REPUBLIC OF SLOVENIA MINISTRY OF FINANCE

FINANCIAL ADMINISTRATION OF THE REPUBLIC OF SLOVENIA

Šmartinska cesta 55, PO Box 631, 1001 Ljubljana, Slovenia T: +386 1 478 38 00

F: +386 1 478 39 00

E: gfu.fu@gov.si

www.fu.gov.si

INTERNATIONAL TAXATION

Taxation of non-residents in Slovenia

Detailed description

1ST version, AUGUST 2016

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TABLE OF CONTENTS

1. INDIVIDUALS ....................................................................................................................... 3 1.1 Non-resident of Slovenia .............................................................................................. 3

1.2 Source in Slovenia ......................................................................................................... 3

1.3 Coming to work in Slovenia .......................................................................................... 4

1.4 Coming to Slovenia to study ......................................................................................... 4

1.5 Coming to Slovenia after retirement ............................................................................ 5

1.6 Non-residents income - exemptions ............................................................................. 5

1.7 Relief for residents of EU Member States or EEA ......................................................... 6

1.8 Non-submission of tax number for non-residents (exception) .................................... 7

1.9 How is personal income tax paid for non-residents ..................................................... 7

1.10 The benefits under the Double Taxation Conventions ............................................... 7

1.11 Issue of confirmation of tax paid ................................................................................ 8

1.12. Non-resident taxation - other taxes ........................................................................... 8

1.13. Social security contributions ...................................................................................... 8

2. ENTERPRISES .................................................................................................................... 9 2.1 Corporation Income Tax ............................................................................................... 9

2.2 Withholding tax ........................................................................................................... 10

2.3 Taxation of the business unit (BU) or a permanent establishment (PE) of foreign

enterprises in Slovenia ...................................................................................................... 12

2.4 Taxation of the business unit (BU) or a permanent establishment (PE) of foreign

enterprises under the provisions of the international treaties on avoidance of double

taxation of income (DTA) .................................................................................................. 13

2.5 Examples of business activity in Slovenia ................................................................... 13

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1. INDIVIDUALS

1.1 Non-resident of Slovenia

The following persons are deemed non-residents:

• persons not resident in Slovenia, i.e. those who do not have permanent residence in

Slovenia, whose center of economic and personal interest is not Slovenia, and who are

present in Slovenia for less than 183 days in any individual tax year,

• persons with diplomatic or consular status of a foreign country in Slovenia,

• persons working as employees or officials of international institution,

• persons in Slovenia as a result of employment at a diplomatic office, consulate or

international mission of a third country,

• employees of institutions of the European Communities, European Central Bank or

European Investment Bank in Slovenia,

• persons employed in Slovenia as foreign experts in work for which Slovenia lacks

sufficient qualified personnel (approval required from the Slovenian tax authority),

• persons living in Slovenia exclusively for the purposes of study or treatment.

Non-residents are only liable to pay personal income tax on income whose source is in

Slovenia.

Further information about the residency status of a person can be found in FAQ - Residency

status.

1.2 Source in Slovenia

Income is deemed to have a source in Slovenia as follows:

• if employment is served or services are provided in Slovenia,

• if the income is paid by a Slovenian resident (a Slovenian legal entity or private

individual) or a business unit of a non-resident (a business unit of a foreign legal entity

in Slovenia),

• if the non-resident pursues business activities at or via a business unit or permanent

establishment in Slovenia,

• income from real estate and rights on real estate in Slovenia, including the capital gains

from the disposal of the real estate,

• income from securities and equity issued by the Republic of Slovenia, the Bank of

Slovenia, local authorities, companies, cooperatives, etc. established in Slovenia,

including the capital gains generated by the disposal of such.

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1.3 Coming to work in Slovenia

When you come to Slovenia to work, it is important to know:

A natural person with permanent or temporary residence in the Republic of Slovenia shall be

registered in the tax register ex officio by the financial office on the basis of data from the

Central Population Register. If the Central Population Register does not contain all information necessary for entry into the

tax register, tax authorities ask the natural person to submit the missing information in eight

days.

