×
On 29 January 2022, the Government of the Republic of Slovenia adopted a proposal of the Act to mitigate the consequences of rising energy prices in the economy and agriculture as one of the measures to alleviate the consequences suffered by natural and legal persons due to high energy prices. It foreshadows financial assistance to the economy to be paid in a lump sum to beneficiaries by 20 April 2022. The amount of the financial assistance will depend on the level of revenues and sales and the share of the cost of energy in revenues. The financial assistance scheme is subject to approval by the European Commission and will therefore be published at a later date, with an expected minimum financial assistance amount of 50 euros and a maximum of around 2 million euros. The amount of financial assistance will not exceed 60 % of the damage suffered by the beneficiary as a result of the increase in energy prices.
Legal and natural persons who meet all the conditions set out below will be eligible for financial assistance:
The deadline for submitting the declaration for financial assistance to the Financial Administration of the Republic of Slovenia via the information system is 31 March 2022.
The proposed act also stipulates that if the beneficiary is found to have received an overpayment of financial assistance as a result of a control by the Financial Administration of the Republic of Slovenia, he/she will be obliged to repay the overpaid part by 31 January 2023.
In addition to the proposal of the Act to mitigate the consequences of rising energy prices in the economy and agriculture, the Government of the Republic of Slovenia has adopted, in the context of the above-mentioned measures, (i) a proposal of the Act on emergency measures to mitigate the effects of the impact of high energy prices, which focuses, inter alia, on improving the social security of vulnerable groups through the payment of a one-off security allowance and on the equalisation of the rights of all household consumers of natural gas; and (ii) two excise duty regulations which reduced excise duties and are applicable as from 1 February 2022.
We are happy to announce that Sanja Vujanović and Teja Podržaj were promoted to Partners in our firm. Sanja will head the litigation and dispute resolution practice, and Teja will head the employment and commercial law practice. Welcome and well deserved, ladies!
In its judgment ref. no. X Ips 61/2021 of 15th December 2021, the Supreme Court ruled that the payment of the purchase price for the purchase of own shares in a limited liability company does not constitute illicit tax evasion in regard to the taxation of the distribution of profits to shareholders per se, which according to the fourth paragraph of Article 74 of the Tax Procedure Act (ZDavP-2) occurs when taxpayers enter into transactions or several interrelated transactions without a justified business purpose, with the sole or main purpose of obtaining a tax advantage and to prevent the achievement of the objective of the tax regulation.
Simply put, the purchase price for the purchase of own shares in an independent legal transaction shall be taxed as capital gain. It shall be taxed as a payment of dividends in the case of illicit tax evasion only in connection with other concluded legal transactions that serve (only) for different taxation of a limited liability company and other persons who were involved in these transactions. The boundary between illicit tax evasion and permissible tax optimisation shall be determined by a comprehensive assessment of all relevant facts and circumstances of each individual case.
The Supreme Court further assessed whether the payment of the purchase price for the purchase of own shares may constitute a concealed payment of profits under point 7 of Article 74 of the Corporate Income Tax Act (ZDDPO-2) and concluded that only such a legal transaction, which in its amount (and not the basis) (!) represents an unjustified benefit to a qualified shareholder may represent a concealed payment of profits.
In other words, the payment of the purchase price for the purchase of own shares corresponding to the market price shall be taxed as capital gain. Only if a limited liability company pays a purchase price to a qualified shareholder (i.e., a person who directly or indirectly owns 25 % of the value or number of shares in the capital or the management or contractually controls the company or in a manner different from unrelated relationships) that is higher than the market price, the excess over the market price shall be taxed as a dividend payment.
If you have received unfavourable tax treatment in the past due to the purchase of own shares in a limited liability company, we advise you to consult your advisers regarding the legal possibilities of refunding the overpaid tax.
In the previous article, we wrote about paying attention when buying real estate in bankruptcy proceedings. This time, we will bring attention to possible pitfalls in buying real estate in enforcement proceedings.
As explained in the previous article, in principle, real estate is sold at public auctions at lower than market prices, so buyers often think that such a purchase will save a good amount of money. This may be true, but only if buyers really know what they are buying, so what is the actual and legal condition of the property.
The law determines which rights and encumbrances registered on the property shall be deleted upon sale in enforcement proceedings. With the finality of the decision on the delivery of immovable property to the buyer, pledged liens and land debts on the real estate ceases. However, personal easements, encumbrances, and building rights entered before the pledgee’s right or the creditor who proposed enforcement do not cease. The sale extinguishes other personal easements, encumbrances, and building rights unless the holders of these rights agree otherwise with the buyer.
Therefore, it should be noted that the court only determines by a decision on the allocation of immovable property to the buyer which rights and encumbrances registered on the real estate are deleted. This means that if buyers want to avoid losing the security with certainty if they do not decide to purchase the property, they are obliged to check the property’s condition before paying the security. Therefore, if the buyer does not decide to buy because he finds out in the decision on the allocation of immovable property to the buyer that the property’s condition is different than he thought, he loses the security.
After issuing the decision on the allocation and after paying the purchase price, the court issues a decision that the property is handed over to the buyer, and the property right is registered on it. The court determines the deadline when the debtor needs to move out of the family house or apartment with the same decision. Such a decision is an enforceable title for the vacating and handing over of the property. However, beware, a debtor (as the owner) that lives in a sold family house or apartment, in some cases has the right to live in that house as a tenant for another three years counting from the date of sale. The debtor must submit such a proposal within 60 days of receiving the decision on enforcement or at the latest until the auction hearing. He is obliged to pay the rent for the for-profit apartment throughout the lease.
However, the sale of real estate does not affect the rental or lease relationship related to the sold property. The buyer thus “steps in the shoes” of the previous owner (the debtor) as the landlord or lessor. Suppose the lease or rental relationship arose after acquiring the creditor’s lien or land debt on the real estate. In that case, the buyer could terminate such a contract with a one-month notice period, regardless of the legal or contractual deadlines.
It is crucial to be attentive and careful, and consulting an expert will certainly save many grey hair.
In these (post) corona times, there is an increased supply of real estate (commercial and residential) that is selling at forced public auctions, either in enforcement or bankruptcy proceedings. Despite the crisis, real estate is still becoming more expensive, which means that many people think buying a property at a forced auction will save a good amount of money. Is this so?
The answer may be affirmative, but the same as with the classic real estate purchase, it is necessary to be careful when buying real estate in bankruptcy proceedings. Also, the new buyer is differently protected when buying real estate in bankruptcy or in enforcement proceedings. In the first part, we will explain the purchase of a real estate in bankruptcy proceedings.
The law stipulates that by paying the purchase price for real estate sold in bankruptcy proceedings, the court, at the proposal of the bankruptcy administrator, issues a decision on handing over the real estate to the buyer, deciding that the conditions for entering ownership in favour of the buyer are met. The purchase price payment thus terminates certain rights of third parties, namely the lien or mortgage and the land debt, regardless of when these rights were established. However, personal easement, real encumbrance, or building right ceases solely if acquired after the commencement of bankruptcy proceedings or after the earliest mortgage or land debt entry in the land register. Thus, for example, the right to the usufruct, use, or easement of an apartment registered before the commencement of bankruptcy proceedings does not cease and remains registered. This means that if the debtor has established a right of usufruct in favour of a third party before the commencement of the bankruptcy proceedings, the new owner will acquire only a bare right of ownership. In contrast, a third party will actually enjoy it.
Special rules also apply to purchasing real estate in personal bankruptcy proceedings if the subject of the sale is a residential or family residential house in which the debtor lives as the owner. In such a case, the court orders the debtor to vacate the property within three months of receiving the decision and hand it over to the buyer – as will be explained in the second part – in such a case, the new buyer is more secure than when buying the property in enforcement proceedings. However, it will still pass some time before the new owner can start using the property.
In case of leases, the law designates that the bankruptcy administrator acquires the right to terminate the lease concluded before the commencement of the bankruptcy proceedings. The length of the notice period shall be one month, notwithstanding the general rules laid down by law or contract. However, if the bankruptcy administrator does not take advantage of this option, the lease also affects the new buyer.
Finally, potential buyers should note that purchasing real estate in the proceedings in the topic does not include guarantee for material defects. It is considered that the buyer is aware of the property’s condition, so it is worth paying particular attention. In any case, it is recommended to talk to an expert before buying, as that can prevent many difficulties.
