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STA, 28 May 2022 - As economies recover post-Covid, taxes on wages went up last year in two-thirds of countries of the Organisation for Economic Cooperation and Development (OECD), including Slovenia.
In Slovenia, the tax rate on a monthly wage of an individual without children reached 43.6%, while the EU average is 34.6%. Slovenia thus ranked sixth among 38 countries, up two spots from the year before. The list is topped by Belgium with a 52.6% share, while Columbia had zero rate.
The share of taxes and contributions in monthly wages of citizens without children went up in 24 of 38 countries, decreased in 12 countries and was flat in two. In Slovenia, it went up by 0.5 percentage points.
Families with two children and only one employed person in 27 countries saw the tax rate increase. In ten countries, the tax rate deceased and was level in one. In Slovenia, it was at 29.5%, while the OECD average was 24.6%.
STA, 11 March 202s - The National Assembly endorsed on Friday amendments to the income tax act that bring higher take-home pay across the board, lower tax on capital gains and a lower top tax rate.
The legislation was slated for passage late last year but was put on the back burner because the coalition did not have a majority in parliament and due to the threat of a referendum pushed for by the Left.
But after Prime Minister Janez Janša in January raised the prospect of holding the referendum along with the general election in April, the Left abandoned the plan and said it would try to tweak the legislation after the election.
The vote was 45 in favour and 40 against today, the missing votes provided by MPs of the National Party (SNS) and Pensioners' Party (DeSUS), which are opposition parties but tend to vote with the government.
The centrepiece of the legislation is a gradual increase in the general tax relief that all taxpayers are eligible for. It will rise from the current level of EUR 3,500 to EUR 7,500 by 2025.
Average pay would thus net EUR 260 more in 2022, EUR 520 more in 2023, EUR 780 more in 2024 and EUR 1,000 more in 2025, according to Finance Ministry calculations.
The tax rate in the highest income bracket, for those making more than EUR 72,000 per year, will be cut from 50% to 45%, and income tax brackets will be indexed to inflation.
The rate of tax from income from interest, dividends and profits has been cut from 27.5% to 25%, with tax-free status kicking in after 15 years of ownership.
Rental income tax will be reduced from 27.5% to 15%, which is coupled with a reduction in normalised costs.
Several other kinds of tax relief will be available for seniors over the age of 70, firefighters and civil protection members, and employers hiring people below 29 or over 55 years of age.
The government has billed the tax cuts as a much needed relief in Slovenia's high-tax business environment that will promote competitiveness and ensure sustainable economic growth, and business organisations have welcomed in particular the prospect of lower labour costs for high-skilled professions.
The centre-left opposition and trade unions, on the other hand, have described the legislation as handouts for the wealthy that will impoverish the tax coffers and make it more difficult to finance social programmes.
STA, 7 July 2021 - The Finance Ministry has proposed a rise in excise duties on cigarettes that comes with an average 5% increase for a pack of cigarettes. The rise, which is expected to take effect in August, is reckoned to bring in an additional EUR 18 million a year.
Under the proposal, which will be coordinated among ministries and then discussed by the government at one of its forthcoming sessions, excise duty per 1,000 cigarettes will rise from EUR 120 to EUR 127. Taking into account the increase and VAT, the average price of a pack of cigarettes will stand at EUR 3.24 from 1 August.
The rise will also affect cigars, cigarillos, fine-cut tobacco and other types of smoking tobacco as well as heat-not-burn tobacco.
When it comes to electronic cigarettes, excise duty on nicotine-free e-cigarettes is to increase, whereas the duties for e-cigarettes that contain nicotine will not change, according to information about the proposal posted on the eAdministration website.
The last increase in excise duties for tobacco products was implemented in October 2020.
STA, 5 May 2021 - The government has adopted amendments to three tax laws in a bid to reduce labour taxation and help businesses and individuals in the post-Covid recovery, including by increasing the general personal income allowance, reducing tax on capital and reducing red tape. The amendments are to be implemented on 1 January 2022.
Amendments to the company income tax act will allow more favourable than existing tax measures and provide a friendlier administrative framework of taxation through simplification and in pursuit of tax certainty, the Finance Ministry said in a release issued after the government session on Wednesday.
The measures include an upgrade of tax breaks for employment, for practical work in vocational training, for donations and investment in digital transformation and green transition. Recognition of certain expenditure in determining the tax base is being simplified and made more favourable.