A foreign natural person, who achieves taxable income or is the owner of taxable movable or

immovable property in the Republic of Slovenia, shall submit the application for entry of the

individual into the tax register a form DR-02.

The application shall be submitted before the first receipt of taxable income or before the first

acquisition of ownership of taxable movable or immovable property.

As the rule, the application shall be submitted to the competent tax office (local branch office)

for the payer of incomes (exemptions are General Financial Office and Special Financial Office).

When the payer of incomes has no seat in Slovenia, the application shall be submitted to the

financial office competent for the territory where the income is planned to be achieved.

If there are more payers of incomes or if the income is planned to be achieved on the territory of

several financial offices, the foreign individual shall submit the application to the financial office,

competent for the payer/territory of first income.

If a you only come to Slovenia to work for a short period of time (less than six months), you are

considered to be a non-resident of Slovenia, and stay resident of a country, where you

previously worked or lived, unless you establish residential ties (e.g. habitual abode or the

centre of vital interests) in Slovenia prior to the expiration of those six months. After six months,

it is important to settle your residency status by either going to the local offices of the Financial

Administration and filling in the Questionnaire: Determination of residency status – entering the

Republic of Slovenia or downloading the questionnaire from the previously mentioned link. The

questionnaire is not mandatory; you can simply file an application for the determination of your

residency status.

More information can be found in section Questions & Answers.

1.4 Coming to Slovenia to study

When a person come to Slovenia to study, it is important to know:

If you are a foreign student, coming to Slovenia, you are, according to the Article 7 of the

Slovenian Personal Income Tax Act, a non-resident of Slovenia, if you are coming to Slovenia

for the sole purpose of study. In case you are coming to Slovenia to study and work (more than

is needed for your life expenses as a student), you will also stay a non-resident for the first six

months, unless you establish residential ties (e.g. habitual abode or the centre of vital interests)

in Slovenia prior to the expiration of those six months. After six months, it is important to settle

your residency status by going to the local office of the Financial Administration and filling in the

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Questionnaire: Determination of residency status – entering the Republic of Slovenia. The

questionnaire is not mandatory; you can simply file an application for the determination of

residency status.

If you are, as a foreign student, planning to work in Slovenia, you have to obtain a tax number

(for the purposes of receiving your earned income), which you get at the competent local office

of the Financial Administration. You have to fill in a form DR-02.

More information about tax numbers for foreign individuals can be found here.

More information about taxation of student’s remuneration can be found in section Questions &

Answers.

1.5 Coming to Slovenia after retirement There are a lot of situations, where people, who used to be residents of Slovenia, went abroad,

lived and worked there for several years and therefore became non-residents of Slovenia. After

retirement they are coming back to Slovenia. The following explanation also applies to people,

who were never residents of Slovenia, but they decided they want to enjoy their retirement here.

They both need to settle their residency status by both going to the competent tax office (local

branch office) and filling in the questionnaire: Questionnaire: Determination of residency status

– entering the Republic of Slovenia or downloading the questionnaire from the previously

mentioned link.

The questionnaire is not mandatory; they can simply file an application for the determination of

their residency status.

If they are indeed planning to stay in Slovenia and they will establish residential ties here, they

will be considered as Slovenian residents.

Determination of tax residency for people receiving pensions from foreign countries is of high

importance. Most Double Taxation Agreements (DTA) stipulate that pensions shall be taxable

only in the state of residency of the person receiving such a pension. Therefore, if a person

decides to permanently live in Slovenia, receives pension from a foreign country and is a

resident of that country (existence of DTA with that country), she or he has to settle her/his

residential status according to the new circumstances, so they can be taxed in the country,

where they newly established residential ties (Slovenia).

More information can be found in section Questions & Answers.

