The Slovenia Times

Tax changes designed to improve competitiveness


Ljubljana - Changes to three major tax laws that the government adopted yesterday are designed to improve the competitiveness of the Slovenian economy. While income tax changes alone are expected to reduce annual tax receipts by EUR 276 million, Finance Minister Andrej Šircelj says public finances remain sound.

"Public finances are perfectly stable and aligned with the Stability Programme, on the basis of which we will be reducing the deficit in the coming years," Šircelj told the press on Thursday, adding that the shortfall will be offset with higher economic growth.

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.

"While gross wages will remain the same, take-home pay will increase," Šircelj said. Once the general allowance rises to EUR 7,500, the annual gains for a person earning average wage will be a thousand euro.

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%.

As for corporate income tax, new breaks will be available for digital and green investments. Additional tax breaks of up to 45% will be available for the hiring of employees whose skills are in short supply, for example in medicine and computer science.

The proposed changes to the taxation of capital are more moderate, according to Šircelj.

Šircelj said the blueprint set the course of tax policy towards lower rates of taxation and motivating people to pay taxes.

The minister expects that the legislation will be passed before the summer.


More from Economy