The Slovenia Times

Government proposing a series of tax tweaks


Ljubljana - The government has adopted amendments to three tax laws in a bid to reduce labour taxation and help businesses and individuals in the post-Covid recovery, including by increasing the general personal income allowance, reducing tax on capital and reducing red tape. The amendments are to be implemented on 1 January 2022.

Amendments to the company income tax act will allow more favourable than existing tax measures and provide a friendlier administrative framework of taxation through simplification and in pursuit of tax certainty, the Finance Ministry said in a release issued after the government session on Wednesday.

The measures include an upgrade of tax breaks for employment, for practical work in vocational training, for donations and investment in digital transformation and green transition. Recognition of certain expenditure in determining the tax base is being simplified and made more favourable.

Under amendments to the personal income tax act the general allowance will be gradually raised by 2025 from EUR 3,500 to EUR 7,500 and the rate of tax in the top income bracket will be cut from 50% to 45%, while credits and net annual tax bases are to be adjusted to inflation again.

The conditions for more favourable treatment of bonuses paid based on company performance are being made less harsh.

The rate of personal income tax on income from interest, dividend and capital gains is being reduced from 27.5% to 25%, with taxed waived on divestment as early as after 15 years of ownership. Rental income tax is being reduced to 15%.

A similar upgrade on tax breaks as in the case of company income tax would also apply to taxation of income from activities.

When using a plug-in company car for private purposes, the user will no longer pay the credit and the tax break for over 70-year-olds is being reintroduced, with changes applying to assessment and payment of ow tax on pensions and income from education funds.

Amendments to the VAT act transpose relevant EU directives and some simplifications and administrative easing on taxpayers and the Financial Administration. A paper receipt, for example, would be issued only on the customer's demand.

The amendments are planned to be implemented on 1 January 2022, except for those transposing EU directives on e-trading and administrative simplifications in the VAT act that would be implemented on 1 July this year.


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