On 1 September 2021, an amendment to the Decree on the tax treatment of reimbursement of costs and other income from employment (the Decree) entered into force for private sector, which affects the tax treatment of transportation costs to and from work. The changes will apply to expenses for September 2021, which employers are expected to pay in early October.
Under the new regulation, the reimbursement for transportation costs to and from work shall not be included in the tax base of income from employment up to the amount of:
Determining the reimbursement of transportation costs to and from work under the amended Decree has the following advantages:
On Tuesday, 14 September 2021, the European Court of Human Rights (“ECHR”) issued a judgment in the case of Pintar and Others v. Slovenia, ruling that expropriated investors did not have the possibility of an effective remedy in Slovenia in national bank’s extraordinary measures canceling shares and bonds in in 2013 and 2014,
The judgment refers to a total of seven applicants, one of whom was represented by our law firm, who filed legal remedies due to the lack of appropriate legal proceedings in which they would have the opportunity to challenge the extraordinary measures of the Bank of Slovenia, on the basis of which eligible liabilities of banks ceased in 2013 and 2014. For the applicants, the concrete measures meant the termination of their shares and subordinated bonds
The disputed decisions of the Bank of Slovenia were based on the provisions of Slovenian law, in particular the Banking Act. According to the ECHR, the latter are appropriate in terms of accessibility and predictability, but any interference with the peaceful enjoyment of assets must be accompanied by procedural guarantees that provide the affected individual with a reasonable opportunity to present his case to the responsible authorities in order to effectively challenge measures.
The ECHR ruled that the shares and bonds in the present case constituted assets within the meaning of Article 1 of Protocol No. 1. to the European Convention for the Protection of Human Rights and Fundamental Freedoms (“ECPHRFF“), which stipulates that every natural or legal person is entitled to the peaceful enjoyment of his assets and that no one shall be deprived of his assets unless in the public interest, in accordance with the conditions laid down by law and in compliance with the general principles of international law. Consequently, the termination of the specific shares and bonds constituted an interference with the applicants’ assets.
According to the ECHR, neither the claim for damages under the Banking Act nor other legal remedies used by some of the applicants provided a reasonable possibility to challenge the decisions of the Bank of Slovenia or claiming damages. At the same time, the interference with the applicants’ assets was not accompanied by an adequate procedural guarantee, so the interference was not lawful within the meaning of Article 1 of Protocol No. 1 to the ECPHRFF.
The ECHR emphasized in particular that, in accordance with the ECPHRFF and under the supervision of the Committee of Ministers, the country must take appropriate general and specific measures to guarantee the applicants the rights that have been violated. Measures must also be taken in respect of all others who are in the same situation as the applicants. All of them must therefore have access to legal proceedings which will enable them to challenge effectively the interference with their assets as soon as possible.
The ECHR did not award the applicants pecuniary damage, explaining that it could not speculate on the outcome of the proceedings if the applicants could effectively challenge these decisions in proceedings corresponding to the country’s procedural obligations under Article 1 of Protocol No. 1 to the ECHRFF. However, it awarded them non-pecuniary damage and the costs of the proceedings, explaining in relation to non-pecuniary damage that the fact that they could not claim damages and were in uncertainty as to the legal remedy that would enable them to do so caused distress to the applicants.
In accordance with the Employment Relationships Act, parents of first-graders today have the right to paid absence from work due to accompanying the child. The employer is obliged to allow the employee who is the parent of the first-grader to be absent from work, and the employee must provide the employer with prior evidence of his absence, which shows that his child will attend the first grade in the following school year.
The right to parental absence from work due to accompanying a first-grader on his or her first day of school described above applies to both parents and to all employees, regardless of the type of activity or sector in which they work. It was included in the Employment Relationships Act with an amendment adopted on 18 December 2019.
More current changes are brought about by the amendment to the Kindergartens Act, which today introduces a free kindergarten for another child from the same family who is at the same time in kindergarten with an older child. In addition, parents will now be exempt from paying for kindergarten for the third and each subsequent child from the same family, regardless of whether he or she will be enrolled in kindergarten at the same time as his or her sibling.
Furthermore, the amendment to the Kindergartens Act also brings more powers to the school inspection, tightens the conditions for the protection of pre-school children and provides for stricter sanctions for misdemeanors. Thus, natural and legal persons who are not entered in the register of providers of publicly valid programs or in the register of guardians of pre-school children are immediately banned from carrying out pre-school education and childcare activities and fined in the range of EUR 5,000 to 10,000.
On 16 July 2021, the National Assembly adopted an amendment to the Road Traffic Rules Act (ZPrCP), which, among other things, is increasing penalties for telephone users while driving and for parking in places for the disabled, while reducing penalties for speeding. The amendment is also introducing the possibility of turning right at a red light and is setting out the conditions for the participation of light motor vehicles in road traffic, which include electric scooters. The amendment enters into force on 11 August 2021.
Due to the increasing use of telephones, the penalty for using a telephone while driving is being increased from 120 euros to 250 euros and 3 penalty points. The fine for violating the ban on stopping or parking in a designated parking space for the disables is also being increased from 80 euros to 200 euros, while penalties for speeding are being significantly reduced.
The amendment determines the meaning of the red light and the traffic sign for turning right at the red light. The new rule stipulates that a driver is allowed to turn right at a red traffic light, to which a traffic sign allowing to turn right at a red light (a green arrow pointing right on a black background) has been added, but only if the direction is free.
The amendment also determines the conditions for the participation of light motor vehicles in road traffic (motor-driven wheelchairs, scooters, skateboards, etc.). Drivers of light motor vehicles must ride on a cycle lane, bike lane or cycle path. Where such traffic areas are absent or non-transportable, the drivers may drive along the right edge of the directional carriageway of the road in a settlement where the maximum permitted speed is limited to 50 km/h. Driving of electric scooter is only allowed to persons over 14 years of age, and the driver (and passenger) is required to wear a properly fitted protective bicycle helmet until 18 years of age.
Drivers, who disregard the importance of special light and sound signs installed on priority vehicles, vehicles for escort and accompanying vehicles, and drivers, who join or overtake such vehicles are treated more strictly. The amendment also stipulates an appropriate lateral distance for overtaking cyclists and drivers of light motor vehicles and mopeds, which must be at least 1.5 meters.
The powers of municipal wardens and toll inspectors are also being expanded, as they will be able to control the area of common traffic, the approach to intersections, and the conditions for the participation of light motor vehicles in road traffic. They will also be able to monitor the use of winter equipment in traffic.
The Financial Administration of the Republic of Slovenia started a three-week tax vacation on 26 July, which will end on 13 August 2021. During this time, taxpayers will not be required to submit documentation, and FURS will perform only emergency procedures. Exceptions are also claims for VAT refunds, where due to the short deadlines for refunds and the taxpayer’s interest in the process, the process proceeds as usual. However, FURS will be prepared for taxpayers who will want to perform certain activities, such as the assessment of real estate transfer tax, assessment of tax on motor vehicles, inheritance, and gifts. Irrespective of the holidays, FURS will perform work in the field of supervision with taxpayers in proceedings where dates have been previously agreed. If the taxpayer is not available, the Financial Administration will send him a written invitation after 15 August.
We are pleased to announce that attorney Matic Novak joined our team as Senior Counsel and will be heading our M&A department.
Matic has more than ten years of post-qualification experience in regional M&A and Financing transactions. His transaction track record and negotiation skills, as well as experience in corporate litigation and international arbitration, are a valuable addition to our law firm and will provide great added value to our clients.
Until recently, the lease of business buildings and business premises (the so-called business lease) was in detail regulated by the Business Buildings and Business Premises Act (Zakon o poslovnih stavbah in poslovnih prostorih; “ZPSPP”), which was adopted in 1974. In relation to the general Obligations Code (Obligacijski zakonik; “OZ”) the ZPSPP represented a special regulation that set forth special regulation of certain sets of issues in the area of business leases, namely:
Article 52 of the Act Amending the Housing Act (Zakon o spremembah in dopolnitvah Stanovanjskega zakona; “SZ-1E”) repealed the ZPSPP in its entirety. However, the legislator has determined that, despite the repeal, the provisions of the ZPSPP shall continue to apply to lease agreements concluded before SZ-1E’s entry into force (i.e. before 19 June 2021).
In the past, the ZPSPP has been the subject of numerous criticisms, the most important of which were probably its conceptual outdatedness and ever changing and inconsistent case law, but it nevertheless represented a certain constant in the field of business leases. The issues regulated by the ZPSPP would probably require a more modern and comprehensive regulation by the legislator, which calls into question the sense of a sudden and simple repeal of the entire ZPSPP. Such a decision by the legislator could lead to a considerable lack of clarity in the area of business leases.
