Ljubljana, 26 August (STA) - The Finance Ministry has made additional tweaks to a proposed mini tax reform that is meant to boost competitiveness, job creation and attract highly skilled staff and is slated for government debate on Wednesday.
The original changes to seven tax laws were sent into public consultation on 3 June, and were now upgraded them based on the inputs from the public consultation.
Most of the additions concern an effort to reduce the use of the flat-rate sole proprietor system as unfair competition to regular employment, while entitlement is also being expanded for tax breaks envisaged for highly skilled workers returning or coming to Slovenia.
The taxation system for the self-employed under the lump-sum expense regime is being narrowed to those with a maximum of EUR 60,000 as opposed to EUR 100,000 in annual revenue.
At the same time, the expense limit for claiming lump-sum expenses deduction is to be raised to EUR 60,000. Full-time sole proprietors in the lump-sum expense regime are to moreover need be employed in their company.
Among the set of measures meant to help Slovenia attract highly skilled labour and catch up with innovative countries, the biggest novelty compared to the original proposal concerns Slovenian or foreign workers who are under 40 and decide to return or come to Slovenia.
The change is a reduction from five to two in the years they will need to have spent studying or working abroad so as to become entitled to a five-year 7% gross pay tax break when getting at least double the average wage.
Other measures remaining in the package are tax incentives for rewarding employees in startups, and changes to stock-based compensation to reduce costs for companies.
Additional measures are said to be envisaged in this category, among them the removal of the requirement for non-residents to prove that they have not claimed tax relief on income earned in Slovenia in their home country.
Also still in the package among measures meant to ensure a more internationally competitive and fair tax system, are special VAT groups, as part of which individual transactions would be excluded from taxation, while interest payments between related parties would also be treated more favourably.
The original package includes the plan for subsidies for farming in areas with natural and other constraints (ANC payments) to be excluded from the income tax system, as has already been the case in the past.
It also extends from one to five years the period in which tax breaks for green and digital transition can be used, and introduces a system under which the use of e-vehicles does not increase one's income tax base for five years.
Meanwhile, the ministry already announced shortly after the June unveiling of the package that it would not insist on the measure requiring vending machines for goods and services to issue receipts. Instead, only reporting data to the financial administration will be mandatory for all types of vending machines.
Some changes have also been drawn up regarding the increase in VAT for beverages with added sugar and energy drinks. The tax will rise from 9.5% to 22%, but flavoured waters are no longer included in the updated proposal.
Excise duties on beer and spirits will be increased by 7%, which could raise the price of a half-litre mug by about 2%.
The legislative package also includes an amendment to the mass real estate valuation law, which aims to simplify the process of determining real estate valuation models used to determine the generalised market value of properties. To improve the protection of personal data of property sellers, the property ID will no longer be publicly available.
