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Taxation in Slovenia
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Taxation in Slovenia

Corporate Tax

Main rate: 23%

Resident companies are taxed on worldwide income; non-resident companies are taxed only on Slovenian-source income. Companies that have their head office or place of effective management in Slovenia are resident for tax purposes. Tax is charged at a flat rate of 23% (in 2007, to be reduced to 22% in 2008, 21% in 2009 and 20% for subsequent years). This rate is reduced to 10% for companies operating in a special economic zone. Dividends received are exempt from tax. An ordinary credit is granted to eliminate double taxation of dividends where dividends received from a foreign subsidiary are not exempt. The credit method also applies to eliminate the double taxation of foreign income. Partnerships, which are treated as separate taxable persons for tax purposes, are subject to corporate income tax.

Individual Tax

Progressive rates up to 41%

Personal income tax applies to the income of individuals. There are six categories of income: income from employment, business income, income from agriculture, income from capital (dividends, interest and capital gains), property income (royalties and rental income) and other income. Dividends, interest and capital gains are taxed at a flat rate. The tax rate for dividends is 20% and for interest income 15% (20% after 2007).

Income tax on the other categories of income (known as "active income") is paid during the tax year in the form of advance tax payments. Advance tax payments are determined according to special tax rate schedules or flat tax rates.

There are three tax brackets in the annual tax schedule for active income. The progressive tax rates are: 16%, 27% and 41%. Advance tax payments paid during the tax period are deductible from the final tax liability, and any difference is collected on receipt of an assessment from the tax authorities. When the total sum of advance payments exceeds the tax payable, a refund is available.

Capital Gains

Taxed at the same rate as other income

Fifty per cent of capital gains derived by companies from the sale of shares in another company is exempt from corporate income tax if the seller has held more than 8% of the subsidiary for at least six months. If the seller terminates its operation before the expiration of ten years from the year of its establishment, the capital gains that were exempt from taxation for the last five years will be added to the taxable base in the last corporate income tax return submitted to the tax authorities for the last year of operation. Conversely, 50% of capital losses are deductible for corporate income tax purposes.

For individuals, the tax rate on capital gains depends on the length of time the property has been held: a 20% rate applies where the property is held for up to five years; the rate is 15% if the property is held from five to ten years, 10% if held from 10 to 15 years, 5% if held from 15 to 20 years; and 0% if the property is held for more than 20 years. This tax is treated as a final tax for both residents and non-residents. These rules apply to gains from the sale of shares and gains from real property.

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