The repeal of the ZPSPP means that, as of 19 June 2021, tenants and lessors of business buildings and business premises shall comply with the provisions of the more general OZ, in particular, the provisions on lease agreements, when regulating mutual legal relationships. On the one hand, the repeal of the ZPSPP allows the parties to business lease agreements greater freedom in regulating their mutual legal relationship, however, on the other hand, this requires much greater care and more detailed contractual regulation of business leases.
Given the repeal of the ZPSPP and the (current) absence of case law in the field of business leases after the repeal of the ZPSPP, we advise clients to be more careful when concluding business lease agreements and to conclude as detailed contractual arrangements as possible, taking into account the provisions of the OZ. In this manner, the parties may avoid, as far as possible, the risks related to the content of the legal relationship related to the business lease.
On 17 May 2017, the European Parliament and the Council adopted Directive (EU) 2017/828 on shareholders’ rights, also called the Shareholders Rights Directive II (hereinafter: the Directive), amending and revising Directive 2007/36/EC. One of the Directive’s substantive sections is intended to regulate related parties’ transactions, and the associated protection of the company and its (minority) shareholders (Article 9c), as the related parties’ transactions can be detrimental to companies and their shareholders since they allow related parties to “seize” property belonging to the company. Therefore, guarantees to protect the interests of companies and shareholders are of the utmost importance.
The very issue of the regulation of related parties’ transactions in the Directive has been one of the most controversial among Member States. As a result, a number of compromise solutions have been reached, including the need to regulate the issue in national legislation, leaving Member States a wide margin of manoeuvre in the implementation. In Slovenia, the Directive was implemented with the amendment of the Companies Act (ZGD-1K). It should be noted that the level of protection of the interests of companies and shareholders was already high before the amendment, as ZGD-1 contained many provisions intended to regulate transactions with related parties. Following the German law (verbundene Unternehmen), Slovenia has a fairly detailed regulation of concern law, which regulates the same issues as the Directive when it comes to related parties’ transactions.
The existing rules have already regulated the elimination of conflicts of interest when concluding related parties’ transactions with a company official (Article 38a). The rules on the subsequent formation (Article 188), the preservation of capital (Article 227), the transfer of at least 25 % of the company’s assets (Articles 330 – 332), affiliated companies (Articles 527 – 562), legal status transformations and changes in share capital shall be mentioned as well. Regarding transactions with members of management or supervisory bodies, the company’s loans to members of bodies and executive directors have been specifically regulated (Article 261) and the approval of the supervisory board for contracts determining the rights and obligation of members of management and supervisory bodies has been envisaged (Article 262). It has been already stipulated that the company shall be represented by the president of the supervisory board in relations with the members of the management board (Article 283) and that payments to members of the supervisory board and non-executive members of the management board shall be determined by the articles of association or the general meeting (Article 284).
The provisions of the Directive regarding related parties’ transactions have been substantially implemented in the new provisions of Articles 281.b to 281.d, applying only to public limited companies whose securities are traded on a regulated market. A different regulation is envisaged for transactions with company officials and related persons, as the rules also apply to non-public public limited companies and in some cases also to limited liability companies. Company officials are also subject to stricter regulation under Article 270a in relation to new provisions of Articles 284a, 290a and 515a of ZGD-1. The amendment ZGD-1K has also interfered with Articles 38a and 261, the former of which was almost completely deleted, and supplementing the latter.
Related parties are considered to be related companies and individuals as defined in international accounting standards. In any case, members of the management and supervisory bodies of the parent company, affiliate companies, joint ventures and companies controlled or jointly controlled by a member of the management or supervisory body of the company or the parent company are included in the definition. According to ZGD-1, the aforementioned subjects are defined as related companies, but according to the international standards, this definition may be significantly broader. In defining significant transactions, the amendment ZGD-1K determined one quantitative indicator, namely 2.5 percent of the value of assets shown in the balance sheet form the last approved annual report. Related parties’ transactions do not include only legal transactions, but also various measures of a factual nature, whereby it is essential that assets are transferred from the company to another entity, such as the sale and purchase of assets, order and provision of services, use and relinquishment of the use of objects and rights, financing and provision of guarantees, and provision of collateral for claims. In Article 281b are exhaustively specified exemptions, where the transactions are not considered to be related parties’ transactions.
The related parties’ transactions are still concluded by the company’s management as its legal representative; however, they require an approval by the competent authority. The amendment ZGD-1K designated the supervisory board in companies with a two-tier management system and the board of directors in companies with a one-tier management system as such a body. The amendment also extended the application of the rules on the obligation to submit a transaction for approval to non-public public limited companies and limited liability companies that meet criteria for medium and large companies. All companies, unless the company is organised as a limited liability company and does not have a supervisory board, must also establish an internal procedure for regular verification, whether the transaction falls within the scope of regular activities and is concluded under normal market condition. In case of a “regular” transaction, consent is not required, unless otherwise provided in the articles of association.
In addition to approving transactions with related parties, transparency is also essential, so the new Article 281d stipulates the obligation to publish the information on the conclusion of a transaction immediately thereafter. The company must publish the notice in accordance with Article 11 of ZGD-1, i.e., on the website of the Agency of the Republic of Slovenia for Public Legal Records and Related Services (AJPES). In addition to publication on the AJPES website, the company must also publish the same information on its website or another information system. Additionally, ZGD-1 stipulates the obligation of the controlling company to publish the conclusion of transactions, concluded by subsidiaries of the company with clients related to the company, assuming that the company would have to publish such information if it would carry out such transactions itself.
Due to the new regulation of concluding and approving transactions with related parties, the amendment ZGD-1K comprehensively regulated the conclusion of contracts, legal transactions and other legal acts between the company and its directors and supervisors. The conclusion of four types of contracts is regulated in a new or amended manner, namely contracts on performance of functions, consulting contracts, loan agreements, and transactions with the members of management and supervisory bodies.
Article 689a provides for a criminal sanction for violation of the presented provisions. A fine of 4,000 to 5,000 euros may be imposed on the management or procurator who concludes a legal transaction without the appropriate consent of the supervisory board, board of directors or general meeting. Other civil sanctions are not determined, so the principle of unlimited authority in external relations under Article 32 of ZGD-1 shall still apply.
Source: Companies Act (ZGD-1): with the amendment ZGD-1, introductory explanations by Marijan Kocbek, Saša Prelič, GV Založba, 2021.
The latest amendment to the Slovenian Companies Act supplemented the set of data that has to be included in the application for the first entry of a company into the register; in addition to the company name, activities, registered seat and other information specified by law, it must now (inter alia) also contain the information on the company’s e-mail address. The obligation to register the e-mail address, however, does not apply to newly established companies only, as all companies must harmonize their data in accordance with the new statutory requirement.
The company’s e-mail address is public information that will be published on the ePRS portal. It can be submitted for entry into the register in several places, namely at the SPOT point, AJPES branch or notary, by no later 24 February 2022.
Failure to comply with the obligation to enter the company’s e-mail address into the register is considered a misdemeanor for which a fine can be imposed on both the company and its responsible person. We thus suggest that you check whether all required information of your company is entered into the register and supplement it, if necessary.
In general, applicants can wait a disproportionately long time for response to a building inspection initiative to introduce an inspection. The latter also applies to cases of damage to buildings that occur due to inadequate renovation or construction of a facility in the immediate vicinity.
In cases such as those described above, the building inspector initiates an inspection procedure on suspicion that the building directly endangers human health and life due to injuries. It should be noted that the applicant in the inspection procedure cannot assert a claim for damages, which would claim compensation for damage caused to him as a result of improperly performed work on the neighbouring building, or compensation for any non-pecuniary damage caused to him as a result of an interference with his constitutionally protected rights. Furthermore, the subject of the inspection procedure cannot be the assertion of the inferiority of the property due to the execution of construction works on a nearby construction site.
If the building inspector finds that the building is dangerous, ie. that it directly endangers human health and life, property of greater value, traffic or neighbouring buildings, he will prohibit its owner from using the building and order that the facility is adequately insured at owner’s expense within a certain period of time or that maintenance work is carried out on the building or part of the building that is dangerous within the specified period. The building inspector will also take action if he finds that the construction is not carried out in accordance with the final building permit or that it is not in accordance with the law and other regulations.
