Skip to main content

31st correspondence session of the Government of the Republic of Slovenia

At today’s meeting by correspondence, the Government of the Republic of Slovenia approved the proposed amendments to five tax acts: the Personal Income Tax Act, the Excise Duty Act, the Tax Procedure Act, the Financial Administration Act and the Fiscal Validation of Receipts Act. The Government also stated its position on amendments to this year’s revised state budget.

The Government approves proposals for tax changes

The Government of the Republic of Slovenia today approved the proposed amendments to five tax acts: the Personal Income Tax Act, the Excise Duty Act, the Tax Procedure Act, the Financial Administration Act and the Fiscal Validation of Receipts Act. In the preparation of proposals for tax changes and in light of extremely difficult and unpredictable conditions, we sought a balance between targeted measures to address the high cost of living and budget revenue (excessive) shortfall. What is new compared to the proposals that the Government has been addressing since Thursday is that the recognised flat-rate expenses for the so-called full-time flat-rate taxpayers are reduced above the limit of EUR 35,000 of income, and not above EUR 25,000.

Let us emphasise that employees with minimum, average and up to five times the average salary will receive higher net incomes next year compared to this year. Special attention was paid to people with the lowest incomes and young people, who, at the moment, need help from the state the most.

 

The proposed amendments to the Personal Income Tax Act include the following measures:

  •  the amount of the general tax allowance was set at EUR 5,000, but we eliminated the gradual increase to EUR 7,500;
  • the total income, up to which residents receive an additional general tax allowance in addition to the general tax allowance, is increased from EUR 13,716.33 to EUR 16,000;
  • a tax allowance for young people is introduced; the tax base from employment income for taxpayers up to the age of 29 was reduced by EUR 1,000 in a tax year;
  • the tax rate in the last 5th income tax bracket is increased from the current 45 per cent to 50 per cent;
  • the mechanism of automatic adjustment of the amounts of tax allowances and net annual tax bases is eliminated, and a modified adjustment mechanism is introduced;
  • when paying for business performance, an additional condition for favourable tax treatment (payment no more than twice in a calendar year) is introduced and the possibility of a more favourable tax treatment of income on this basis in the amount of 100 per cent of the employee’s average salary is eliminated (but the general amount of untaxed work, i.e. 100 per cent of the average monthly salary of employees in Slovenia, is maintained);
  • the condition for entry or existence in the system of flat-rate expenses for income from self-employment linked to the mandatory pension and disability insurance of taxpayers or persons employed by them is defined more clearly, the period of continuous insurance is extended (to nine months) and, depending on the amount of the taxpayer’s income, the amount of recognised flat-rate expenses is reduced;
  • nothing changes for full-time flat-rate taxpayers with income of up to EUR 35,000, but for full-time flat-rate taxpayers with income above EU 35,000, the recognised flat-rate expenses are reduced to 40 per cent;
  • the recognised flat-rate expenses are reduced to 40 per cent for part-time flat-rate taxpayers;
  • in the case of income from property leasing, the income tax rate is set at 25 per cent, while the amount of recognised flat-rate expenses does not change;
  • the option for the taxpayer to decide to include income from property leasing and income from capital in the annual tax base is eliminated;
  • the conditions and amount of compensation for using one’s own funds for work at home, which is not included in the tax base from income from employment, are changed.

The proposed amendments to the Excise Duty Act aim to mitigate the consequences of high energy prices for the agricultural and forestry sectors. The proposal also foresees that the right to a refund of excise duty for agricultural and forestry machinery will be replaced on 1 January 2023 with the right to purchase tax-marked fuel for agriculture and forestry with a direct benefit when paying excise duty. From January 1, 2023, the excise duty on fuel for agriculture and forestry is set at the same level as the excise duty on gas oil for heating, which will make the actual obligation to pay excise duty for the purchase of fuel for agriculture and forestry lower than in the current system (the excise duty on gas oil for heating is 24 per cent of the excise duty on diesel fuel, but in the current system, farmers pay only 30 per cent of the excise duty on diesel fuel after claiming a refund of the excise duty).

The Government is building on measures in the tax field with other measures to mitigate inflation and the high cost of living.

The proposed amendments to the Tax Procedure Act addresses the transposition of directives into the Slovenian legislation and certain other solutions aimed at facilitating the fulfilment of tax obligations (example: taxpayers will not need a qualified digital certificate to collect documents from the eDavki portal).

The proposed amendments to the Financial Administration Act eliminate the provisions introduced with the last amendment to this Act, particularly in the part that is a derogation from the system regulation, for which no valid reason has been demonstrated (example: the special position of directors of financial offices and collegial decision-making in the most demanding tax procedure cases). A new authorisation is also established – the use of technical aids to obtain data on the position and movement of goods is facilitated (when conducting a financial investigation, when reasons are given for suspecting that an act with which the most serious violations of tax regulations in the field of excise duties, customs and value added tax has been committed, including the provision of mutual assistance to the competent authorities of the EU and EU Member States).

The proposed amendments to the Fiscal Validation of Receipts Act reintroduce the obligation to submit invoices issued by suppliers of goods and services, and the obligation to accept and retain the customer’s invoice. This is one of the key tools to control the shadow economy and secure the rights of customers, including the option of controlling the content of invoices and filing a complaint. Sellers can submit an invoice to buyers in paper or electronic form according to their agreement and the technological capabilities of the seller and the buyer. Taxpayers are encouraged to issue and submit invoices in digital form wherever and whenever possible.