1.6 Non-residents income - exemptions

Non-residents are exempted from paying personal income tax on:

• capital gains, provided that the source of the capital gain is in Slovenia (the issuer of the

security is the Slovenian government, the Bank of Slovenia or a company established in

Slovenia), and the security or equity disposed of by the non-resident is not part of a dominant

equity holding,

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• residents of EU Member States do not pay personal income tax on income from savings in the

form of interest payments (in accordance with the EU Savings Tax Directive1 whose source is in

Slovenia, provided that they are the beneficial owner of the aforementioned income,

• non-residents do not pay personal income tax on income from employment received for work

at a foreign diplomatic or consular office, an international institution in Slovenia, or an EU

institution in Slovenia,

• non-residents do not pay personal income tax on income earned by the pursuit of business

activities (with the exception of income from appearing as a performer or athlete), provided that

the business activity is not pursued via a business unit in Slovenia, and they are present in

Slovenia for less than 183 days in any period of 12 months, and under the further condition that

it is not income on which withholding tax is levied (in accordance with the law governing

corporate income tax, withholding tax is charged on income if the taxpayer earns the income

pursuant to the Personal Income Tax Act as part of the pursuit of business activities;

withholding tax is also charged on payments earned by the taxpayer as part of the pursuit of the

business activity of appearing as a performer or athlete),

• non-residents do not pay personal income tax on interest from securities, issued by the

Republic of Slovenia on the basis of the act, which arranges public finance,

• non-residents do not pay personal income tax on interest from debt securities, issued by

companies, established under regulations in Slovenia, on condition that debt securities not

contain an option of exchange for holding equities and they be included into trade on the

organised market or traded within the multilateral trade system in an EU Member State or

OECD Member State, except for debt securities, issued for payment of indemnity under the act,

which arranges denationalization.

1.7 Relief for residents of EU Member States or EEA

Individuals residents in EU Member States or EEA may claim the general relief, personal relief,

special personal relief for residents, who independently perform a specialized profession in the

field of cultural activity, or a profession of a journalist or an athlete, a relief for supplementary

pension insurance and a special relief for dependents in the annual personal income tax

declaration, should they submit one, provided that they demonstrate that their income earned in

Slovenia from employment or from the pursuit of business activities or basic agricultural and

forestry activities or incomes from renting property and transfer of property rights and other

incomes, constitutes at least 90% of their taxable income in the tax year, and if they prove that

in the residence state incomes, achieved in Slovenia, are excluded from taxation or they are not

taxed.

With the purpose of exercising the above-mentioned relief residents of EU Member States or

EEA shall enclose the completed "EU/EEA – Tax relief application", certified by a foreign tax

authority, with the annual declaration for assessment of personal income tax.

1 Council Directive 2003/48/EC of 3 June 2003 on taxation of savings income in the form of interest payments, OJ L 157 of 26 June 2003.

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1.8 Non-submission of tax number for non-residents (exception)

There is no need to submit a tax number to the income payer prior to the payment of income to

a non-resident who earns only occasional income in Slovenia, and does not have a Slovenian

tax number. In such instances the Slovenian payer must obtain the non-resident’s name,

address, identification number and country of residence.

1.9 How is personal income tax paid for non-residents

Personal income tax is paid on all payments to foreign individuals during the year. The personal

income tax prepayment is considered a non-resident´s final tax.

If the income is being paid to the non-resident by a Slovenian legal entity or sole trader, the

latter withholds the personal income tax for the non-resident. If the income is being paid by a

person who is not a taxpayer in Slovenia (e.g. a foreign payer), the recipient must declare the

income for the personal income tax prepayment to be made in Slovenia. (Forms for declaration

of assessment of personal income tax prepayment on individual types of income).

Income from employment is generally taxed in the country where the employment is served.

Non-residents who earn income from employment paid by a foreign legal entity that is not a

taxpayer in Slovenia submit the form for the declaration for the prepayment of personal income

tax on the employment income to the relevant tax office.

