Nigretti Gianmauro: Slovenia 2016 - Corporate and Tax Highlights Everything you need to know when investing in Slovenia.

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SLOVENIA 2016

3. CAPITAL: LJUBLJANA
POPULATION: 1,98 MILLION
POLITICAL SYSTEM:
CURRENCY:
PARLAMENTARY DEMOCRATIC REPUBLIC
EURO (SINCE 1ST JANUARY 2007)
GEOGRAPHY AND POPULATION

4. The Companies Act recognizes the following types of business vehicles:
Partnerships (organized according to general provisions of continental law):
• Limited partnership
• General partnership
Corporate forms:
Persons who wish to incorporate a commercial enterprise in Slovenia may choose from the
following types of business vehicles :
• a public limited company/a joint-stock company
• a company with limited liability/a private limited company
• a sole proprietorship/a sole proprietor/a sole trader
• a general partnership
• limited partnership
• a limited partnership/a partnership limited by shares ( the German model)
• Branch (legally organized unit of foreign legal entity; the parent company is responsible for all
liabilities arising from the operations of its branch)
The most common forms are limited liability company (d.o.o.) and joint stock company (d.d.).
Establishing a limited liability company or a branch office is the most common practice of foreign
companies establishing their business in Slovenia.
FORMS OF BUSINESS ORGANIZATIONS

5. Limited liability company (LLC or d.o.o.)
An LLC is a legal entity with one founder (single-member LLC) or multiple founders who are not
liable for the obligations of their undertaking. Share capital must be paid in; the minimum amount is
EUR 7,500.
A limited company is the most common way of doing business in Slovenia. Limited companes are
owned by shareholders (individuals or other legal entities) and run by directors. They must be
recorded by a notary and registered at the Trade Register. To set up a limited company you need the
following requirements:
• Have a name and address for the company
• To avoid mailboxes, the Public Register of Companies (AJPES) needs a formal lease
• Have at least 1 director (an individual)
• Have at least 1 shareholder
• Have articles of association (agreed rules about running the company) and activities to be
carried out
• Register your company to the Tax Administration for the Tax number and Corporate tax and for
VAT (if applicable)

6. Public limited company (d.d.)
A public limited company may be founded by one or several local or foreign natural or legal
entities who adopt articles of association which are prepared in the form of a notarial record.
The minimum share capital is EUR 25,000.
Sole Traders
The easiest way to start a business in Slovenia is to become a ‘sole trader’ (samostojni
podjetnik posameznik). This means that only you own the business and you can work alone or
employ other people.

7. Companies operating in Slovenia are obliged to keep accounting records and prepare annual
financial statements in accordance with the Slovene Accounting Standards issued by the Slovene
Institute of Auditors.
Domestic professional efforts provided the basic framework for the Slovene Accounting Standards
in accordance with the compulsory framework of the International Accounting Standards and
directives of the EU.
Business organisations which must have their financial statements audited are defined under the
National Companies Act. The Slovene auditing profession has fully adopted the International
Standards of Auditing.
About reporting period and personal income tax returns have to be filed to the tax authority no
later than 31 March of the current year for the previous year.
When the fiscal year equals the calendar year, corporate income tax returns have to be delivered to
the tax authority no later than 31 March of the current year.
Where the fiscal year is reconciled with the business year (if different from the calendar year),
corporate income tax returns have to be delivered to the tax authority within three months of the
year end.
ACCOUNTING AND AUDITING

8. Corporate income tax
In general, all companies resident in Slovenia are subject to tax on their worldwide income (but
see Foreign tax relief). A company is resident in Slovenia if it has its legal seat or effective place of
management in Slovenia. Non-resident companies are subject to tax on their Slovenian-source
income only (income derived from or through a permanent establishment and other Slovenian-
source income subject to withholding tax).
Rates of corporate income tax
The standard corporate income tax rate is 17%. The corporate income tax rate for qualified
venture capital companies is 0%, subject to specific conditions. Investment funds that distribute
90% of their operating profits for the preceding tax year by 30 November of the current tax year
are taxed at a rate of 0%.
Administration
The tax year is the calendar year. However, a company may select its financial year as its tax year
if the selected year does not exceed a period of 12 months and if it informs the tax authorities
regarding its selection of the tax year. The selected tax year may not be changed for a period of
three years. Annual tax returns must be filed within three months after the end of the tax year.
CORPORATE TAXATION

9. Dividends
In principle, dividends paid to residents and nonresidents are subject to withholding tax at a
rate of 15%. The tax does not apply to dividends paid to a resident or to a permanent
establishment of a nonresident if the dividend recipient informs the dividend payer of its tax
number.

10. Who is liable
Residents are subject to income tax on their worldwide income. Nonresidents are subject to income
tax on income from sources in Slovenia. Employment income and in come from the performance of
services and business income are considered to be derived from sources in Slovenia if the
employment, services and business are carried out in Slovenia. In addition, income is deemed to be
derived from a source in Slovenia if it is paid or borne by a Slovenian tax resident. An individual is
considered to be resident for tax purposes in Slovenia if, during the fiscal year, he or she fulfills any
of the following conditions:
• He or she has an officially registered permanent residence in Slovenia;
• His or her habitual abode or center of personal and economic interests is located in Slovenia;
• He or she is present in Slovenia for a total of more than 183 days.
Rates
Employees are subject to monthly employer withholding tax on salaries at rates ranging from 16% to
50%. Temporary workers are subject to a 25% withholding tax on income earned from the
performance of work and services, reduced by 10% of standardized material costs. Payments on the
basis of work contracts are subject to an additional tax at a rate of 25%, paid by the employer.
Individuals aggregate their active income (that is, employment income, business income, income
from agricultural activities and forestry, rental income and income from transfer of property rights),
apply the progressive tax rates below, subtract tax withheld and paid during the year and then pay
any balance due or request a refund of any overpayment.
INDIVIDUAL TAXATION

11. Value added tax (VAT) is charged, levied, collected and paid in respect of the supply and import of
goods and services. Under the VAT Act, the usual tax rate is equivalent to 22% and reduced to 9.5%.
The following are liable for VAT at the reduced 9.5% rate:
• Human and animal food (except alcoholic beverages)
• Livestock, seeds and seedlings, manure and fertilisers
• Hotel lodgings
• The supply of water
• Medicines and medical equipment
• Public transport
• Books, periodicals and compact discs
• Copyright and art
• Housing and buildings services
The following are liable for zero-rated VAT:
• Medical services
• Social security services
• Education, sports and religious services
• Political and humanitarian activities
• Certain cultural services and the like
• Provisional imports are also zero-rated
VAT

12. • Slovenia has signed double taxation agreement with 55 countries.
DOUBLE TAX TREATIES

13. This publication must not be regarded as offering a complete explanation of the taxation and
corporate matters that are contained within this publication.
This publication has been prepared on the express terms and understanding that the publishers are
not responsible for the results of any actions which are undertaken on the basis of the information
which is contained within this publication.
The publishers and the authors expressly disclaim all and any liability and responsability to any person,
entity or corporation who acts or fails to act as a consequence of any reliance upon the whole or any
part of the contents of this publication.
Accordingly no person, entity or corporation should act or rely upon any matter or information as
contained or implied within this publication without first obtaining advice from an appropriately
qualified professional person, and ensuring that such edvice specifically relates to their particular
needs.
DISCLAIMER