Companies surveyed by GZS largely support proposed tax tweaks

Ljubljana – A survey conducted by the Chamber of Commerce and Industry (GZS) among 140 companies has shown that the majority supports the proposed tax changes for the 2022-2025 period. Half of them would set the cap on social security contributions at gross wages of between EUR 4,000 and EUR 5,000, which would bring in around 6,100 new high-paid jobs.

Presented by the government in May, the amendments to the personal income tax act look to gradually raise the general allowance by 2025 from EUR 3,500 to EUR 7,500 and to cut the rate of tax in the top income bracket from 50% to 45%.

Credits and net annual tax bases are to be adjusted to inflation again, and 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%.

Around two-thirds of the companies are inclined or very inclined to changes to personal income tax and corporate income tax, while 55% support the proposed changes in value added tax (VAT).

Some 40% of the surveyed companies expect moderate to large increase in employment as as a result of the changes, while 46% expect a similar positive change in added value, and more than half in net profit, the GZS said on Tuesday.

Companies are particularly inclined to the rise of the general allowance to EUR 7,500, lower tax rates on dividends and capital gains, reduction of the taxation period and the proposal for different criteria for performance bonuses.

They are also inclined to new indexation of personal income tax brackets with inflation and reduction of the rate of personal income tax in the top income bracket from 50% to 45%.

When it comes to changes related to VAT, the surveyed companies support the most the exercise of VAT deduction for business cars with zero CO2 emissions , while the abolition of the threshold for the mandatory entry of farmers in the VAT system received the weakest support.

As for corporate income tax, they advocate the most the possibility of exercising a reduced tax base with a new break for green and digital transition and more favourable treatment of expenditure for provisions for long-service bonuses.

The companies also responded to the idea to introduce a cap on social security contributions, with two-thirds of them expressing support.

Half of them would set it at gross monthly wages of between EUR 4,000 and EUR 5,000, 30% would set it at between EUR 5,000 and EUR 6,000 and a fifth between EUR 2,600 and 4,000.

International companies assessed how many new jobs such a cap would bring, saying that there would be 5,000 such jobs in the EUR 50,000-100,000 annual wage bracket, 1,000 in the EUR 100,000-200,000 bracket and 100 in the bracket above EUR 200,000.

In the survey conducted between 1 and 14 June, 23% of the respondents were large companies, 30% medium-sized companies and 47% were micro and small companies.