Non-residents who earn income from other contractual relationships that is paid by a Slovenian

legal entity or sole trader may lodge a request with the relevant tax office for a reduction in the

taxable base on income from employment (from another contractual relationship) for transport

and accommodation costs. As the personal income tax prepayment is reduced as a result of the

actual costs claimed and recognised, the tax authority issues a ruling refunding the non-resident

for the tax paid in excess.

1.10 The benefits under the Double Taxation Conventions

The following benefits can be claimed as a result of double taxation conventions by foreign

individuals (non-residents) earning income in Slovenia:

• non-taxation in the source country (Slovenia), where the double taxation convention

confers the right of taxation solely in the country where the income recipient is based,

• taxation in the source country (Slovenia) at a lower rate, which usually arises on three

types of income: dividends, interest and property rights; the rate ranges from 5% to

15%.

Non-residents have two possibilities for claiming the benefits that they enjoy under double

taxation conventions taxed at source in Slovenia:

• a reduction or exemption in the payment of tax, if under the double taxation convention

the income is taxed at a lower rate or is exempt from tax in Slovenia. The non-resident

income recipient must submit a claim to the taxpayer (the Slovenian payer) before the

income is paid. Only when the claim has been approved and received from the tax

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authority the taxpayer can pay the income and charge tax at a lower rate, or not

calculate and withhold tax on the income,

• a refund of tax paid in excess: if the taxpayer (the Slovenian payer) has charged tax at

higher rates irrespective of the benefits set out by double taxation convention, the non-

resident income recipient can request a refund of the tax. If tax has been charged on

income that under the double taxation convention is exempt from taxation, the full

amount of the tax paid is refunded to the income recipient.

Non-residents can claim benefits on forms for claiming the benefits of double taxation

conventions, there being a claim form defined for each type of income.

1.11 Issue of confirmation of tax paid The tax authority in Slovenia issues confirmation of tax paid in a particular tax year to non-

residents at their request. The confirmation serves non-residents as the basis for claiming the

deduction of tax paid in Slovenia, or exemption from the payment of tax in the country of

residence.

Request for issuing the certificate on paid tax in the Republic of Slovenia

1.12. Non-resident taxation - other taxes

On 1 January 2014, a new estate tax was introduced. This tax was annulled by the

Constitutional Court on 31 March 2014. A former real estate taxes and duties, which applied

before 1 January 2014 were reinstated.

Foreigners owning real estate in Slovenia are liable to pay property tax in accordance with the

civil tax act (private individuals only), and the building land use charge (legal entities and private

individuals) in accordance with the building land act and municipal ordinances on the building

land use charge.

Foreign owners who sell real estate are liable to pay real estate sales tax in accordance with the

real estate sales tax act.

Non-residents (both legal entities and private individuals) also pay boat tax vessels under the

aquatic vessels tax act and act on balancing public finances. Foreign owners of boats are

obliged to pay this tax on boats more than 5 m in length that are entered in the boat register in

Slovenia.

More information about taxation of non-residents, vat refund when leaving Slovenia and

distance selling is available in a detail description International taxation – general explanations.

1.13. Social security contributions

Employees in an employment contract with their employer situated in Slovenia are required to

pay social security contributions in Slovenia regardless of their tax residency status, if they are

required to integrate into the social security system of Slovenia. This depends on EU Social

Security Coordination rules for workers from EU Member States and on bilateral treaties on the

social security for workers from other counties. Social security system in Slovenia consists of 5

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types of compulsory social security contributions instituted by the Social Security Contributions

Act.

The types and the rates of contributions the employees and the employers are required to pay

can be found in the following table:

Type of Social Security

Contribution

Employee’s rate Employer’s rate

Pension and Disability

Insurance

15,50 % 8,85 %

Health Insurance 6,36 % 6,56 %

Insurance for Parental

Protection

0,10 % 0,10 %

Unemployment Insurance 0,14 % 0,06 %

Injury and Illness Insurance 0,53 %

Total Amounts 22,10 % 16,10 %

2. ENTERPRISES 2.1 Corporation Income Tax According to the provisions of the Article 3 of the Corporate Income Tax Act taxpayers shall be

legal entities of domestic and foreign law. A taxpayer shall also be a company and/or any

association of persons (partnerships and other corporate forms, investment funds etc. as

residents), including a civil law company subject to foreign law, which does not have legal

personality and is not considered a taxpayer subject to the personal income tax.