If the owner of the damaged building believes that the damage to the building (for example cracks) occurred due to the implementation of construction work on a nearby building or. construction site, he may claim damages from the participants in the construction in a court proceeding.
If you notice damage on your own building, it makes sense to seek the help of an expert who would examine the damage, take appropriate measurements, and assess whether the damage may have occurred due to construction or works on a nearby building or construction site. Such findings may be useful in the eventual subsequent assertion of damage claims against participants in the construction.
On 1 July 2021 the provisions of Council Directive (EU) 2017/2455 dated 5 December 2017 will be transposed into Slovenian law, bringing changes mainly with regard to VAT on delivery of goods.
The VAT exemption for imports of consignments from countries outside the EU of small value, i.e. up to EUR 22, will be abolished. These shipments will be subject to VAT at the rate of each Member State. This eliminates the VAT exemption for shipments from countries outside the EU of all values.
Shipments up to the value of EUR 150 will continue to be exempt from customs duties after 1 July 2021, as will gifts worth up to EUR 45, which will also be exempt from VAT.
At the beginning of May, the Slovenian Government submitted a proposal for the Act Amending the Value Added Tax Act to the National Assembly, which has not yet been adopted.
In accordance with the provisions of the Companies Act (“ZGD-1”), the Register of Companies Act and the Decree on the registration of companies and other legal entities in the register of companies in particular the following documents are required for limited liability company incorporation:
Following the entry of ZGD-1K amendment into force, in cases of foreign shareholders (i.e. shareholders from other European Union Member States or from third countries), special attention shall be paid to the provision of paragraph 12, Article 10.a of ZGD-1, which entered into force on 24 February 2021. According to the said provision, foreign natural or legal persons shall submit appropriate evidence on fulfilment of conditions referred to in points 1 to 4, paragraph 1, Article 10.a of ZGD-1, namely:
whereby these documents shall not be older than 30 days. In cases of Slovenian natural and legal persons, the aforementioned checks are carried out in the official records by the registration authorities and notaries, ex officio.
Regarding foreign shareholders and members of management and/or supervisory bodies, it shall be noted that such persons need to be entered into the Slovenian tax register and obtain Slovenian tax numbers. With regard to the new company incorporation attention should also be drawn to the requirements of the Prevention of Money Laundering and Terrorist Financing Act regarding the identification and registration of the beneficial owners of a newly established company.
Limited liability company incorporation in Slovenia is not overly demanding, but the provisions of the relevant regulations contain a number of requirements both in terms of the required documents and in terms of formal requirements. These require future shareholders to act carefully and to plan the incorporation process in advance in order to avoid any unwanted complications with the incorporation of a company, in particular in cases where companies have to be incorporated in a short timeframe.
On 30 March 2021, the National Assembly of the Republic of Slovenia adopted an amendment to the Foreigners Act (ZTuj-2F), which entered into force on the fifteenth day after its publication in the Official Gazette of the Republic, i.e., on 27 April 2021, and will be applied on the thirtieth day after its entry into force, i.e., on 26 May 2021. The amendment introduces a new institute of a complex crisis in the field of migration, and at the same time brings some novelties, especially in the direction of tightening the conditions for the stay of foreigners in the Republic of Slovenia. The main solutions thus refer to the knowledge of Slovene language, family reunification, sufficient means of subsistence and Brexit.
The amendment tackles the emergence of a complex crisis in the field of migration, especially in circumstances where a very large number of illegal migrants would enter a certain or more areas of the Republic of Slovenia, who would at the same time express their intention to apply for international protection. Such circumstances could lead to a situation where public authorities would not be able to fully implement all their obligations, and thus such situation could also affect the functioning of other systems and subsystems. Therefore, the National Assembly of the Republic of Slovenia will be able to declare (with at least 46 votes) a complex crisis, which will temporarily suspend the implementation of the International Protection Act and thus restrict access to asylum.
The amendment introduces, among others, a requirement for knowledge of the Slovenian language at entry level (A1 under the Common European Framework of Reference for Languages) for the extension of a temporary residence permit for a third-country national due to family reunification, and at basic level (A2 under the Common European Framework of Reference for Languages) to issue a permanent residence permit to a third-country national. The scope of co-financing the participation in the Slovene language learning programs and acquaintance with Slovene history, culture and the constitutional system has also been redefined – in the amount of 50 percent of the program price -, while also limiting the categories of foreigners who will be eligible for co-financing. However, the provisions relating to the condition of knowledge of the Slovene language will not apply until two years after the amendment has entered into force.
In addition, the conditions for family reunification are being tightened as well. According to the new rules, foreigners (third-country nationals) will be able to exercise this right only after two years (and no longer after one year) of legal residence on the territory of the Republic of Slovenia have elapsed. Furthermore, in the field of demonstrating sufficient means of subsistence, reimbursements of work-related expenses, which include expenses for meals during work, transport to and from work, and reimbursement of travel expenses, are excluded from the pool of assets taken into account in the calculation.
The amendment also ensures the implementation of the provisions of the Agreement on the withdrawal of the United Kingdom from the European Union in the part governing residence rights and residence permits of citizens of the United Kingdom and their family members who legally resided in the Republic of Slovenia on 31 December 2020 and continue to reside in the Republic of Slovenia after that date, and on the issuance of a certificate on the rights of a border worker.
Most of the solutions from the amendment was met with sharp criticism from non-governmental organisations. In particular, the introduction of a complex crisis is, in their opinion, contrary to the International Convention on the Rights of Refugees, which guarantees the right to apply for international protection, and violates the principle of non-refoulement, so they have already announced (another) trial before the Constitutional Court.
The amendment to the Enforcement and Insurance Act (hereinafter: ZIZ), which is valid from 27 March 2021 onwards, enables debtors who are natural persons the possibility of individual postponement of enforcement in the event of exceptional circumstances. Previously, such a postponement for natural persons was provided for in the Seventh Anti-Corona Law, ie. PKP 7.
In accordance with the amended Article 71 of the ZIZ, the court will now be able to postpone enforcement at the proposal of the debtor or ex officio, if justified reasons are given.
As situations in which a proposal for postponement is justified, the provision considers, inter alia, (i) the case of enforcement against the debtor’s home in the case of the recovery of a monetary claim which is manifestly disproportionate to the value of the property and (ii) the case of enforcement for vacating and handing over an apartment or dwelling house which is the debtor’s home, if the debtor proves that he could not regulate the housing problem differently and the continuation of enforcement would endanger the position and interests of the debtor more than postponing enforcement and the interests of the creditor.
Furthermore, the amendment also marks as a situation in which a postponement would be justified the case when the debtor, as a consumer, asserts the invalidity of a legal transaction from a directly enforceable notarial deed. Last but not least, the reason for the postponement of enforcement can be due to other specially justified reasons shown by the debtor. With the latter, the debtor’s possibilities for postponing enforcement are noticeably expanded.
In accordance with the amendment to the ZIZ, the court will warn the debtor of the possibility of postponing enforcement in the enforcement order. In the case of enforcement against a property, the postponement will be possible only until the issuance of a sale order is issued, which the court warns the debtor in the enforcement order.
We are excited and proud to be again recognized as one of the leading law firms in Slovenia by The Legal 500.
We are very grateful to our clients and their trust in us as well as their generous contribution in this research that made this ranking possible.
The Legal 500 has been analysing the capabilities of law firms across the world, with a comprehensive research programme revised and updated every year to bring the most up-to-date vision of the global legal market. The rankings are based on a series of criteria, but simply put, they highlight the practice area teams who are providing the most cutting edge and innovative advice to corporate counsel.
We are participating in this research for many years, and it is encouraging to see development of our law firm recognized by such esteemed legal directory.
More about ranking you can see on The Legal 500 official website.
We are proud to have succesfully defended a EUR 13.5 million tax matter in relation to a transaction that was completed in 2015. Financial Administration initiated the tax audit of the transaction shortly thereafter and taxed our clients in the amount of EUR 13.5 million. After the Ministry of Finance had granted our appeal and returned the matter back to the Financial Administration, the latter had issued a (now final) taxation decision in the amount of slightly over EUR 50 thousand, thus resulting in a 99.54% reduction of the tax obligation. We are very happy for the Ministry of Finance to have objectively investigated the matter, which resulted in legimite taxation of our clients.
Due to renewed restrictions on public life and measures taken to limit the COVID-19 epidemic, including home schooling, restrictions on childcare and restrictions on public transport, the Slovenian Government extended the measure of salary reimbursement to employees not working due to quarantine and inability to perform work due to force majeure.
