Change of tax rates in Slovenia in 2018
Hardly any amendments were made to the Slovenian Tax Law as of 01.01.2018 due probably to the upcoming election of a new Parliament. The amendments mainly refer to accompanying measures to the law on cross-border services, IFRS 9, and to undesired effects of tax advantages related to lump sum deduction in the past.
Due to the cross-border service provision law (Zakon o čezmejnem izvajanju storitev) the ”export“ of employees of companies, which have little or no business activity in Slovenia, will be prevented. As of January 1st, 2018 every service, which is performed abroad, will be regarded as a secondment.
Changes in the income tax in Slovenia
Secondments in Slovenia
As a consequence of the cross-border service provision law, many business trips would have been requalified as a secondment.
In the past, short-term activities up to 3 months at the premises of a foreign client/customer generally qualified as business trips. Without accompanying measures in income tax law, accommodation costs, for example, paid by the employer, would have be seen as benefits in kind, and covering additional expenditures at the place of activity (daily allowances) would been regarded as taxable income.
To cope with the consequences of the re-qualification, many changes in favour of the employees were introduced:
- Health insurance coverage for foreign activities is not subject to a benefit in kind.
- In case of a secondment, daily allowances in the amount of EUR 6.12 are exempt from tax.
- In the case of an uninterrupted secondment of up to 30 days and in the case of truck drivers for longdistance transport of up to 90 days, daily allowances are still exempt from tax. In the case that the limits of 30 resp. 90 days are exceeded, daily allowances increased up to 80 % are still exempt from tax.
- Transportation costs between one’s residence and one’s place of employment are tax exempt during the uninterrupted secondment as well.
- In the case of an uninterrupted secondment of up to 90 days, providing accommodation is not subject to a benefit in kind
- In the case of an uninterrupted secondment exceeding 30 days, 20 % of the salary (capped at EUR 1,000 and subject to several other requirements) is exempt from tax.
As of January 1st, 2018 a performance bonus is exempt from tax up to an amount of 100 % of the average Slovenian gross salary (at the moment: EUR 1,621.46). Those bonuses are only subject to social insurance.
- Find out more about salaries and taxes in Slovenia and CEE
Lump sum expenses deduction
Corporate income could relatively easily be taxed at a very favourable tax rate, if preconditions are met. To avoid abuse, turnover thresholds, as well as an absolute cap
Corporate income tax
The Corporate Income Tax Act in conjunction with IFRS 9 determines that the non-tax deductible assessment of financial tools due to their realization or other cases of disposal has to be part of the tax base.
The Corporate Income tax rate remains at 19 % in Slovenia.
As of January 1st 2018 the minimum salary amounts to EUR 842.79.
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