A resident shall be a taxpayer who meets on of the following conditions:

- the residents registered office is located in Slovenia;

- the residents place of effective management is located in Slovenia.

A non-resident shall be a taxpayer who meets neither of the above mentioned conditions.

Subsidiaries of a foreign legal entity in Slovenia are under the provision of the Corporate

Income Tax Act considered as a resident of Slovenia and liable to corporation income tax.

Foreign enterprise that performs business activities in Slovenia through a branch or in any other

similar way is a non-resident of Slovenia. According to the Article 4 of the Corporate Income

Tax Act non-residents are only taxed on Slovenian source income. Income of a foreign

enterprise or a sole entrepreneur/self-employed person has a Slovenian source when its

business is carried on in or through a business unit (BU) of a non-resident (permanent

establishment - PE) situated in Slovenia. As a consequence only income that a foreign

enterprise (non-resident) earns through or in a business unit situated in Slovenia is taxed in

Slovenia. Foreign enterprise is also taxed in Slovenia on the types of income that are subject to

withholding tax.

According to Article 6 of the Corporate Income Tax Act a business unit of a non-resident (BU)

for tax purposes is defined as a fixed place of business through which the business of a foreign

enterprise is wholly or partly carried on in Slovenia.

The term BU or PE as defined above includes primarily:

an office, a branch, a factory, a workshop, a mine, a quarry or other place of extraction

of natural resources

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a building site or construction and assembly project including the supervision and

counselling activities connected with it, if it exists for more than 12 months counting

from the date of the start of auxiliary and preliminary works.

Apart from that, BU also includes a person (natural or legal) acting in Slovenia on behalf of the

foreign enterprise if they have, and habitually exercise in Slovenia, an authority to conclude

contracts in the name of that foreign enterprise, unless their activities are limited only to the

purchase of goods or merchandise for that enterprise.

BU would also include brokers, general commission agents or any other agents of an

independent status carrying on their own business if a foreign enterprise partly or wholly carried

on business in Slovenia through them and if the relationship between the foreign enterprise and

the agent were not the one between two independent market participants or two associated

enterprises.

2.2 Withholding tax Withholding tax in Slovenia is imposed on certain amounts and types of corporate or business

income with the Slovenian source paid to non-residents.

According to the Article 70 of the Corporate Income Tax Act the tax shall be calculated, withheld

and paid at the rate of 15% on the income of residents and non-residents – other than dividends

and income similar to dividends paid through a non-resident’s BU located in Slovenia – whose

source is in Slovenia, i.e.:

Dividends and income similar to dividends. Income similar to dividends shall be

considered hidden profit distribution made to a person who directly or indirectly holds at

least 25% of the value or number of shares or holdings in the capital, management or

control of the payer or controls the payer on the basis of a contract or in a manner

different from relations between non-associated enterprises. Hidden profit distribution

shall be any fee guaranteed by the payer to the person referred to in the preceding

sentence, especially the provision of all forms of assets and provision of services,

including release from a debt, without payment or at a price lower than the comparable

market price, or payment for the purchase of all forms of assets and services at a price

higher than the comparable market price or payment for assets and services where

assets were not acquired or services were not provided. The tax shall not be calculated,

withdrawn and paid on income which is paid to a non-resident, who is resident of the

EU and/or EEA member states other than Slovenia, and is a person liable for tax on

income in the country of residence, on the condition that this is not an income paid to a

BU of that non-resident in Slovenia and if that non-resident cannot claim the tax in the

country of residence, as he or she for example claims exemptions of dividends from the

tax base, and the purpose of the transaction is not tax avoidance.

