The National Assembly has passed a package of changes to six tax-related laws that the government says will make the economy more competitive, attract skilled foreign staff and promote innovation and investment. Businesses have voiced their criticism though.

Changes to the income tax act bring incentives for the hiring of skilled foreign staff under the age of 40, which would apply to both foreign nationals and Slovenian nationals returning to the country after two years studying or working abroad.

If they receive monthly pay that is at least two times higher than the average wage in Slovenia, they will receive an incentive in the amount of 7% of their gross pay for five years.

Some business representatives have described the solution as discriminating against those who have not worked or studied abroad.

The criticism was echoed in parliament on 14 November by the opposition Slovenian Democratic Party (SDS), while a member of the Left, the junior ruling coalition party, suggested it would be more sensible for the provision to be tied to sectors with staff shortages.

Non-residents working and paying taxes in Slovenia will no longer need to prove the income earned in Slovenia is not taxed in their home country, which is another measure aimed at stimulating the hiring of foreign workforce.

The changes moreover allow start-ups to postpone the taxation of employee bonuses and reduce the costs for employers to reward workers with stock options.

Changes affecting sole proprietors

In the change that earned harshest criticism from businesses and the opposition alike, the ceiling for sole proprietors to be included in the flat rate income tax scheme will be reduced from €100,000 to €60,000 of annual income, and for part-timers from €50,000 to €30,000.

In a move welcomed by business, changes to the Income tax act will make it possible to carry over tax breaks for the green and digital transition that companies are not able to use for up to five years.

Tax benefits for corporate fleet EVs are being extended by five more years as well. The changes also introduce tax exemptions for subsidies for farming in less favoured areas.

Simplifications, higher tax on sugary drinks

With the changes to the VAT act two EU directives are being be transposed into Slovenian law to simplify international operations for small businesses and increase the threshold for charging of VAT from €50,000 to €60,000 of annual turnover.

The changes also introduce a possibility for multiple companies in a group to have a single VAT number.

They also increase the VAT rate for drinks with added sugar or sweeteners from 9.5% to 22%.

The changes to the tax procedure act aim to implement the decision of the Constitutional Court related to legal consequences of tax evasion. The government has also included other provisions to reduce red tape and increase the efficiency of tax collection.

In preparation for potential future real estate tax, changes to the act on mass valuation of real estate simplify certain parts of the process to set up models for real estate valuation. Property owners will be informed of the value of their property in writing once by the end of 2025. Afterwards they will be able to access it in a database online or request to have it in writing.

Changes to the corporate income tax act will limit tax loss relief to five years, introduce the option to carry over tax breaks for the green and digital transition five years after the investment, and remove the option to determine a tax base using flat rate expenses.

Changes to the act on fiscal validation of invoices will set up a system to report information on sales through vending machines to the Financial Administration (FURS).

Most changes will enter into force on 1 January 2025, while the changes to the act on fiscal validation of invoices will enter into force a year later.

While welcoming some of the changes, the largest business associations have denounced the package as unsystemic, piecemeal and poorly designed. Most of all they wanted for the tax burden on wages to have been reduced.