Applicable changes in tax legislation
Extension of the right to short-term sick leave extended until 31 May 2022
On 25 February 2022, the decision on the extension of the validity of the short-term sick leave measure adopted by the Government of the Republic of Slovenia was published in the Official Gazette of the Republic of Slovenia No 26/22. The Decision extended for three months the validity of Article 31 of the Law on Additional Measures to Mitigate and Eliminate the Consequences of COVID-19 (ZDUOP). Employees may exercise their right to short-term sick leave until 31 May 2022, and employers may submit these claims for reimbursement electronically by 31 August 2022 at the latest. An employee may be absent from work due to sickness without a certificate of justified absence from work (eBOL) issued by a personal doctor of choice, i.e. without a prior determination of the reasons for such absence from work, for up to three consecutive days at a time, up to a maximum of once per calendar year. The employee must notify the employer of the short-term sick leave in writing or electronically on the first day of the absence and may not engage in any gainful activity or move outside his/her place of residence while the short-term sick leave is being taken. During this absence, the worker is entitled to a wage allowance, which is paid by the employer, who then claims reimbursement from the Health Insurance Fund of Slovenia (ZZZS). The employer is reimbursed by the ZZZS against the budget of the Republic of Slovenia.
National Assembly Committee amends the Energy Price Support
On 18 February, the National Assembly's Economy Committee approved a series of amendments to the Law on measures to mitigate the effects of the rise in energy prices in the economy and agriculture. Among other things, they considerably broaden the range of beneficiaries of aid. The amendments voted in favour remove the conditions that (1) only legal entities or natural persons with at least five employees are eligible for aid, (2) that energy costs must account for at least five percent of business expenditure and (3) that these costs must amount to at least 10.000 EUR in 2019.
The deadline for submitting Corporation Tax and Business Tax Returns is 3 May 2022
On 22 February 2022, the National Assembly of the Republic of Slovenia adopted the Act on Measures to Mitigate the Consequences of the Rise in Prices of Energy Products in the Economy and Agriculture (ZUOPDCE), which is published on the website of the National Assembly of the Republic of Slovenia. Under a specific chapter on "Tax Measures", it is stipulated that for 2021 the taxpayer must submit to the tax authority a tax return on business income and corporate income tax (CIT) no later than 30 April. As this day falls on a Saturday, the deadline for submitting the Corporate Income Tax and Business Income Tax returns is Tuesday, 3 May 2022. The deadline for the notification of the determination of the tax base by normalised expenditure is also extended until the same date. Article 16 of the CCCTPL also determines an extension of the deadline for the submission of annual reports to AJPES. Annual reports must be submitted by 30 April 2022 at the latest.
New employment allowance from 2022
Amendments to the Corporation Tax Act-2 (ZDDPO-2) have introduced a new relief for the employment of persons in a profession for which there is a shortage of jobseekers on the labour market and who have not been employed by the taxable person or a related person of the taxable person in the last 24 months. The relief is granted for the first 24 months of employment of such persons, at a rate of 45 % of the person's salary. The allowance is exclusive of other allowances (for the employment of young workers, older workers and disabled workers) and is granted subject to an overall increase in the number of employees of the employer.
The deadline for payment of deferred contributions is 31 March 2022
In 2020, the Wage and Contribution Intervention Measures Act (ZIUPPP) postponed social security contributions for the self-employed and farmers. Contributions were deferred for April, May and June 2020, and self-employed workers who had no other employees and whose self-employment was the only basis for their inclusion in compulsory social insurance, as well as farmers could benefit from the deferral. The deadline for payment of the deferred contributions from April, May and June 2020 is 31 March 2022.