Interest, except interest accrued from loans to the Republic of Slovenia or to authorized

agencies responsible for financing international business for which Slovenia provides

guarantees and bonds issued by the Republic of Slovenia or by the same authorized

agencies and except interest paid by banks unless the banks pay interest to persons or

entities in countries (non-EU Members) with the general or average nominal profit tax

rate of less than 12.5%. The list published by the Ministry of Finance of the Republic of

Slovenia and the Financial Administration of Slovenia can be found in the FAQ -

Taxation of the foreign enterprises – Withholding tax (Answer no. 6).

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Royalties, which means payments received as a consideration for the use of, or the

right to use of copyright, patents, trademarks, designs or models, plans, secret formulas

or processes or information on industrial, commercial or scientific experience

Rents received from real estate in Slovenia

Payments for performance of artistes and sportswomen or sportsmen when they

receive them through an intermediary entity

Payments for consulting, marketing, market research, services in the fields of human

resources management, administration, information technology and legal services

provided to a person or entity with a registered seat or a place of effective management

in a country with the general average nominal profit tax rate of less than 12.5%. The list

published by the Ministry of Finance of the Republic of Slovenia and the Financial

Administration of Slovenia can be found in the FAQ - Taxation of the foreign enterprises

– Withholding tax (Answer no. 6).

When the payment is made to non-residents of countries with which Slovenia has concluded the

International treaty on avoidance of double taxation of income, non-residents have two

possibilities for claiming the benefits that they enjoy under International treaty on avoidance of

double taxation of income for earning income, taxed at source in Slovenia:

reduction or exemption of tax deduction payment,

refund of tax deducted.

Non-residents can submit to the tax payer a completed appropriate request for a reduction or

exemption from the tax which they would otherwise pay in compliance with Slovene taxation law

before the payment.

If a taxpayer has not acted in compliance with Article 260 of the Tax Procedure Act and

irrespective of the privileges provided by international treaty has accounted tax at rates that are

provided by taxation law or Tax Procedure Act and in consequence of this a higher amount of

tax was paid than would have been paid in compliance with the international treaty, the recipient

of income may request a refund of tax, representing the difference between the amount of tax

was accounted by use of the rate provided by taxation law or Tax Procedure Act, and the

amount of tax that would have been accounted by use of the tax rate provided by the

international treaty.

The appropriate forms i.e. special tax forms for claiming verification of treaty entitlement or

claiming tax refunds have been published.

More information about claiming benefits under applicable international treaties on avoidance of

double taxation of income is available in FAQ – Claiming privileges from international treaties

on avoidance of double taxation of income.

Tax Procedure Act in Article 373 and 374 determines a person or entity that has the status of

the payer of tax according to Article 58 of the Tax Procedure Act to be responsible to calculate

and deduct the tax at the time of the calculation and payment of income. The payer of tax has to

remit the tax by filing the ODO-1 Form with the competent tax authority at the moment when the

income is credited to the recipient.

In the case income is credited to self-employed persons the responsibility of withholding the tax

is determined by Article 68 of the Personal Income Tax Act. Article 305 of the Tax Procedure

Act in this case also confers the task of withholding the tax to the payer of tax at the moment 15

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% when the income is paid to the recipient. At the time of remittance the payer of tax files the

REK Form to the competent tax authority.

The tax shall not be calculated, withheld and paid on the income referred to in the first

paragraph of the Article 70 of the Corporate Income Tax Act which is paid to Slovenia or a local

authority in Slovenia, the Bank of Slovenia, a resident taxpayer who has notified the payer of

his/her tax number and a non-resident taxpayer liable for the tax on income obtained by

performing activities in or through a business unit in Slovenia and who has informed the payer

about his tax number, provided the income was paid to that business unit.

According to the third paragraph of the Article 70 of the Corporate Income Tax Act the tax shall

not be calculated, withdrawn and paid on income referred to in point 1 of the first paragraph of

Article 70 of the Corporate Income Tax Act which is paid to a non-resident, who is resident of

the EU and/or EEA member states other than Slovenia, and is a person liable for tax on income

in the country of residence, on the condition that this is not an income paid to a business unit of

that non-resident in Slovenia and if that non-resident cannot claim the tax under the first

paragraph of this Article in the country of residence, as he or she for example claims

exemptions of dividends from the tax base, and the purpose of the transaction is not tax

avoidance.

