As the EU Treaty, relevant EU Regulations and Directives, and EU Court case law are of direct application in Slovenia, Slovene courts follow the same policy as reflected in the noted documents and case law. Thus, state aid in Slovenia is defined as an advantage in any form whatsoever conferred on a selective basis to undertakings by national public authorities and causing distortion of the competition.
Multilateral Convention (MLI)
With the ratification of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) in mid-March 2018, certain provisions of DTTs that Slovenia has in place will be affected. In addition to the minimum standards on treaty abuse (Articles 6 and 7 of MLI), Slovenia also adopted changes to dividend transfer transactions, threshold for PE, arbitration, etc.
In November 2019, the Slovene Tax Authorities issued an explanation regarding international taxation and the application of international DTTs, which serves as guidance in relevant cases.
Base erosion and profit shifting (BEPS)
The transfer pricing landscape of Slovenia remains relatively unchanged but is nonetheless dependent on the updated or added guidance published by the OECD as a result of the BEPS action plan. It can be anticipated that the changes due to the BEPS project will also have an appropriate impact on the transfer pricing environment, legislation, and practices in Slovenia.
United States (US) Foreign Account Tax Compliance Act (FATCA)
On 2 June 2014, the Republic of Slovenia concluded an Agreement to Improve International Tax Compliance and to implement FATCA (the Agreement) with the United States that entered into force on 1 July 2014, which further defines the obligations of Slovenian financial institutions and the Financial Administration of the Republic of Slovenia related to FATCA implementation. The Agreement supplements the existing rules on cooperation between the Republic of Slovenia and the United States in the field of avoidance of double taxation and exchange of information and will contribute to the reduction of administrative burden to Slovenian financial institutions.
The conclusion of the Agreement, which is based on the Model 1 Intergovernmental Agreement (IGA), ensures the implementation of FATCA provisions on the basis of reporting and exchange of information in accordance with the convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital. According to the Agreement, Slovenian financial institutions are required to report information as determined in the Agreement to the Financial Administration of the Republic of Slovenia, which reports the information to the US Internal Revenue Service (IRS). Reciprocally, Slovenia is receiving information from the US IRS about the funds of Slovenian taxpayers in the United States.
Directive on Administrative Cooperation - Directive 2011/16/EU (DAC6)
The sixth amendment to the Directive on Administrative Cooperation in the field of taxation (Directive 2011/16/EU, otherwise known as ‘DAC 6’) entered into force on 25 June 2018.
The legislation is part of the European Commission's aim to enhance tax transparency in the European Union and combat aggressive tax planning. DAC 6 applies for companies or professionals that design or promote tax-planning arrangements with cross-border elements involving an EU member state.
The scope of the DAC6 is very wide, which means that companies will have to thoroughly assess whether they are required to report future transactions to the financial administration.
On 1 July 2019, DAC6 was transposed into the Slovenian legal system with an amendment to the Tax Procedure Act (TPA-2). The amendments follow the provisions of DAC6 almost in its entirety, with a few local specifics, such as provisions regarding penalties and professional secrecy privilege.
It should be noted that such cross-border arrangements, where the first step of implementation has been or will be made between 25 June 2018 (date on which DAC 6 came into force) and 30 June 2020, must be reported between 1 July 2020 and 31 August 2020. The report will have to cover the agreements that were carried out between 25 June 2018 and 1 June 2020, when the Directive starts to apply. The first reporting to local financial authorities will follow on 31 August 2020.
The changes to the local legislation introducing DAC6 have been in effect since beginning of July 2019 and are generally following the exact wording of the Directive. Hence, there have not been any distinguished local deviations in this regard.