The amount of compensation is unchanged and amounts to 80 percent of the average employee’s monthly salary for the last three months, whereas the amount of compensation may not be lower than the minimum wage.
Due to child care, parents of children up to and including the fifth grade of primary school are entitled to compensation, if the parents cannot provide other care.
During the period of extended measures (until 30 June 2021), employers are entitled to reimbursement of the full amount of compensation paid to employees. Employers must claim the reimbursement no later than eight days from the beginning of the employee’s absence from work.
As a result of adoption of new restrictive measures due to the COVID-19 epidemic, the President of the Supreme Court of the Republic of Slovenia issued an Order amending the order on special measures from Article 83a of the Courts Act in the territory of the Republic of Slovenia on 29 March 2021, which stipulates that all hearings scheduled between 1 and 9 April 2021 are cancelled in matters which are not considered urgent under applicable regulations.
The operation of the courts is therefore again limited; the hearings scheduled between 1 and 9 April 2021 will be postponed to later dates.
A Real Estate Cadastre Act proposal, which, in addition to important systemic solutions in the area of real estate records, sets forth a new, uniform “cadastral procedure” replacing separate procedures of preparation of studies by land surveyors and of recording new or amended information as currently set forth by the Real Estate Records Act, has been published.
Under the proposed Real Estate Cadastre Act the cadastral procedure includes (i) procedures for preparation of studies and preparation of study that shall be performed by land surveyors (specific assignments in relation to entry of buildings and parts thereof may also be performed by building designers), and (ii) administrative procedures of authentication and decision-making on proposed amendments and (iii) entry of information into the real estate cadastre that shall be performed by the surveying and mapping authority. Such uniform cadastral procedure includes, amongst others, determination of land plot borders, land allotments, land consolidations, determinations of superficies rights’ and easements’ areas, entries of buildings and parts thereof and amendments of information on buildings and parts thereof.
In relation to the new cadastral procedure the proposed Real Estate Cadastre Act also has an important consequence for holders of ownership rights on real estate.
Namely, the proposed Real Estate Cadastre Act sets forth that persons entered in the land register with Slovenian PIN (for natural persons) or registration number (for legal entities) shall be notified of a cadastral procedure by an invite for participation in an act sent to their permanent residence address or address for service in such a manner that the persons receive it at least 8 days before the commencement of the act. However, persons who are not registered in the land register with Slovenian PIN (for natural persons) or registration number (for legal entities) shall be deemed to have been invited if the cadastral procedure is published in the cadastre information system at least 8 days before the commencement of the act, meaning that such persons do not need to be personally invited.
These provisions may have important consequences for a large number of persons. Based on the data of the Supreme Court of the Republic of Slovenia as of 8 January 2020 as many as 1,628,424 holders of ownership rights have not been entered in the land register with complete data, which represents as much as 15.4 % of all holders of ownership rights.
In light of the mentioned solutions of the proposed Real Estate Cadastre Act, we therefore recommend that all persons check the entries in the land register and, if necessary, affect supplementation or correction of the entered data. Otherwise, in accordance with the proposed Real Estate Cadastre Act, important legal consequences may occur.
On 9 March 2021, the first e-auction of the Slovenian judiciary, in which several bidders participated, was successfully completed. At the auction, which lasted 40 minutes, the apartment in the size of 63.8 square meters with the starting price of 39,256.70 euros, was sold for 77,000.00 euros. More than 550 e-auctions are announced in the next three months.
Since 1 February 2021, judicial auctions in enforcement proceedings may be conducted online and not merely in person at the auction venue. Online judicial auctions can be accessed through the security-supported web portal sodnedrazbe.si, which replaces publications on the websites of the judiciary and individual courts. All sales of real estate, movable property and rights that are carried out in court proceedings after 1 February 2021, are now published on one website. The execution of online public auctions is possible in the sale of real estate and rights in the enforcement proceedings, and the method of auctioning in other types of proceedings is visible on the web portal.
Access to publications is free of charge and is possible without user registration. However, for other activities, such as saving favourite matches and bidding itself, users must obtain a qualified certificate of one of the trusted service providers, and log in into the SI-PASS system, whereby the use of a one-time smsPASS password is also enabled. This facilitates easier access to the public auction, which increases the circle of potential bidders and competition, with the aim of achieving higher prices of things sold, for more efficient repayment of creditors’ claims. The online auction is locationally and timely independent, anonymous (after the confirmed application, the bidder is assigned a unique sign with the system to participate in the selected online auction) and prevents possible collusion and blackmail between individual bidders.
The portal allows you to search by multiple keys, and the interested bidder can easily register for the auction with one click. The court that called the auction confirms or rejects the interested bidder after reviewing the application and verifying the payment of the security, of which the bidder is informed via e-mail and the portal system. All users are guaranteed the authenticity of transactions, which means that bidders cannot withdraw or deny the given bids. It is also impossible to place bids before and after the time set for the online auction. The online auction starts and ends automatically, allowing the auction to be extended if a new bid arrives two minutes before the end of the auction. After the auction, each bidder receives a report on the progress of the online auction.
By decision no. UI-16 / 21-11 of 18 February 2021, the Constitutional Court temporarily suspended the implementation of the third, fourth and fifth paragraphs of the Employment Relationships Act (Official Gazette of the Republic of Slovenia, No. 21/13, as amended; hereinafter ZDR- 1) and Article 156.a of the Public Employees Act (Official Gazette of the Republic of Slovenia No. 63/07; hereinafter ZJU), which refer to the regulation of retirement of older employees with fulfilled conditions for retirement due to old age.
The Constitutional Court assessed the legality of Articles 21 and 22 of the Act Determining Intervention Measures to Assist in Mitigating the Consequences of the Second Wave of COVID-19 Epidemic (Official Gazette of the Republic of Slovenia, No. 203/20; hereinafter ZIUPOPDVE), which determined a new economic reason for termination of an employment contract in the private and public sectors. These are provisions that allow the employer to terminate an employee’s employment contract for economic reasons without justifying the reasons with a notice period of 60 days, if the employee meets the conditions for acquiring the right to retire due to old age.
As stated in the decision of the Constitutional Court, the termination of the employment contract terminates the employment relationship and thus the rights of employees arising from the employment relationship. Termination of an employment contract for older employees, who are particularly difficult to employ, would not only mean the loss of employment, but could also mean the end of their professional careers. In the opinion of the Constitutional Court, the consequences that would arise from the further implementation of a possible unconstitutional statutory regulation would be greater than the consequences that would arise if its implementation were delayed until the final decision of the Constitutional Court. Until its final decision, the Constitutional Court also withheld the effect of already served terminations of employment contracts, which were issued in accordance with the new regulation. The latter entered into force with the seventh anti-corona law, i.e., 31 December 2020, and the 60-day notice period based on the disputed regulation in the case of already served terminations of employment contracts would expire at the beginning of March.
With this provision, the Constitutional Court changed its previous position that the termination of an employment contract due to the fulfilment of conditions for acquiring the right to retire due to old age cannot endanger the rights of employees, as social security is guaranteed at the end of their professional career.
We are proud to announce that our Managing Partner Jan Sibinčič was again ranked in Chambers and Partners Global guide.
We are pleased that our clients recognized his and our team’s work, and we would like to thank everybody who helped and gave the opportunity for ranking among such amazing legal experts.
We always strive for excellence and we will do our best to keep providing quality legal service.
More on Chambers and Partners official website.
Monday, 1 March 2021, is the deadline to submit tax returns with regard to personal income tax from capital income (i.e. profit from the sale of securities and other shares and investment coupons, interest on cash deposits, other interest and dividends), rental income and tax returns with regard to profits derived from the sale of derivatives for 2020. The tax returns are submitted on the prescribed forms and can also be filed electronically, via the eDavki system.
The statutory deadline for submitting the tax returns is 28 February 2021, however, as this year that is Sunday, when the Financial Administration of the Republic of Slovenia does not work, the deadline for submitting the tax returns is on Monday, 1 March 2021.
On 5 February 2021, the eighth anti-corona act came into force (Act on Additional Measures for Mitigation of Consequences of COVID-19, “PKP8”). PKP8 prolongs some of already adopted measures as well as implements new ones. Below is a short overview of most relevant measures:
The employer must notify FURS of the payment no later than 2 months after the payment;
On 27 January 2021, the amendment to the Companies Act (ZGD-1K) was adopted, which amends and supplements certain provisions of the Companies Act (hereinafter: ZGD-1). Some novelties brought by the amendment are highlighted below.