There are also some exceptions which are mostly related to the EU Parent-Subsidiary Directive

and to the EU Interest and Royalties Directive that seek to ensure equal tax treatment of

transactions of dividends, interest and royalties within a Member State and transactions of

dividends, interest and royalties between different Member States in the EU thereby enforcing

the effective operation of the single market. More information is available in the FAQ - Taxation

of the foreign enterprises - Withholding tax.

2.3 Taxation of the business unit (BU) or a permanent establishment (PE) of foreign enterprises in Slovenia Tax liabilities of the foreign enterprise carrying on its business activities through or in the

business unit of a non-resident in Slovenia can be summarized in the following points:

Corporate Income Tax in Slovenia is paid through the Corporate Income Tax Return at

the rate of 19 %.The return has to be filed with the competent tax authority in 3 months

from the beginning of the current tax year for the previous tax year (usually 31st of

March when the tax year is the same as the calendar year). Different deadlines are in

place for taxpayers in special circumstances like bankruptcy procedure, mergers,

acquisitions, closure of business etc.

Tax year is the same as the calendar year by default, but the taxpayers may choose a

different tax year that coincides with their business year. This is done by a written

request to the tax authority at least 45 days before the date of the new tax year. A new

business has to notify the competent tax authority about the different tax year 8 days

after the registration in Slovenia. The tax authority confirms a different tax year to the

taxpayer by a written statement in 15 days.

The taxpayers are required to pay advance tax payments during the year. They are

calculated on the basis of the tax return of the previous tax year for the current tax year.

They are paid monthly (if the amount of the payment is more than 400 euros) or in

three-month period instalments (if the amount of the payment is less than 400 euros).

They are due on the 10th day after the period. When the taxpayer starts carrying on

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business in Slovenia it has to calculate the advance tax payment on the basis of the

planned tax return filed with the competent tax authority in 8 days after the registration

in Slovenia. The amount of the advance tax payments can be changed during the tax

year if the tax base of the business for the current tax year is different from the tax base

of the previous year. The change can be requested by a written statement 30 days prior

to the end of the instalment period to the competent tax authority to which the tax

return, estimate of the tax base for the current year and information that proves such

change has to be attached.

A business unit of a non-resident is also required to withhold the tax on types of income subject

to withholding tax. More information on tax withholding is found in the FAQ – Taxation of the

foreign enterprises – Withholding tax (Answer no. 5).

According to Article 12 of the Corporate Income Tax Act a BU in Slovenia pays tax on profits

that are attributable to the BU in accordance with the transfer pricing rules. In general, profits

attributable to the BU are defined as the profits a BU might be expected to make, in particular in

its dealings with other parts of the enterprise, if it were a separate and independent enterprise

engaged in the same or similar activities under the same or similar conditions – arm’s length

principle. Expenses which a foreign enterprise incurred for the purposes of the BU including

executive and general administrative expenses in relation to the BU, whether in Slovenia or

elsewhere, shall be allowed to be deducted from the tax base attributed to the BU.

2.4 Taxation of the business unit (BU) or a permanent establishment (PE) of foreign enterprises under the provisions of the international treaties on avoidance of double taxation of income (DTA)

The basic rule contained in international treaties on avoidance of double taxation of income

stipulates that the profits of an enterprise of a Contracting State shall be taxable only in that

State unless the enterprise carries on business in the other Contracting State through a

permanent establishment situated therein. If the enterprise carries on business as aforesaid, the

profits of the enterprise may be taxed in the other State but only so much of them as are

attributable to that permanent establishment.

