Slovenia

Directive (EU) 2017/952 – Anti-Tax Avoidance Directive (ATAD) II

While most of the ATAD rules have already been transposed into the Slovenian tax legislation, the adoption of the rule on the limitation of tax-deductible interest was postponed until 2024, as Slovenia already had an equivalent domestic rule (i.e. the thin capitalisation provision 4:1). The rule on the limitation of tax-deductible interest costs stipulates that the tax deductibility of borrowing costs is limited to 30% of the taxpayer's earnings before interest, taxes, depreciation, and amortisation (EBITDA). The EBITDA Interest Limitation Rule is intended to limit the erosion of the tax base through the use of excessive interest deductions.

Slovenia is committed to transposing the EBITDA rule on the limitation of tax-deductible interest into Slovenian legislation by 2024. The draft text of the proposal for the amendment of the Corporate Income Tax Act (CITA) that will implement the changes is currently in the legislation process. In light of the upcoming changes, companies will need to review their existing financing arrangements to assess potential tax consequences. 

Directive (EU) 2022/2523 - Pillar II

In 2022, the Council of the European Union (EU) adopted Council Directive (EU) 2022/2523 on ensuring a global minimum tax rate for international corporate groups and large domestic groups in the Union (the so-called ‘Pillar II Directive’).

The Pillar II Directive lays down rules to ensure a minimum of 15% effective taxation of international corporate groups and large domestic groups. The Pillar II Directive framework consists of two interrelated rules: the Income Inclusion Rule (IIR) and the Undertaxed Profit Rule (UTPR), which together form global rules against erosion of the tax base (GloBE). The IIR sets a minimum effective tax rate of 15% for large international corporate groups and large domestic groups with a total minimum turnover of 750 million euros (EUR) (based on the consolidated financial statements), while the UTPR, which serves as a buffer in cases where the IIR is not applied, from international groups / large domestic groups with effective tax rates below 15% are required to pay so-called ’qualified domestic top-up tax‘ in order to achieve fair taxation in each jurisdiction. 

In December 2023, Slovenia adopted a new Minimum Tax Law, which transposes this Directive, ensuring global minimum taxation into Slovene national law and will apply to fiscal years beginning on or after 31 December 2023. The newly adopted Law generally applies to multinational and large domestic groups that exceed a threshold of EUR 750 million in revenue on a consolidated basis and will impose a new, highly complex administrative burden to groups in scope in efforts to ensure a minimal tax rate of 15%.