Tax is important to the economy in Slovenia, as it helps fund essential services for all citizens and residents of the country. All employees and businesses pay income tax, and consumers pay a sales tax, or Value Added Tax (VAT), on purchases.
Income tax
All citizens and working residents are subject to income tax. Income tax rates are calculated into five tax brackets, with tax rates calculated based on varying income levels. The tax brackets are reviewed and updated every year, but currently range between 16-50%. Residents in Slovenia who have been there for at least 183 days of the past year, are required to pay tax on their worldwide income, while those who had resident status for less than 183 consecutive days over the past 12 months, only need to pay tax on income earned within the country.
The financial tax year ends on December 31st, with individuals required to file their taxes by March 31st. Penalties can be applied if the submission is made after the deadline. If an individual's income is less than the designated income threshold, then they do not need to file for that year.
Corporate income tax is currently 19%, but that rate can also change yearly. If the head office of the company is internationally based, tax is only paid on the income from Slovenia.
Good to know:
In Slovenia, capital gains, interest, dividends, and rental income are taxed at a rate of 25%.
Sales tax (VAT)
The VAT is a tax charged to all consumers for purchases of goods and services, and is currently at a rate of 22%. Slovenian exports are not liable for this tax. All businesses who earned more than 50,000 euro over the previous 12 months are required to register for the VAT.
Double taxation agreements
Slovenia partakes in double taxation avoidance agreements with a wide range of EU and non-EU countries. This is designed as an incentive to invest in the country, and prevents residents with dual citizenship or dual residency from being taxed twice on their income. The tax is paid in the non-resident's country of origin, if that country has signed a double tax treaty with Slovenia. The tax rate for this is currently 17%.
The current list of countries who participate in this agreement can be found in this list of double taxation conventions.
Other taxes
Other taxes to be aware of include inheritance tax, gift tax and land tax. In Slovenia, gifts and inheritances are taxable, with the recipient or heir being held accountable for the tax payment. The rate is dependent on the value of the gift and the relationship between the donor and the recipient, but can range between 5-30%.
Land tax is also imposed on land sales, and is taxed at a rate of 2% of the value of the property, after being evaluated by the local authorities.
Goods and excise duties may also be applicable on goods imported into the country. Goods subject to excise tax include tobacco, alcohol, energy products (such as natural gas and coal) and electricity.
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