Under amendments to the personal income tax act the general allowance will be gradually raised by 2025 from EUR 3,500 to EUR 7,500 and the rate of tax in the top income bracket will be cut from 50% to 45%, while credits and net annual tax bases are to be adjusted to inflation again.
The conditions for more favourable treatment of bonuses paid based on company performance are being made less harsh.
The rate of personal income tax on income from interest, dividend and capital gains is being reduced from 27.5% to 25%, with taxed waived on divestment as early as after 15 years of ownership. Rental income tax is being reduced to 15%.
A similar upgrade on tax breaks as in the case of company income tax would also apply to taxation of income from activities.
When using a plug-in company car for private purposes, the user will no longer pay the credit and the tax break for over 70-year-olds is being reintroduced, with changes applying to assessment and payment of ow tax on pensions and income from education funds.
Amendments to the VAT act transpose relevant EU directives and some simplifications and administrative easing on taxpayers and the Financial Administration. A paper receipt, for example, would be issued only on the customer's demand.
The amendments are planned to be implemented on 1 January 2022, except for those transposing EU directives on e-trading and administrative simplifications in the VAT act that would be implemented on 1 July this year.
STA, 9 October 2020 - The Constitutional Court has struck down provisions of a 2013 law that impose a 70% tax on income that individuals have been found to have failed to report. The court also declared that tax reassessment cannot be made for cases prior to 2009.
The court, in the ruling declared on Friday, said the taxation rate could not be above the rate for that valid for income proved by the taxpayer. The top tax rate in Slovenia is 50%.
The court also quashed the provision under which such a tax reassessment procedure can be launched for one or several years within ten years prior to the start of the procedure when it could lead to taxation of undeclared income from before 1 January 2009.
The contentious super tax was passed in late 2013 as part of the government's legislative package aimed at combating grey economy. It entered into effect in 2014.
It provided for the 70% tax rate to be imposed on the difference between the actual value of assets and the reported value of assets, as opposed to the average personal income tax rate which had been used until then.
However, since the 70% tax rate also entails a penal element, the court has now established that the law should have also included legal guarantees that the Constitution prescribes for criminal proceedings under article 29 in the tax reassessment procedure.
Since the procedure under the tax procedure act does not provides such guarantees, this section of the super tax law contravenes the constitution.
The court says it is up to the legislator whether to include an element of penal or restitutional nature in the future, but if it does, it would need to take into account basic criminal procedure guarantees in that procedure.
The 2013 law also expanded the period for which suspicious assets could be scrutinised from five to ten years. This provision was now quashed as the retroactive effect of legal acts is prohibited under article 155 of the Constitution.
The legislation was challenged by the Administrative Court over an appeal against the Financial Administration's decision to impose EUR 1 million tax plus interest on the plaintiff for a period between 2008 and 2014.
Based on the decision, persons who have already been slapped with such high tax payments could claim their money back. The procedure has been applied in some of the high-profile cases of alleged corporate crime.
STA, 16 September 2020 - Sweeping tax cuts and simplification of administrative procedures are at the core of a deregulation plan proposed by the strategic council for debureaucratization, a government advisory body. Ivan Simič, the chair of the council, says lower taxes would lead to higher budget revenue.
"We've made sure the revenue shortfall is as low as possible, but with some adjustments we would in fact secure higher revenue," Simič told the press on Wednesday.
There are almost thirty proposals concerning taxes, including an annual cap on social security contributions for those with a monthly salary of EUR 6,000 or more, which Simič said garnered the most interest when it was presented to coalition partners on Tuesday.
The group also proposes lower capital gains and rental income tax (25% instead of 27.5%), an increase in the general tax credit to EUR 4,000 from EUR 3,500, and the abolition of a tax on luxury vehicles.
A new 10% tax rate has been proposed for income in excess of EUR 1 million. Simič said the new tax bracket would be an attractive proposition for Slovenian professional athletes and foreign athletes who may thus pick Slovenia as their tax domicile.
Similarly, the group proposes a "golden visa" for foreigners who would invest a certain amount of money in Slovenia; the current proposal is an investment in excess of EUR 1 million.
On the other end of the ledger, some sole proprietors would pay higher contributions and taxes, and all interest would be taxed as capital gains; at present only interest in excess of EUR 1,000 is subject to capital gains tax.
It has also been proposed that all employees be entitled to commuting costs at a rate of 10 cents per kilometre. At present the cost of the cheapest public transportation option is recognised.
According to the group, the vast majority of employees would thus get higher commuting costs, except those who live in major cities.
