Slovenia

Individual - Other tax credits and incentives

Last reviewed - 04 August 2020

Tax treatment of payments to seconded employees

There is a reduction of the tax base for PIT for employees that are on a secondment in a foreign country, as follows:

  • In the case of an uninterrupted secondment of up to 30 days (up to 90 days for drivers in international traffic), the reimbursements for food are excluded from the tax base up to the amount that applies to temporary absence (e.g. subsistence allowance). When considering secondments that last beyond 30 days (90 days for drivers in international traffic), the mentioned costs are not included in the taxable base in the amount of reimbursement for food during work, increased for 80%.
  • Reimbursements for the costs of travel are not included in the taxable base, whereas the reimbursements of the costs of travel to and from the work place, in the foreign country, are not included in the taxable base in the amount that applies to the transport to work and from work. Reimbursements of costs of travel to and from the place of secondment at the start or at the end of the secondment are not taxed in the amount and under the conditions that apply to temporary duty.
  • Reimbursements of costs for accommodation are not included in the taxable base in the amount of actual costs, given that the uninterrupted secondment is no longer than 90 days.

Moreover,  seconded workers are entitled to a special tax base, which does not include 20% of the salary or maximum EUR 1,000 in a single month, under the following conditions:

  • The employee is on a secondment in a foreign country or Slovenia.
  • The secondment lasts more than 30 days without interruptions.
  • The distance from the usual place of residence to the place of work is more than 200 km, considering the shortest road connection.
  • The contract of employment sets down the salary of the employee on a secondment in the amount of at least 1.5 times the last known average wage of the employees in Republic of Slovenia.
  • The employee on the secondment was not a tax resident of the country of secondment in the last five years before the secondment.

The mentioned exclusion is temporary and can only apply to income that has been paid out in a maximum of 60 months in the time period of ten years from the first secondment.

Taxation of the salary for business success

The changes of the PIT Act are bringing a more beneficial taxation of the part of the salary for business success. The part of the salary for business success is excluded from the taxable base in the amount of 100% of the average monthly wage of the employees. Such treatment is possible for the part of the salary for business success that is paid out once in the calendar year to all entitled employees at the same time and is fulfilling one of the following conditions:

  • All employees at the employer have the right to the pay-out of the part of the salary for business success, and the right to the part of the salary and the criteria for its pay-out are set down in the General Labour Act of the employer.
  • The collective bargaining agreement sets down the possibility of part of the salary for business success under the criteria that is set down in the concerned collective bargaining agreement or agreed in the way or on the basis of the relevant bargaining agreement.

Part of the salary for business success is now entirely untaxed, given that it is paid out after 1 January 2018 (even in the case that is it paid out in relation to year 2017).