In some DTA´s there is a provision about taxation of Independent Personal Services which

stipulates that income derived by an individual who is a resident of a Contracting State in

respect of professional services or other activities of an independent character shall be taxable

only in that State unless he has a fixed base regularly available to him in the other Contracting

State for the purpose of performing his activities. If he has such a fixed base, the income may

be taxed in the other State but only so much of it as is attributable to that fixed base.

2.5 Examples of business activity in Slovenia

a) Foreign enterprise carrying on business activities in Slovenia

In general, Articles 676 and 680 of the Companies Act provide for the requirement that a foreign

enterprise can only start carrying on business in Slovenia upon registration. Non-resident

companies carrying on business in Slovenia have to be entered into the Court Register and

non-resident sole entrepreneurs or self-employed persons (small businesses) carrying on

business in Slovenia have to be entered into the Business Register. However, in accordance

with EU legislation that provides for effective operation of the single market the registration rules

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are relaxed for companies and businesses from EU Member States. More information about

setting up a business in Slovenia can be found here.

Apart from this requirement, a separate register is in place for tax purposes – the Tax Register.

Article 53 of the Financial Administration Act requires all entities carrying on business in

Slovenia to be entered into the Tax Register and to receive the tax identification number (TIN).

Entities entered into one of the aforementioned primary registers are automatically evidenced in

the Tax Register as well and receive the tax identification number. The newly registered branch

of a foreign enterprise has to inform the competent tax authority in 8 days after the registration

about the number of places and the location of places of business (a place where the business

is carried on), other foreign branches abroad, capital investments at home and abroad, bank

account numbers, associated enterprises and the person responsible for taking care of the

accounting documents of the enterprise. More information on registration and tax liabilities of

foreign companies who carry on business in Slovenia can be found here.

Foreign enterprise receive notice when they entry into the Tax Register about their tax

obligations from carrying on business activities in Slovenia to encourage them to more

accurately and with greater care correctly determine the potential existence of a business unit in

Slovenia. Incorrect determination of a business unit may result in avoidance of tax liabilities in

Slovenia. The existence of a non-resident business unit in Slovenia does not keep separate

examination proceedings and shall not issue a declaratory decision. Person who meets the

conditions for the existence of a non-resident business unit in Slovenia is obliged to submit a tax

return by him/herself.

The legal entity, which on the territory of the Republic of Slovenia has neither seat of business

activities nor permanent establishment and performs economic activities in Slovenia, is

considered a taxable person for VAT purposes. More information about identification and

obligations of foreign tax payers for VAT can be found here.

b) Carrying on business in Slovenia as sole entrepreneurs or self-employed persons

(small businesses), registered abroad

Sole entrepreneurs or self-employed persons (small businesses) who are carrying on business

in Slovenia are liable to personal income tax if they are present in Slovenia for more than half a

year (183 days in a calendar year with or without interruptions) and are carrying on business

through business unit or permanent establishment, located in Slovenia.

Non-resident sole entrepreneurs or self-employed persons (small businesses) carrying on

business in Slovenia have to be entered into the Business Register. However, in accordance

with EU legislation that provides for effective operation of the single market the registration rules

are relaxed for companies and businesses from EU Member States. More information about

setting up a business in Slovenia can be found here.

Non-resident sole entrepreneurs or self-employed persons (small businesses) carrying on

business in Slovenia also have to be entered into a separate register in place for tax purposes –

the Tax Register. Article 53 of the Financial Administration Act requires all entities and

individuals carrying on business in Slovenia to be entered into the Tax Register and to receive

the tax identification number (TIN). More information on registration and tax liabilities of foreign

sole entrepreneurs or self-employed persons (small businesses) who carry on business in

Slovenia can be found here.

Sole entrepreneurs or self-employed persons (small businesses), which on the territory of the

Republic of Slovenia has neither seat of business activities nor permanent establishment and

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performs economic activities in Slovenia, are considered as a taxable person for VAT purposes.

More information about identification and obligations of foreign tax payers for VAT can be found

here.

More detailed information about taxation of residents according to worldwide income and

taxation of non-residents is available in the detailed description International taxation – General

explanations.