The amendment extends the restrictions on the establishment of companies and entrepreneurs and the acquisition of partner status to natural and legal persons from another Member State or a third country. In addition, the range of criminal offences that prevent a person from becoming a founder, shareholder or entrepreneur is also noticeably expanding. The latter now also applies to criminal offences against human health and criminal offences against the general security of people and property. At the same time, there is an additional restriction on establishing, acquiring the status of a shareholder, and performing the activities of an entrepreneur for persons who have been publicly announced on the list of taxpayers who do not pay VAT in the last 12 months. An additional restriction on the establishment and acquisition of business shares in accordance with the amendment also applies to persons who have been fined by a final decision of the Market Inspectorate of the Republic of Slovenia for an offense related to unauthorized interference with the company’s share capital.
Furthermore, the amendment also interferes with the operations of limited liability companies, so that it redefines the obligation to form a supervisory board in those companies that are considered to be a subject of public interest. In such companies, the Supervisory Board must also form an audit committee, unless the amendment provides for an exception to this obligation. In addition to the above, in some cases the obligation to obtain the consent of the supervisory body and even the public disclosure of the transaction is newly determined, and a special article regulates the conclusion of transactions between the company and directors or procurators and related persons.
In addition to the registered office, the business address of the company will now have to be entered in the register. The set of data that must be included in the application for the first entry of the company in the register has also been supplemented, and the company will also have to state its business and e-mail address.
Finally, it is worth nothing the new criminal provisions introduced by the amendment. According to the amendment, new offenses are, for example, determination of a business address in contravention of the law, storage of personal data on the company’s shareholders for more than 12 months, and waiver of the obligation to publish and ensure free access to the remuneration policy and the remuneration report. The misdemeanours of intermediaries in the exercise of voting rights of shareholders, institutional investors, asset managers and voting advisers, which the amendment introduces as a new legal category in ZGD-1, have also been newly determined.
Article 59 of the Act determining intervention measures to assist in mitigating the consequences of the second wave of COVID-19 epidemic (ZIUPOPDVE) stipulates that, notwithstanding the Article 109(1) of the Personal Income Tax Act (ZDoh-2), the personal income taxable base for years 2020 and 2021 shall not include allowances received by employees for work in risky conditions, for danger and special workloads at social care providers, at the Government Office for the Support and Integration of Migrants, and at external at external contractors, who perform work at contractors referred to in Article 56 of ZZUOOP.
Also, the annual personal income taxable base does not include allowances for work due to temporary assignment to a provider in the public health service network, a provider in the public service network in the field of social care – institutional care, or a crisis accommodation provider in case of increased workload, as well as the allowances of certain public servants, employee in the field of public works, and pupils and students for work with patients and users suffering from COVID-19.
This will have impact on the calculation of rights arising from public funds, which usually take into the account the income from the personal income tax decision of the previous calendar year: child allowance, state scholarship, reduced kindergarten fee, break-time snack (malica) subsidy for pupils and students, and lunch subsidy for pupils.
By 31 January of the current year for previous calendar year, employers must report the data on employees who were paid allowances in 2020 and/or 2021 and the amount of paid allowance to the Financial Administration of the Republic of Slovenia via file called VIRIZV.DAT – data on paid allowances, which are not included in the taxable base for the annual assessment of personal income tax.
There has also been a change for personal income taxpayers regarding the allocation of a part of personal income tax for donations. A resident taxpayer can now request up to one percent (previously up to 0.5 percent) of personal income tax to be used for financing of donation beneficiaries. At least a percentage of personal income tax rounded to one tenth of the percent (i.e., 0.1 percent) may be allocated to a single beneficiary, whereby the total percentage allocated to several beneficiaries may not exceed one percent of the assessed personal income tax. The resident taxpayer is not required to submit a new request for the allocation of part of personal income tax for donations. Requests that are valid on the day of entry into force of ZIUPOPDVE, i.e., 31 December 2020, shall be considered and percentages are automatically doubled unless the resident taxpayer changes his or her request.
In order to enable funding from the allocation of part of personal income tax to the widest possible circle of non-governmental organisations, the beneficiaries of donations for the allocation of part of personal income tax are:
The Agency of the Republic of Slovenia for Public Legal Records and Related Services shall send data on all non-governmental organizations for the purposes of preparing the list of beneficiaries of donations for 2020 and/or 2021 to the Financial Administration of the Republic of Slovenia. In accordance with the Article 142(8) of ZDoh-2, the Government of the Republic of Slovenia shall determine the amendment of the list of beneficiaries of donations (for 2020 by 15 May 2021). A taxpayer who wishes to allocate a part of personal income tax for donations to beneficiaries from the amended list will have to submit a request or change in the request for the assessment year 2020 no later than on 31 May 2021.
Just before the new year, the National Assembly of the Republic of Slovenia adopted the seventh anti-corona law, called Act Determining Intervention Measures to Assist in Mitigating the Consequences of the Second Wave of COVID-19 Epidemic Intervention (“ZIUPOPDVE” or “PKP7”), which entered into force on December 31st 2020. PKP7 brings several additional measures in the field of economy, which should facilitate companies to cope with the epidemic, preserve jobs and enable the survival of activities that are not allowed to operate or act truncated. One of such measure is the obligation to pay a crisis benefit, presented below.
According to the provisions of PKP7, employers in the private sector are required to pay a crisis benefit of EUR 200 upon payment of the December salary to employees who performed work in December 2020, regardless of whether the employee performed work at the employer’s headquarters, from home or elsewhere.
An employee whose last paid salary (for the month of November 2020) does not exceed twice the minimum wage is entitled to the crisis benefit, which means that his last paid gross salary may not exceed EUR 1,881.16. From the payment of the crisis benefit in the amount of EUR 200, no social security contributions or advance payment of personal income tax are calculated and paid.
When calculating twice the last paid salary, all components of the salary are considered, which, in addition to the basic salary, are also part of the salary for work performance and benefits, and the payment for business performance, if agreed in a collective agreement or employment contract. If the last paid monthly salary of an employee exceeds twice the minimum wage, the employee is not entitled to a crisis benefit.
If the employee has not worked for a whole month, he is entitled to a proportionate share of the crisis benefit. It should be clarified that the employee is entitled to the crisis benefit for a holiday and other non-working day determined by law, if he would actually work on that day, and the crisis benefit is not due to him for any other forms of absence from work, such as due to temporary waiting for work, use of annual leave, etc. If an employee has a part-time employment contract, he is also entitled to a crisis benefit in proportion to the working time for which he has concluded an employment contract, unless the employee works part-time in special cases in accordance with the law governing employment.
Funds for the payment of the crisis benefit are provided in the budget of the Republic of Slovenia. In order to reimburse the paid crisis benefit to employees, the employer must submit a statement via the eDavki portal, stating that he has paid the crisis benefit to the employees.
The declaration is expected to be available in the second half of January and must be submitted by the end of February 2021 at the latest.
The Slovenian Government has adopted a Resolution on suspension of the deadlines for exercising the rights of the parties in court proceedings determined by legislation (Official Gazette of the Republic of Slovenia no. 190/2020; the “Resolution”), published in the Official Gazette on 17 December 2020. The Resolution has been adopted on the basis of the recommendation given by the president of the Supreme Court.
Pursuant to the Resolution, the deadlines for exercising the rights of the parties in court proceedings determined by legislation, have been suspended. The Resolution came into force on 20 December 2020 and shall remain in force until 10 January 2021. The deadlines for exercising the rights of the parties in court proceedings determined by the legislation are suspended during this time.
Suspension of the deadlines applies also to procedural deadlines in non-urgent matters, which have been suspended with the Order on special measures from Article 83a of the CA due to the declared epidemic of the infectious disease COVID-19 in the territory of the Republic of Slovenia (Official Gazette of the Republic of Slovenia no. 165/2020; the “Order”). The Order remains in force until its revocation.
The new Act Determining the Intervention Measures to Mitigate the Consequences of the Second Wave of COVID-19 Epidemic also called the Sixth Anti-Corona Act or PKP6, affects 38 laws. As the epidemic can also have an impact on the position of the parties in administrative proceedings, by restricting or preventing the conduct of proceedings, the legislator with PKP6 also intervened in the field of regulation of administrative proceedings. With the entry into force of PKP6, a new Chapter XXII.a entitled MANAGEMENT OF THE PROCEDURE IN THE EVENT OF AN EMERGENCY was added to the General Administrative Procedure Act (ZUP), which contains Article 306.a, the content of which is presented below.
