Corporate income tax (CIT)
The Tax Procedure Act has been amended to introduce the possibility for taxable entities to conclude an Advanced Pricing Agreement (APA) with the competent authority on the transfer prices set between related entities. Additionally, the possibility is foreseen that an APA is concluded cross border with the competent tax authority in a foreign state. The amendments came into force as of 1 January 2017.
In that regard, in the beginning of 2016, Slovenia has also signed the Multilateral Competent Authority Agreement together with 31 countries, which implements country-by-country (CbC) reporting on transfer prices for certain multinational companies.
With the amendments of the Tax Procedure Act, which has been published in the Official Gazette on 5 October 2016, a CbC reporting obligation has now been implemented into the Slovene legislation and will be in use as of January 2017 onwards. The first submission of CbC reporting will thus be required for the financial year 2016, whereas the deadline for the submission of CbC reporting is within 12 months after the end of financial year (i.e. 31 December 2017).
Furthermore, the Slovene CIT Act and Personal Income Tax (PIT) Act have been amended, with the new regulations effective as of 1 January 2017 onwards. As part of the amendments to the CIT Act, the CIT rate has been increased from 17% to 19% from 1 January 2017 onwards. In addition, the special zero tax rate for venture capital companies is abolished, and recognition of expenses from depreciation of goodwill is no longer allowed.
Value-added tax (VAT)
As of the beginning of 2016, Slovenia has implemented an obligation for taxable persons to report cash turnover only through specific electronic cash registers (‘tax cash registers’), providing for traceability of any modifications made and thus enabling a proper audit trail.
Also from the beginning of 2016, the higher VAT rates (changed from 20% to 22% and from 8% to 9.5% in 2013) became permanent in nature, and the change was implemented into the Slovene VAT Act to enhance transparency. Previously, the increase was meant to be temporary in nature as a measure to overcome the financial crisis.
Moreover, the procedure of charging and paying import VAT is simplified. Import VAT will no longer have to be charged based on customs declaration at the time of the import (if certain conditions are met). Instead, taxpayers identified for VAT purposes in Slovenia will be able to reverse charge and pay it through VAT return at the end of the month (as it goes for inter-Community acquisitions). If the conditions for VAT deduction are fulfilled, the taxpayer will be able to claim VAT deduction at the same time. Taxpayers without a permanent establishment (PE) in Slovenia but identified for VAT purposes will have to appoint a tax representative for VAT purposes in order to be able to charge the import VAT according to the amended procedure.
The amendments to the procedure of charging and paying import VAT shall apply (i.e. the provisions will be able to be used) from 1 July 2016 onwards.