In what is potentially a major boon for sports clubs and charities, the group proposes that companies be allowed to donate up to 20% of their income, up from 0.5% at the present.
There are many other proposals concerning the simplification of reporting and registration procedures for companies and individuals, in particular when it comes to using data that state institutions can access but currently demand that individuals or companies provide themselves.
"We produce the company registration number and all documents are in one place. We also wish to ensure the management of data on all corporate entities in one registry," Simič said.
Another major set of measures concerns simplifications in the issuing of building and environmental permits.
The opposition Left said that the proposals leaned towards "new tax breaks for the rich", and that instead, the government should secure new tax revenue which would not burden the weakest ones, but property of rich people and corporate income.
The party said in a press release that the government of Janez Janša was apparently taking a direction which would "additionally exhaust the state budget and weaken the public welfare and development infrastructure in the long run."
Instead of taking care for the 90,000 unemployed, the council is worried about owners of luxury cars and a handful of millionaires. "The taxation rate for the rich would be significantly lower than those for the poorest ones."
The proposed increase in the general tax credit to EUR 4,000 would be mostly beneficial to taxpayers with the highest income, and not beneficial at all to the poorest taxpayers, the party added.
"Instead of providing the young and other socially disadvantaged persons with decent and affordable apartments, they will again take care of property owners who make money by leasing their property."
The Left is also critical of the proposed annual cap on social security contributions, as a way to make "concessions to the rich at the expense of the public health and pension purses, at the time when revenue losses are drastic."
One of the rare proposals that go in the right direction, according to the Left, is 20% taxation of income gained with trading in cryptocurrencies.
STA, 21 July 2020 - Prime Minister Janez Janša has described decisions on the EU's own resources as one of the biggest achievements of the latest marathon summit of the bloc's leaders. In his view digital tax will likely make the biggest potential own resource of the EU.
Janša made the comments after the summit agreed a pandemic recovery package comprising the bloc's next seven-year budget to the tune of EUR 1.074 trillion and a EUR 750 billion recovery fund, of which EUR 390 billion will be in grants and the rest in loans.
Related: Janša Pleased With Results of EU Budget Talks
To allow the European Commission to borrow in the markets to finance the recovery, the headroom - the difference between the own resources ceiling of the long-term budget and the actual spending - has been temporarily increased by 0.6 percentage points.
This pandemic debt, and grants, will have to be repaid, with EU leaders committing to do so by the end of 2058. The increase in the own resources ceiling will now need to be ratified by the national parliaments.
To make the repayment of that debt easier, EU leaders also committed today to work toward reforming the system of own resources in the coming years by introducing new own resources such as a non-recycled plastic tax, to be introduced next year.
The European Commission will also propose a mechanism to tax carbon-intensive industrial imports from third countries, and a digital levy, plus an overhaul of the emissions trading system to expand it to the aviation and maritime industries.
"The subsidies will have to be repaid. One of the major shifts is those few words about own EU resources, because in seven years' time when we negotiate the next budget this will be the key," Janša said, singling out digital tax as likely the biggest potential own resource.
The coronavirus crisis has substantially increased the profits of digital giants, having accelerated a change in lifestyle, the profits that will at least double over the next five years, Janša said, adding that while profits are being generated everywhere, levies are not collected in the EU. "It's as if cars were being refuelled without any excise duty charged."
Janša also emphasized that no single member state could tackle the digital tax and only the EU was big and strong enough to negotiate a global deal for the benefit of all. "When it comes to big giants even the countries they come from have no serious oversight of the profits that are up to trebling in record time."
The Slovenian prime minister noted that he had talked with OECD Secretary-General Angel Gurria, pointing to the efforts for a deal on digital tax within the Organization for Economic Cooperation and Development.
Janša said taking such decisions was not problematic for the Slovenian parliament. Tax on emissions and plastic would be a problem for the countries that have included the resources in their national tax policies.
Although out of the spotlights, the headway on own EU resources is in Janša's view key from the aspect of agreements on all future financial instruments of the EU.
STA, 22 June 2020 - In tackling grey economy, the Financial Administration (FURS) last year paid particular attention to undeclared work, carrying out a total of 11,982 inspections, with violations detected in 22.3% of the cases. A total of EUR 5.8 million in fines was issued, shows the annual report of the relevant government commission.
In the report, the commission for the prevention of undeclared work and employment commends FURS for managing to detect a large share of irregularities through "well planned and targeted inspections".
It is FURS which received most of the reports related to violations of the labour legislation - last year it received 2,826 reports against 3,504 entities.
