Foreign tax credit
Tax paid abroad can be credited against tax liability in Slovenia. The amount of tax that can be credited is the amount of final and actually paid tax. If there is a DTT made between countries in question, the amount of tax that can be credited is the amount calculated at the rate determined in the DTT. A taxpayer needs to provide proof of the amount of foreign tax, the basis for calculation of the tax, and the amount of the tax paid.
A tax allowance for investment in equipment and intangible assets is available for investments made after 1 January 2008. The tax allowance is limited to 40% of the value of the assets (also intangibles) invested into and can be utilised up to a maximum of 63% of the actual tax base.
Research and development (R&D) allowances
A 100% investment allowance is granted for investments in R&D within the tax period, regardless of the location of establishment of the company within Slovenia. The investment can be utilised up to a maximum of 63% of the actual tax base. Such an investment tax allowance may be obtained for expenditures on:
- internal R&D activities within the company and
- the purchase of R&D equipment from related or unrelated parties or from a private research institution.
Allowances for employing certain individuals
A taxpayer that employs trainees or students to undertake practical work may reduce its taxable profits by an additional 20% of the average monthly payment paid to such persons for every month the person carries out the work.
A taxpayer that employs disabled persons may decrease its taxable profits by an additional 50% of the salary paid to such persons (in addition to the deduction for their actual salary cost). A taxpayer that employs a severely disabled person or a person with a combination of total hearing loss and speech impairment may reduce its taxable base by an additional 70% of the salary paid to such a person (in addition to the deduction for their actual salary cost).
Tax relief for investments in the Pomurje region
Entities based in the Pomurje region of Slovenia may claim additional employment incentives and additional tax relief for investments. These extra benefits are available from 2010 to 2019. As a result, provided certain conditions are met, entities with their seat in Pomurje are entitled to a 70% tax allowance for investments in equipment and intangible assets as well as to certain employment allowances.
Tax relief for employment of hard-to-place workers
A taxpayer who employs a hard-to-place worker may be able to benefit from a tax allowance for both CIT and tax on activity. A hard-to-place worker is a person younger than 26 or older than 55 who has been registered as unemployed for at least six months and who has not been employed by the taxpayer or a related party in the past 24 months. The tax allowance equates to 45% of the salary paid to the person during the first 24 months of their employment, up to the amount of the tax base.
As of the beginning of 2016 and until the end of 2019, an additional tax relief is available for taxpayers employing a person older than 55 who has been registered as unemployed for at least six months prior to employment. A taxpayer will be exempt from paying all compulsory social security contributions (16.10%) for the first two years after employing such a person in case the employment contract is concluded during the above-mentioned period.