
contracts in the name of that foreign enterprise, unless their activities are limited only to the
purchase of goods or merchandise for that enterprise.
BU would also include brokers, general commission agents or any other agents of an
independent status carrying on their own business if a foreign enterprise partly or wholly carried
on business in Slovenia through them and if the relationship between the foreign enterprise and
the agent were not the one between two independent market participants or two associated
enterprises.
2.2 Withholding tax Withholding tax in Slovenia is imposed on certain amounts and types of corporate or business
income with the Slovenian source paid to non-residents.
According to the Article 70 of the Corporate Income Tax Act the tax shall be calculated, withheld
and paid at the rate of 15% on the income of residents and non-residents – other than dividends
and income similar to dividends paid through a non-resident’s BU located in Slovenia – whose
source is in Slovenia, i.e.:
Dividends and income similar to dividends. Income similar to dividends shall be
considered hidden profit distribution made to a person who directly or indirectly holds at
least 25% of the value or number of shares or holdings in the capital, management or
control of the payer or controls the payer on the basis of a contract or in a manner
different from relations between non-associated enterprises. Hidden profit distribution
shall be any fee guaranteed by the payer to the person referred to in the preceding
sentence, especially the provision of all forms of assets and provision of services,
including release from a debt, without payment or at a price lower than the comparable
market price, or payment for the purchase of all forms of assets and services at a price
higher than the comparable market price or payment for assets and services where
assets were not acquired or services were not provided. The tax shall not be calculated,
withdrawn and paid on income which is paid to a non-resident, who is resident of the
EU and/or EEA member states other than Slovenia, and is a person liable for tax on
income in the country of residence, on the condition that this is not an income paid to a
BU of that non-resident in Slovenia and if that non-resident cannot claim the tax in the
country of residence, as he or she for example claims exemptions of dividends from the
tax base, and the purpose of the transaction is not tax avoidance.
Interest, except interest accrued from loans to the Republic of Slovenia or to authorized
agencies responsible for financing international business for which Slovenia provides
guarantees and bonds issued by the Republic of Slovenia or by the same authorized
agencies and except interest paid by banks unless the banks pay interest to persons or
entities in countries (non-EU Members) with the general or average nominal profit tax
rate of less than 12.5%. The list published by the Ministry of Finance of the Republic of
Slovenia and the Financial Administration of Slovenia can be found in the FAQ -
Taxation of the foreign enterprises – Withholding tax (Answer no. 6).
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Royalties, which means payments received as a consideration for the use of, or the
right to use of copyright, patents, trademarks, designs or models, plans, secret formulas
or processes or information on industrial, commercial or scientific experience
Rents received from real estate in Slovenia
Payments for performance of artistes and sportswomen or sportsmen when they
receive them through an intermediary entity
Payments for consulting, marketing, market research, services in the fields of human
resources management, administration, information technology and legal services
provided to a person or entity with a registered seat or a place of effective management
in a country with the general average nominal profit tax rate of less than 12.5%. The list
published by the Ministry of Finance of the Republic of Slovenia and the Financial
Administration of Slovenia can be found in the FAQ - Taxation of the foreign enterprises
– Withholding tax (Answer no. 6).
When the payment is made to non-residents of countries with which Slovenia has concluded the
International treaty on avoidance of double taxation of income, non-residents have two
possibilities for claiming the benefits that they enjoy under International treaty on avoidance of
double taxation of income for earning income, taxed at source in Slovenia:
reduction or exemption of tax deduction payment,
refund of tax deducted.
Non-residents can submit to the tax payer a completed appropriate request for a reduction or
exemption from the tax which they would otherwise pay in compliance with Slovene taxation law
before the payment.
If a taxpayer has not acted in compliance with Article 260 of the Tax Procedure Act and
irrespective of the privileges provided by international treaty has accounted tax at rates that are
provided by taxation law or Tax Procedure Act and in consequence of this a higher amount of
tax was paid than would have been paid in compliance with the international treaty, the recipient
of income may request a refund of tax, representing the difference between the amount of tax
was accounted by use of the rate provided by taxation law or Tax Procedure Act, and the
amount of tax that would have been accounted by use of the tax rate provided by the
international treaty.
The appropriate forms i.e. special tax forms for claiming verification of treaty entitlement or
claiming tax refunds have been published.
More information about claiming benefits under applicable international treaties on avoidance of
double taxation of income is available in FAQ – Claiming privileges from international treaties
on avoidance of double taxation of income.