It follows from the very name of the chapter that Article 306.a of the ZUP is not a temporary provision that would be valid only during the COVID-19 epidemic but will also apply in the event of natural and other serious disasters or similar emergencies to a greater extent, that can affect the position of the parties in the administrative procedure, limit or prevent the administrative decision-making of the body in the administrative procedure.
In accordance with the aforementioned amendment, the ZUP will enable the government to determine, in the event of extraordinary events, temporary measures, the bodies to which these measures apply and the period of validity of the measures. Such interim measures must be necessary, appropriate and proportionate to safeguard the position of the parties and to enable decision-making in administrative matters and will only take effect with the entry into force of a government decree in each individual case of an emergency.
Depending on the circumstances of the emergency, the government will be able to decide on one or more interim measures, choosing between the following:
Those provisional measures may be ordered only for the duration of the individual emergency, but for a maximum of three months. If the emergency lasts longer than three months, the government will be able to extend the temporary measures, but for a maximum of three months each time. In doing so, the government will have to check the circumstances of the emergency on a monthly basis and the justification of the interim measures.
Given the current situation in the country and around the world, it can be expected that the adoption of the regulation will soon achieve its purpose in terms of new government decrees based on the new provision of the ZUP.
At today’s 49th extraordinary session, the National Assembly of the Republic of Slovenia will discuss and vote on the proposal of the Act on Intervention Measures to Mitigate the Consequences of the Second Wave of the COVID-19 Epidemic (ZIUOPDVE), adopted by the Government of the Republic of Slovenia on the correspondence session dated 10 November 2020. This is the sixth package of measures (#PKP6), which seeks to mitigate and eliminate the effects and impact of the infectious disease COVID-19 in many areas of the economy, labour and employment, social protection and health care.
The proposal extends the partial subsidy measure for the reduction of full-time work until 30 June 2021, which is the final date by which an employer may order a part-time work for an employee despite the full-time employment contract. The proposal also extends the possibility to temporary lay-off an individual employee until 31 January 2021, whereby an employer must submit an application for reimbursement of benefits paid no later than 15 January 2021. The period to benefit the deferred payments of obligations under the existing loan agreements as well as newly approved loans during the validity of #PKP6 is being prolonged. Moreover, the guarantee scheme of the Republic of Slovenia for liquidity loans under the ZDLGPE is slightly changing.
As before, this package also introduces some new measures, of which we highlight (i) a partial reimbursement of uncovered fixed costs for most endangered undertakings and sole proprietors in the period between 1 October 2020 and 31 December 2020, whereby the eligible period may be extended by the Government’s decision for a maximum of six months, (ii) a possibility of concluding a fixed-term employment contact without announcing of a vacancy, but no later than 31 August 2021, (iii) a simplified procedure to inform the Labour Inspectorate of the Republic of Slovenia before starting work at home via a form available on the website of the mentioned inspectorate, (iv) work allowance in grey and red zones in the amount of 30 percent of the salary base, regardless of the declaration of an epidemic, (v) a possibility of granting a deferral of payment of tax or contribution for up to two years and a possibility of granting the payment of tax in a maximum of 24 monthly instalments over a period of 24 months, and (vi) a possibility of holding a virtual assembly during an epidemic.
The proposal also brings a significant increase in penalties for individuals who shall not respect the prohibitions and restrictions on gathering of people in public places during an epidemic. For such an offence, an individual may be fined between EUR 1,000 and EUR 10,000. An individual who shall publicly call for a violation of regulations or orders by which the competent authority prohibited or restricted the gathering of people in public places in order to limit the spread of an infectious disease, or, contrary to the latter, shall organise a gathering of people in public places, may be fined between EUR 1,500 and EUR 15,000.
On the basis of Article 83.a of the Courts Act (the “CA”) the President of the Supreme Court of the Republic of Slovenia issued on 13 November 2020 the Order on special measures from Article 83a of the CA due to the declared epidemic of the infectious disease COVID-19 in the territory of the Republic of Slovenia (the “Order”), which further restricts the work of the courts. The Order was published in the Official Gazette of the Republic of Slovenia on the same day and is in effect as of 16 November 2020 until its revocation, whereby – as the previous order of the President of the Supreme Court of the Republic of Slovenia of 19 October 2020, which was replaced by the Order – envisages the measures set out therein to be reviewed weekly.
Pursuant to the Order, all courts have been since 16 November 2020 operating in a limited extent in accordance with Article 83 of the CA. The courts thus call hearings and perform other procedural acts only in certain urgent matters set out in Article 83 of the CA; in addition, the work of courts has also not been affected in criminal matters in which criminal prosecution would become statute-barred within six months of the enforcement of the Order.
In non-urgent matters and in matters which, notwithstanding the provision of Article 83 of the CA, are not considered urgent pursuant to the Order, the courts issue decisions and serve judicial documents, however, do not hold hearings or perform other procedural acts that inevitably require the physical presence of the parties or other participants in the proceedings and also do not provide office hours. All hearings in these matters during the term of the Order are deemed canceled, unless convened by videoconference.
In non-urgent matters and in matters, which are not considered urgent in accordance with the Order, procedural deadlines have been suspended; they will start on the first day following the publicly announced revocation of the President of the Supreme Court of the Republic of Slovenia.
Finally, the Order also maintains in force the other special measures provided for in the previous order of the President of the Supreme Court of 19 October 2020.
On 24 October 2020, the so called Fifth Anti-Corona Package (PKP5) or the Act on Interim Measures for Mitigation and Elimination of Consequences of COVID-19 (ZZUOOP) came into force.
In the field of labour law, PKP5 prolongs certain measures available to the employers which have already been implemented by previous intervention acts and also introduces some new ones.
The main measures available to the employers with the aim of mitigating and eliminating the consequences of COVID-19 are the following:
EMPLOYEES TEMPORARILY WAITING FOR WORK
PKP5 prolongs the measure of temporarily waiting for work with the possibility of reimbursement of wage compensation. The employers may claim reimbursement for employees ordered to wait for work at home until 31 December 2020. The Government of the Republic of Slovenia may extend this measure for additional 6 months (however, for no longer than until 31 July 2020).
The conditions under which the employers may claim reimbursement of paid wage compensation from the Employment Service of Slovenia for employees waiting for work at home are stricter under the PKP5 as they were under previously valid intervention acts. Namely, the threshold of assessed suffered decline in employer’s revenue which represents a main condition for successful reimbursement, is higher.
The application for reimbursement should be filed in electronic form within 8 days from sending an employee to wait for work at home, but no later than on 15 December 2020.
SUBSIDIES FOR SHORTER FULL-TIME WORK
The same as previously valid intervention acts, PKP5 maintains the possibility for subsidized shorter full-time work, while the conditions remain unchanged. This measure is valid until 31 December 2020 (with the possibility of extension).
The employer must apply for the subsidies at the Employment Service of Slovenia no later than on 10 December 2020.
REIMBURSEMENT OF SALARY COMPENSATION FOR EMPLOYEES DUE TO QUARANITE OR FOR EMPLOYEES UNABLE TO WORK DUE TO CHILD CARE
Under the PKP5, the employers have the possibility to exercise the right of reimbursement of paid wage compensations for employees unable to perform work due to the ordered quarantine, provided that the employer cannot organize work from home for such employees. This option is also provided to the employers in case the employees are unable to perform work due to force majeure, which is a consequence of the obligation to care for a child up to and including the 5th grade of primary school or a child with special needs.
The employers may claim reimbursement of compensation for employees with ordered quarantine from 1 October 2020 until 31 December 2020. In case of inability to perform work due to childcare, the employers are entitled to claim reimbursement of wage compensation from 1 September 2020 onwards (also until 31 December 2020), in both cases with the possibility of extension for six months.
PKP5 sets shorter deadlines for submitting the request for reimbursement compared to previously valid intervention acts. Namely, the employers must submit the application within 8 days since the employee’s absence or within 8 days since PKP5 entered into force (if the employers claim reimbursement of wage compensation for the period prior its enforceability). In any case, the employers must submit the application by 31 December 2020.
PKP5 also sets out additional conditions and requirements under which the employers may successfully claim reimbursement of paid compensation to employees.
