|EXPATRIATE AND EMPLOYER TAX COMPLIANCE AND ADVISORY|
|Personal Income Tax Rates – Employment Income|
|Tax rate||Progressive tax rate: 16% – 50%.|
|Tax period||Calendar year|
|Tax residency / Domicile according to domestic law||Permanent place of living in Slovenia.
Temporary place of living or “centre of economic and social interests” in Slovenia.
Present for more than 183 days during a calendar year in Slovenia.
|Tax registration||Individuals with permanent or temporary place of living are registered automatically.
Other Individuals shall register before the first receipt of taxable income
|Employment income definition||Any income paid in cash or in kind related to the employment (the law contains non-exhaustive list of employment related income)|
|Examples of tax exemption||Mandatory social security contributions, supplemental pension insurance premiums (under certain conditions), reimbursement of costs (like travel costs, meal costs, travel allowance, etc. in the amount determined by the government regulation), jubilee awards, severance payment for dismissal and retirement (under certain conditions in the limited amount)|
|Specific expatriate concession||From 1 January 2018, the following specific provisions for expats apply. The purpose of the recent amendments is to enhance cross-border mobility of employees in Slovenia.
For expats, the amount of 20% of the salary or remuneration received by expat is tax exempt, but not exceeding EUR 1,000 per month, if the following conditions are met:
For the purposes of Personal Income Tax Act, we are talking about posting to work abroad or about cases where a special tax base can be claimed if the following circumstances are fulfilled:
The following cases are, notwithstanding the above conditions, justified for the special tax base, irrespective of whether the posted worker remains in an employment relationship with his current employer or not:
Regarding the enforcement of the special tax base the ZDoh-2 prescribes certain additional restrictions, which must be checked in each specific case.
Non-taxable reimbursement of the costs to expats include the following:
– for transport between place of residence at the time of posting and the place of work at the place of posting in accordance with the Government Regulation;
– for transport to the place of posting at the start of the posting and for transport from the place of posting at the end of the posting.
|Income of board members||Treated as employment income (executive as well as non-executive)|
|Tax returns||Local employment agreement – the employer is responsible for the monthly tax compliance.
Foreign employment agreement – individual tax compliance, a tax return needs to be submitted by the employee within 15 days after receipt of the first income at any change of the amount of the income a new tax return would need to be filed within 15 days of receipt of the altered amount. Non-residents are obliged to submit the tax return every month.
|Tax payments||At the time of payment (if withheld by the employer), within 30 days after receipt of the decision (if paid by the employee).|
|Tax on real estate property|
|Employment income / income from board members||Art 15/16 Model OECD Tax Convention|
|INTERNATIONAL SOCIAL SECURITY|
|Cross border employments||EU Regulation No 883/2004 and EU regulation No. 1408 / 71.|
|Exception under Art 16 of Reg. 883/2004
and Art 17 of Reg. 1408/71
|Social Security Cost as % from gross salary and absolute amounts||Due by the employee: Pension insurance: 15,5%, Health insurance: 6,36%, Maternity protection: 0,1%, Unemployment insurance: 0,14% (overall: 22,1%).
Due by the employer (on top of gross income): Pension insurance: 8,85%, Health insurance: 6,56%, Accident at work and occupational disease: 0,53%, Maternity protection: 0,1%, Unemployment insurance: (0,00 – 0,3 %) (overall: 16,04% – 16,34 %).
Note: no cap for payment of Social Security Contributions
|Work permit||Nationals of EU, EEA and Switzerland do not need a work permit to perform work in Slovenia
Nationals of other countries need to obtain a proper work permit to work in Slovenia
|Visa||EU and EEA nationals do not need a visa to enter into Slovenia although their duration of stay may be subject to restrictions
List of nationals of other countries that may enter Slovenia without visa (usually up to 90 days) is available at: http://www.mzz.gov.si/fileadmin/pageuploads/konzulara/Tujci_vstop_v_Slovenijo_brez_vizumov_slo.pdf. For non-listed countries visa can be obtained in general from the competent Slovene diplomatic mission in their country of residency and / or nationality
|Residency permits / registration certificate||EU and EEA nationals need to apply for a registration certificate before staying for more than 90 days
Non EU and EEA in general need to apply for a residency permit
|Driving license||EU and EEA nationals can use foreign driving license and can also apply to exchange it for the Slovene driving license (if they fulfil certain other conditions).
Given that there is a reciprocity, other nationals can use their local (foreign) driving license up to one year since registration of their living in Slovenia. After six month of their living in Slovenia, they can obtain (exchange it for) the Slovene driving license (for which they need to fulfil certain other conditions).
|STOCK OPTION PLAN||Usually taxed at exercise, although tax treatment depends upon the conditions of the Stock Option Plan.|
|ARTICLE 15 OF THE OECD MODEL|
|183 days|| Number of days on the territory of Slovenia including:
-the weekly rest days
-the vacation days obtained within the activivty performed in Slovenia
-sickness or occupational accident days off (unless due to health reasons a person would like to leave Slovenia but cannot do it)
-part days in Slovenia
-days of departure and arrival
Moreover, all the stays in Slovenia during the period of 12 months/calendar year must be added up
|Notion of employer||In principle, the employer is the person towards who the employee is in a situation of legal subordination (Legal employer).However, the fact that the services rendered by the employee are an integral part of the business activities carried on by the company which benefits from these services does not imply on its own that this company in becomes the employer : it is necessary to study further all the criteria set out by Article 8.14 of the comments of the OECD model to determine if this company becomes the employer. In the tax ruling issued by the Financial Administration, reference is made to Article 8 of the comments of the OECD mode.|
|Existence of a permanent establishment|| See the criteria of the tax treatyIn countries where no tax treaty was signed with Slovenia –> national legislation applies, it closely follows the OECD model convention definition of permanenet establishment:
– the place of business through which the activities or transactions of a non-resident entity are partly or fully carried on within the territory of Slovenia;
– a construction site, a project involving construction, assembly or mounting, or the related supervision, if the duration of the activities concerned exceeds 12 months;
– an agent acting on behalf of a non-resident, provided that he holds and habitually exercises an authority to conclude contracts on behalf of the non-resident; and
– an independent agent, who acts in his own name for a non-resident, (such as a broker) where the conditions and circumstances are different from the commercial and financial relations between non-related person.
|Head of Tax, AOS & Payroll|
|Direct line: +386 40 534 522|
|Address: Verovskova ulica 55A, 1000 Ljubljana, Slovenia|