Tax Procedure Act in Article 373 and 374 determines a person or entity that has the status of
the payer of tax according to Article 58 of the Tax Procedure Act to be responsible to calculate
and deduct the tax at the time of the calculation and payment of income. The payer of tax has to
remit the tax by filing the ODO-1 Form with the competent tax authority at the moment when the
income is credited to the recipient.
In the case income is credited to self-employed persons the responsibility of withholding the tax
is determined by Article 68 of the Personal Income Tax Act. Article 305 of the Tax Procedure
Act in this case also confers the task of withholding the tax to the payer of tax at the moment 15
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% when the income is paid to the recipient. At the time of remittance the payer of tax files the
REK Form to the competent tax authority.
The tax shall not be calculated, withheld and paid on the income referred to in the first
paragraph of the Article 70 of the Corporate Income Tax Act which is paid to Slovenia or a local
authority in Slovenia, the Bank of Slovenia, a resident taxpayer who has notified the payer of
his/her tax number and a non-resident taxpayer liable for the tax on income obtained by
performing activities in or through a business unit in Slovenia and who has informed the payer
about his tax number, provided the income was paid to that business unit.
According to the third paragraph of the Article 70 of the Corporate Income Tax Act the tax shall
not be calculated, withdrawn and paid on income referred to in point 1 of the first paragraph of
Article 70 of the Corporate Income Tax Act which is paid to a non-resident, who is resident of
the EU and/or EEA member states other than Slovenia, and is a person liable for tax on income
in the country of residence, on the condition that this is not an income paid to a business unit of
that non-resident in Slovenia and if that non-resident cannot claim the tax under the first
paragraph of this Article in the country of residence, as he or she for example claims
exemptions of dividends from the tax base, and the purpose of the transaction is not tax
avoidance.
There are also some exceptions which are mostly related to the EU Parent-Subsidiary Directive
and to the EU Interest and Royalties Directive that seek to ensure equal tax treatment of
transactions of dividends, interest and royalties within a Member State and transactions of
dividends, interest and royalties between different Member States in the EU thereby enforcing
the effective operation of the single market. More information is available in the FAQ - Taxation
of the foreign enterprises - Withholding tax.
2.3 Taxation of the business unit (BU) or a permanent establishment (PE) of foreign enterprises in Slovenia Tax liabilities of the foreign enterprise carrying on its business activities through or in the
business unit of a non-resident in Slovenia can be summarized in the following points:
Corporate Income Tax in Slovenia is paid through the Corporate Income Tax Return at
the rate of 19 %.The return has to be filed with the competent tax authority in 3 months
from the beginning of the current tax year for the previous tax year (usually 31st of
March when the tax year is the same as the calendar year). Different deadlines are in
place for taxpayers in special circumstances like bankruptcy procedure, mergers,
acquisitions, closure of business etc.
Tax year is the same as the calendar year by default, but the taxpayers may choose a
different tax year that coincides with their business year. This is done by a written
request to the tax authority at least 45 days before the date of the new tax year. A new
business has to notify the competent tax authority about the different tax year 8 days
after the registration in Slovenia. The tax authority confirms a different tax year to the
taxpayer by a written statement in 15 days.
The taxpayers are required to pay advance tax payments during the year. They are
calculated on the basis of the tax return of the previous tax year for the current tax year.
They are paid monthly (if the amount of the payment is more than 400 euros) or in
three-month period instalments (if the amount of the payment is less than 400 euros).
They are due on the 10th day after the period. When the taxpayer starts carrying on
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business in Slovenia it has to calculate the advance tax payment on the basis of the
planned tax return filed with the competent tax authority in 8 days after the registration
in Slovenia. The amount of the advance tax payments can be changed during the tax
year if the tax base of the business for the current tax year is different from the tax base
of the previous year. The change can be requested by a written statement 30 days prior
to the end of the instalment period to the competent tax authority to which the tax
return, estimate of the tax base for the current year and information that proves such
change has to be attached.
A business unit of a non-resident is also required to withhold the tax on types of income subject
to withholding tax. More information on tax withholding is found in the FAQ – Taxation of the
foreign enterprises – Withholding tax (Answer no. 5).
According to Article 12 of the Corporate Income Tax Act a BU in Slovenia pays tax on profits
that are attributable to the BU in accordance with the transfer pricing rules. In general, profits
attributable to the BU are defined as the profits a BU might be expected to make, in particular in
its dealings with other parts of the enterprise, if it were a separate and independent enterprise
engaged in the same or similar activities under the same or similar conditions – arm’s length
principle. Expenses which a foreign enterprise incurred for the purposes of the BU including
executive and general administrative expenses in relation to the BU, whether in Slovenia or
elsewhere, shall be allowed to be deducted from the tax base attributed to the BU.
