Slovenia

Corporate - Income determination

Last reviewed - 04 August 2020

Taxable profits are assessed in accordance with Slovenian Accounting Standards 2016 or International Financial Reporting Standards (IFRS) and modified for certain revenues and certain expenses, which are partly or wholly tax non-deductible.

Inventory valuation

Slovenian law allows the application of all the most commonly used inventory valuation methods, including the first in first out (FIFO), weighted average cost, and floating average prices methods.

Capital gains

Under certain circumstances, the gains made by a Slovenian taxpayer on the disposal of an equity shareholding are effectively 47.5% exempt from taxation. Similarly, 50% of a loss arising on the disposal of such a shareholding would not be deductible for CIT. This treatment applies to the disposal of shareholdings of at least 8% that have been held for at least six months and where the taxpayer disposing of the holding employed at least one person during the six-month holding period.

The above treatment is not available for the disposal of a shareholding of a company that is resident in a country that:

  • is outside the European Union
  • has a corporate tax rate less than 12.5%, and
  • is included in a list published by the Ministry of Finance.

Dividend income

Dividends and similar income received by a Slovenian taxpayer are generally 95% exempt from taxation as long as the distributor was subject to Slovenian CIT or to a comparable profits tax. The exceptions to this are where dividends represent untaxed reserves of the distributor or where the distributor is tax resident in a country that:

  • is outside the European Union
  • has a corporate tax rate less than 12.5%, and
  • is included in a list published by the Ministry of Finance.

Interest income

Interest and similar income received by a Slovenian taxpayer is included in the taxable base and can, in principle, reduce tax liability in the amount of withholding tax (WHT) paid abroad. Interest between related parties needs to be calculated in accordance with the arm’s-length principle.

Royalty income

Royalties and similar income received by a Slovenian taxpayer are included in the taxable base and can, in principle, reduce tax liability in the amount of WHT paid abroad.

Foreign income

Foreign income, except dividends, received by a Slovenian entity from foreign sources is included in taxable income for CIT purposes in the same tax year as it arises unless the applicable DTT provides for an exemption.