In 2019, it detected a total of 2,826 violations and issued a total of EUR 5.8 million in fines, while also filing eleven criminal complaints over the criminal act of undeclared employment under the penal code.
Perpetrators received suspended prison sentences in two cases, the report shows.
What the Inspectorate of Infrastructure has meanwhile emphasised as still problematic is supervision of transport of passengers with personal vehicles, where it is hard to prove undeclared work.
On the other hand, the Inspectorate of Education and Sport notes that there are still private providers of child care who avoid registration procedures in which they need to prove they meet the personnel, spatial and equipment requirements.
"This may result in risky and inadmissible situations for children, which is why such acts should be prevented by amending the relevant law with appropriate measures," the report says.
The police say in their part of the report that no significant differences were detected in comparison with the previous years, and that undeclared work and employment is the most frequent in construction, hospitality and transport sectors.
In terms of criminal acts against the labour relationship and social security, the most frequent in recent years is the failure to pay wages and social security contributions, and illegal termination of contract.
STA, 26 May 2020 - Prime Minister Janez Janša announced potential changes to tax legislation and media funding as he gave a weekly interview with Nova24TV, a broadcaster he has co-founded, on Monday evening. The group advising the government led by tax expert Ivan Simič will examine the possibilities for changes to the tax policy, he said.
"But some fast tax cuts could not be expected in this situation," he said, noting that due to the financial crisis ten years ago, the VAT had been raised.
He would also support an idea for every taxpayer to be able to earmark more than the current 0.5% of their income tax to an organisation to their liking.
"We'll be looking for a solution in this direction. First proposals can be expected by the end of the year," he announced.
Asked what the government could do about the compulsory payment of licence fee for public broadcaster RTV Slovenija, Janša said the Culture Ministry is already "working on some legislative changes".
"The least that could be done is distribute this enormous amount of money in a more just way."
He indicated that the public broadcaster could do "a much better job with considerably less money".
Janša also commented on a controversy about the police having accessed personal data of coalition politicians under the Marjan Šarec government to discredit them.
He said somebody had accessed the personal data of then leader of the Pensioners' Party (DeSUS) Karl Erjavec and of Modern Centre Party (SMC) leader Zdravko Počivalšek.
.@JJansaSDS Razpihovanje sovraštva je nevarno in običajno izbruhne takrat, ko se nekateri ustrašijo izgube svojih privilegijev. Ideološko sovraštvo seje peščica ljudi, ki hujska in ščuva ter ima veliko podporo v osrednjih medijih. @Nova24TV pic.twitter.com/iOcrMivslD
— SDS (@strankaSDS) May 26, 2020
The order came from the then interior minister, said Janša, announcing that "it will be checked what had actually happened".
Boštjan Poklukar from the Marjan Šarec List (LMŠ), which led the government, was interior minister at the time.
Janša also discussed the previous government's action or inaction in taking the necessary measures to contain the spread of the coronavirus.
He said he would release his correspondence with former Health Minster Aleš Šabeder when the time came and if Šabeder agreed to it, indicating former Prime Minister Marjan Šarec had prevented the minister from taking action faster.
"So that people see what was going on and what the former prime minister was actually doing when he should have acted responsibly and take certain measures," Janša said.
Responding to the statement for TV Slovenija on Tuesday, Šarec's LMŠ labelled it fake news and Šabeder toned it down, with the public broadcaster saying he did not want to meddle in the Janša-Šarec dispute.
"We see the claim that Marjan Šarec tried to prevent anything to the former health minister as yet another case of fake news by Janez Janša and Nova24," the LMŠ wrote.
Šabeder meanwhile wrote it had been necessary and fair to promptly brief the new government, which was taking over during such an emergency, on the number of infected persons and on other vital developments and to coordinate the measures.
"This is also the main content of these messages," said Šabeder, adding that the situation had been very much war-like. He also said it had become clear that his team at the ministry had worked in the right direction, while the situation had been changing from minute to minute.
The Financial Administration of the Republic of Slovenia (FURS) reminds taxpayers that the deadline for filling their 2019 tax report is fast approaching.
Due to COVID 19 pandemic, the deadline was extended from March 31st to May 31st this year.
However, since May 31st 2020 is on Sunday, the last day to submit tax reports is in fact June 1st.
Furthermore, taxpayers are required to pay their tax obligations within a 30 day deadline from the submission of their tax return. If they submit their tax return on June 1st, then any eventual tax liabilities must be paid by July 1st at the latest.
