On Wednesday, 5 May 2021, the Government approved amendments to the three tax acts and sent them for consideration to the Slovenian Parliament
The Slovenian Parliament has received proposals for amendments to three tax acts, which will be considered under the urgent procedure. An upgrade of the tax system, more precisely Personal Income Tax Act, Value Added Tax Act and Corporate Income Tax Act is expected.
1.CORPORATE INCOME TAX ACT
The proposed amendments to the Corporate Income Tax Act bring more favourable tax treatment and measures that would further stimulate the economic recovery after the COVID-19 epidemic. The changes that the amendment is supposed to bring include the following:
- transposition of the European directive against tax avoidance practices that directly affect the functioning of the internal market - hybrid mismatches,
- increase of the proportion of deductibility of hospitality and supervisory board costs from current 50% to 60%
- the introduction of a tax relief for investments in digital and green transition, and
- increase of a tax relief for donations from 0.3% to 1%.
2.PERSONAL INCOME TAX ACT
The proposed amendments to the Personal Income Tax Act, the primary objective of which is also to help the economy after the COVID-19 epidemic and relieve taxable persons, provides for the following changes:
- a gradual increase in the general tax allowance by 2025 from EUR 3,500 to EUR 7,500,
- reduction of the tax rate of the fifth income tax bracket from 50% to 45%,
- increase of a tax relief for donations from 0.3% to 1%,
- the introduction of a tax relief for investment in digital and green transition,
- the introduction of a tax relief for persons over the age of 70 in the amount of EUR 1,500 per year,
- reduction of the personal income tax rate on interest, dividend and capital income from 27.5% to 25%, and
- reduction of taxation of rental income from 27.5% to 15%.
3.VALUE ADDED TAX ACT
The Act Amending the Value Added Tax Act brings the following novelties:
- simplification and administrative relief for taxable persons,
- the application of the VAT deduction for non-carbon dioxide-free passenger motor vehicles, provided that the vehicles are intended for the pursuit of business activities and the value of the motor vehicle together with the accessories does not exceed EUR 80 000,
- cancelation of the threshold for the mandatory entry of farmers into the VAT system,
- the cancelation of the mandatory submission of the list of invoices received and issued at the time of the first submission of the VAT return by the taxable person, and
- delivery of the invoice in paper form only at the customer's request.
The Slovenian Parliament will decide on the proposed changes at a forthcoming session. The intention of the Government is that the above amendments would enter into force on 1 January 2022, with the exception of the amendments relating to the transposition of European directives in the field of VAT, which are expected to enter into force on 1 July this year.
The above is a brief summary of the proposed changes. A more comprehensive summary of changes in tax legislation will be prepared when the acts are adopted and published in the Official Gazette.
*** This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
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