2.4 Taxation of the business unit (BU) or a permanent establishment (PE) of foreign enterprises under the provisions of the international treaties on avoidance of double taxation of income (DTA)
The basic rule contained in international treaties on avoidance of double taxation of income
stipulates that the profits of an enterprise of a Contracting State shall be taxable only in that
State unless the enterprise carries on business in the other Contracting State through a
permanent establishment situated therein. If the enterprise carries on business as aforesaid, the
profits of the enterprise may be taxed in the other State but only so much of them as are
attributable to that permanent establishment.
In some DTA´s there is a provision about taxation of Independent Personal Services which
stipulates that income derived by an individual who is a resident of a Contracting State in
respect of professional services or other activities of an independent character shall be taxable
only in that State unless he has a fixed base regularly available to him in the other Contracting
State for the purpose of performing his activities. If he has such a fixed base, the income may
be taxed in the other State but only so much of it as is attributable to that fixed base.
2.5 Examples of business activity in Slovenia
a) Foreign enterprise carrying on business activities in Slovenia
In general, Articles 676 and 680 of the Companies Act provide for the requirement that a foreign
enterprise can only start carrying on business in Slovenia upon registration. Non-resident
companies carrying on business in Slovenia have to be entered into the Court Register and
non-resident sole entrepreneurs or self-employed persons (small businesses) carrying on
business in Slovenia have to be entered into the Business Register. However, in accordance
with EU legislation that provides for effective operation of the single market the registration rules
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are relaxed for companies and businesses from EU Member States. More information about
setting up a business in Slovenia can be found here.
Apart from this requirement, a separate register is in place for tax purposes – the Tax Register.
Article 53 of the Financial Administration Act requires all entities carrying on business in
Slovenia to be entered into the Tax Register and to receive the tax identification number (TIN).
Entities entered into one of the aforementioned primary registers are automatically evidenced in
the Tax Register as well and receive the tax identification number. The newly registered branch
of a foreign enterprise has to inform the competent tax authority in 8 days after the registration
about the number of places and the location of places of business (a place where the business
is carried on), other foreign branches abroad, capital investments at home and abroad, bank
account numbers, associated enterprises and the person responsible for taking care of the
accounting documents of the enterprise. More information on registration and tax liabilities of
foreign companies who carry on business in Slovenia can be found here.
Foreign enterprise receive notice when they entry into the Tax Register about their tax
obligations from carrying on business activities in Slovenia to encourage them to more
accurately and with greater care correctly determine the potential existence of a business unit in
Slovenia. Incorrect determination of a business unit may result in avoidance of tax liabilities in
Slovenia. The existence of a non-resident business unit in Slovenia does not keep separate
examination proceedings and shall not issue a declaratory decision. Person who meets the
conditions for the existence of a non-resident business unit in Slovenia is obliged to submit a tax
return by him/herself.
The legal entity, which on the territory of the Republic of Slovenia has neither seat of business
activities nor permanent establishment and performs economic activities in Slovenia, is
considered a taxable person for VAT purposes. More information about identification and
obligations of foreign tax payers for VAT can be found here.
b) Carrying on business in Slovenia as sole entrepreneurs or self-employed persons
(small businesses), registered abroad
Sole entrepreneurs or self-employed persons (small businesses) who are carrying on business
in Slovenia are liable to personal income tax if they are present in Slovenia for more than half a
year (183 days in a calendar year with or without interruptions) and are carrying on business
through business unit or permanent establishment, located in Slovenia.
Non-resident sole entrepreneurs or self-employed persons (small businesses) carrying on
business in Slovenia have to be entered into the Business Register. However, in accordance
with EU legislation that provides for effective operation of the single market the registration rules
are relaxed for companies and businesses from EU Member States. More information about
setting up a business in Slovenia can be found here.
Non-resident sole entrepreneurs or self-employed persons (small businesses) carrying on
business in Slovenia also have to be entered into a separate register in place for tax purposes –
the Tax Register. Article 53 of the Financial Administration Act requires all entities and
individuals carrying on business in Slovenia to be entered into the Tax Register and to receive
the tax identification number (TIN). More information on registration and tax liabilities of foreign
sole entrepreneurs or self-employed persons (small businesses) who carry on business in
Slovenia can be found here.
Sole entrepreneurs or self-employed persons (small businesses), which on the territory of the
Republic of Slovenia has neither seat of business activities nor permanent establishment and
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performs economic activities in Slovenia, are considered as a taxable person for VAT purposes.
More information about identification and obligations of foreign tax payers for VAT can be found
here.
More detailed information about taxation of residents according to worldwide income and
taxation of non-residents is available in the detailed description International taxation – General
explanations.