VAT on electric vehicles
On 9 February 2022, the Official Gazette published the Rules on Amendments and Additions to the Rules on the Implementation of the Law on Value Added Tax. The new provisions enter into force on 10 February 2022. The Regulation defines the motor vehicles which are exempted from the limitation of the right to deduct. These are vehicles falling under CN codes 8703 80 and 8711 60 and other motor vehicles without carbon dioxide emissions falling under CN codes 8703 90 and 8711 90. It also sets out how the total cost of using vehicles for non-business purposes is to be determined where VAT deduction has been claimed. In calculating the total cost of using a vehicle for non-business purposes, the following are to be considered:
- the actual number of kilometres driven for non-business purposes; or
- the number of kilometres driven for non-business purposes, determined as the difference between the total kilometres and the number of kilometres driven for business purposes for the period for which the taxable person establishes the total cost of using the vehicle for non-business purposes; and
- the maximum non-taxable amount of the reimbursement of business travel expenses per kilometre travelled applicable on the last day of the period for which the taxable person establishes the total cost of using the vehicle for non-business purposes (currently EUR 0,37).
Self-employed person with normalized expenses can also obtain a credit rating
The new rules also allow freelance entrepreneurs with normalized expenses to obtain a credit rating (for tendering, obtaining soft loans, etc.) when submitting their annual report by 3 May 2022. The basis for the credit rating is the published annual report, which will be available at the beginning of June 2022.
Activities in the public interest exempt from VAT
The Law on Value Added Tax was amended at the beginning of 2022 to exempt activities in the public interest from VAT. Only specific services and directly related supplies of goods and services can be exempted. The range of these is dealt with in Article 42 of the VAT Act. The first exemption is linked to the type of service and, in addition to this, Article 42 of the VAT Act also imposes a condition for certain services that they be supplied by a specified person.
Amendments to the Income Tax Act (Zdoh-2Z)
The National Assembly adopted amendments to the Income Tax Act at its meeting held on 11 March 2022. The amendments will gradually raise the general deduction, relieve capital income, change the way part of salary is paid for business performance and bonuses for electric cars, while also introducing changes to the deductions for sole traders. If the law is also adopted by the National Council, the changes will come into force for 2022. The changes can broadly be divided into 3 parts:
1. Relief from employment income:
- The gradual increase in the general tax relief results in a higher net payment for the same gross salary: the net minimum salary under the proposal would be 770.78 EUR (previously 757.45 EUR), the net average salary would be 1,358.22 EUR (previously 1,336.55 EUR) and the double of the average salary would be 2,495.07 EUR (previously 2,467.57 EUR),
- The rate of taxation in the fifth income tax bracket is reduced from 50% to 45%,
- Changes to the payment of the performance component of salaries: no taxation up to 100% of the average monthly salary of employees in the Republic of Slovenia or up to 100% of the average monthly salary of the employee, including salary compensation, paid for the last 12 months by the employer, whichever is more favourable for the employee.
- Zero bonus for electric cars
- An additional allowance of 1500 EUR per year is introduced for a resident over 70 years of age and for a resident who, in accordance with the regulations on protection against natural and other disasters, voluntarily and non-professionally carries out operational tasks of protection, rescue and assistance for a continuous period of at least 10 years and is kept on the register by the administrative authority responsible for protection, rescue and assistance.
2. Relief from business income
- Exclusion of exempt contributions from the tax base: Compulsory social security contributions paid on behalf of the taxable person by the Republic of Slovenia or a self-governing local authority in accordance with specific regulations are not considered as income and are not recognised as an expense of the taxable person. This provision will also apply for 2021, so it is advisable to wait until the amendments to the law come into force to file your 2021 tax return.
- Changes to the allowances for employment, subsidies, practical work in vocational training, a new allowance for investment in digital and green transition.
3. Relieving rental income and capital income:
- Rental income: the tax rate is reduced from 27.5% to 15% and the normalised expenditure will be 10%,
- For capital income, the rate of taxation is reduced from 27.5% to 25% and the period for taxation is shortened. The holding period threshold for tax-free ownership will now be 15 years,
- Rental income and capital income are taxed on a cedular (definitive) basis. It will be up to the taxable person to decide whether to include the above income in the annual tax base, and he/she must invoke this decision in an objection to the informative calculation.