In addition to the above measures, PKP5 also introduces the following two novelties:
ABSENCE FROM WORK WITHOUT DOCTOR’S APPROVAL
PKP5 introduces the possibility for employees to stay at home due to illness and not perform work without doctor’s approval and confirmation. Such absence from work is permitted for maximum of three subsequent work days and only once a year. The employee should inform the employer about absence in writing (email notification is also valid) on the first day of absence.
Wage compensation for days of absence is advanced by the employer, having the possibility to request reimbursement from the Slovenian Health Institute. This measure applies until 31 December 2020 whereas the Slovenian Government may prolong it for additional six months.
THE COST OF COVID-19 TEST IS NOT CONSIDERED AS EMPLOYEE’S BENEFIT
In the event that the employers refer the employees to test for COVID-19, the payment of the test is not considered as employee’s credit rating up until 30 June 2021. If so decided by the Slovenian Government, also this measure may be extended for additional six months.
On 19 October 2020 the president of the Supreme Court issued an Order on special measures from Article 83.a of the Courts Act due to the declared epidemic of the infectious diseases COVID-19 on territory of the Republic of Slovenia (the “Order”) pursuant to Point 2, paragraph 2 of Article 83.a of the Courts Act (“CA”). The said provision of the CA authorises the president of the Supreme Court to, in cases of extraordinary events, which are specified in paragraph 1 of Article 83.a of the CA, issue an order on special measures determining the courts’ operations, taking into account the specific extraordinary event, in order to maximise regular exercise of the judiciary branch of power.
The order was published in the Official Gazette on 19 October 2020 and is in effect from 20 October 2020 until its revocation, whereby the adopted measures shall be reviewed on a weekly basis. Unlike the measures, which were adopted in March, when the courts worked only in urgent matters, the Order does not (for the time being) stop the courts’ activities, instead it only sets out certain measures intended for courts to be working as smooth as possible during the new wave of the COVID-19 epidemic.
The specific measures that were adopted by the Order relate to the following areas:
With regard to the entry into court buildings, the Order stipulates that, where possible, courts shall designate separate entry points for parties, their counsels and other users of court services on the one hand and for judges and court staff on the other hand. In doing so, preventive measures shall be taken at all points of entry in order to prevent the spread of COVID-19, including temperature checks for those entering and publication of a written notice on preventive measures imposed at the premises of that specific court.
Except in urgent matters, as they are determined by the CA:
In addition, if a person is not invited to appear in front of the court, such person is only allowed to enter the court building during office hours with prior notice.
The Order provides a possibility of conducting hearings, sessions and examinations via videoconferencing systems, provided that the technical and spatial conditions are met, and with due regard to other procedural conditions for the performance of such procedural acts.
In case hearings, sessions and examinations are not held by videoconference, the following rules shall apply:
However, if in a specific case it is not possible to follow the above-mentioned rules, the courts shall, in accordance with the Order, cancel such hearings.
From the viewpoint of constitutional and procedural rights or guarantees of the parties in court proceedings, the measure under which the (presiding) judge has the possibility to temporarily restrict the publicity of the hearing (or its part) or impose additional safety measures is also of high importance.
In addition to the measures determined by the Order, the Order also gives the possibility to the presidents of individual courts to take additional measures applicable only to specific courts. Therefore, before going to a specific court, it is necessary to check whether any additional measures have been taken for that court.
Revolut Ltd, a British fin-tech company that offers banking services, has started shifting its customers to its Lithuanian entity Revolut Payments UAB, which is a e-money institution licensed and regulated by the Bank of Lithuania, as it prepares for UK’s exit from the European Union. The move is aimed at ensuring Revolut can continue to offer the same services to its non-UK customers in case of any Brexit outcome. The process is anticipated to be completed before the Brexit transition period, which is ending on 31 December 2020.
For those worried about the shift to Lithuania, there is no cause for concern as Revolut Payments UAB is just as strictly regulated and supervised by European Union authorities as Revolut Ltd was. On the national level, electronic money institutions are supervised by central banks of European Union member states, and each such central bank is simultaneously under the supervision of institutions of the European System of Financial Supervision and under the obligation to comply with all applicable European Union regulations. In fact, Revolut Payments UAB has been operating in Lithuania under an electronic money institution licence since the end of 2018.
After the migration the Revolut accounts will remain the same in nearly every way and the users will be able to use their accounts as normal. An old GB IBAN for receiving inbound payments will be replaced with new LT IBAN, however, users will still receive payments to their old GB IBAN for two months. After this time, payments to the GB IBAN will be returned to the sender. Therefore, it is important to update IBAN details, if required. The migration brings another very important duty for customers, who must notify new Lithuanian Revolut accounts to the Financial Administration of the Republic of Slovenia (since the Financial Administration does not obtain data on foreign accounts ex officio), as well as the date of the closure of old British Revolut accounts, which is expected to be received by users from Revolut.
A taxpayer must make a notification within 8 days after opening an account, whereby the registration of a new account and deregistration of an old account may be performed at the same time. The application may be submitted in two ways: (i) electronically through e-commerce services eDavki (on DR-Račun Form) or (ii) in person or by post (on DR-02 Form for natural persons, on DR-03 Form for natural persons with an activity, and on DR-04 Form for legal persons), at any financial office (except at the Special Financial Office and the General Financial Office). The list of financial offices with contact information is published on the website of the Financial Administration: contacts. The application must be accompanied by a document showing the foreign account information (for example bank card, contract on opening a bank account, screenshot of the IBAN account) so that the Financial Office may check the correctness and accuracy of the provided data. When entering the account number, it is necessary to be careful not to enter the bank card number but the account number. More information can be found on the websites of the Financial Administration for natural persons and for legal entities.
We are proud to announce that our law firm has been ranked #Tier 3 for Corporate and Financial law in Slovenia by legal guide IFLR 1000.
Furthermore, our managing partner Jan Sibinčič has been recognised as Highly Regarded Lawyer in Capital markets and M&A legal practice area.
Sincere thanks to our clients and their generous contribution in this research. Based on your feedback we are doing good job providing quality legal service and we will try our best to do so as long as possible.
More about the ranking is available on the IFLR 1000 official website.
By decision U-I-83/20 of 27 August 2020, the Constitutional Court ruled that the temporary restriction of movement during the first wave of the COVID-19 epidemic was not inconsistent with the Constitution of the Republic of Slovenia. It assessed the constitutionality of two Government ordinances adopted to contain and control the COVID-19 epidemic, namely the Ordinance on the temporary prohibition of the gathering of people at public meetings at public events and other events in public places in the Republic of Slovenia and prohibition of movement outside the municipalities and Ordinance on the temporary prohibition of the gathering of people at public meetings at public events and other events in public places in the Republic of Slovenia and prohibition of movement outside the municipalities (hereinafter both together as: the challenged ordinances). The assessment took place in the context of the question whether the prohibition of movement of persons outside the municipality of permanent or temporary residence, determined by the challenged ordinances, was in accordance with the first paragraph of Article 32 of the Constitution, which guarantees freedom of movement to everyone.
The assessment was performed by the Constitutional Court on the basis of the legitimacy test, which means the assessment of whether a certain measure pursues a constitutionally permissible goal, and the proportionality test, which includes an assessment of the appropriateness, necessity and narrower proportionality of the measure.
The Constitutional Court ruled that the Government of the Republic of Slovenia pursued a constitutionally permissible goal by introducing a restriction of movement on the municipality of residence, ie. containment and control of the spread of the infectious disease COVID-19, and thus the protection of the health and lives of people at risk. In doing so, the Constitutional Court emphasized that the pursuit of this goal is also a constitutional duty of the state authority, as too slow or insufficient response to the occurrence of an infectious disease that can seriously endanger human health or even life could be inconsistent with the state’s obligation to protect human rights – the right to life, the right to physical and mental integrity and the right to health care.
In assessing proportionality, the Constitutional Court first as an important circumstance of the assessment pointed out the fact that the state authorities faced a high level of uncertainty when introducing measures, as COVID-19 disease was scientifically and medically unexplored at the time of the outbreak. Despite the uncertainty, the introduced measures must be based on sound reasons and assumptions that could have been taken into account at the time of their adoption, and in this context the authority responsible for managing epidemic risks has a wide margin of assessment in the choice of measures.
The prohibition on movement outside the municipality of residence is, in the opinion of the Constitutional Court, an appropriate measure to achieve the pursued goal, as it was shown that (according to the data existing at the time of the adoption of the challenged ordinances) it could contribute to reducing or slowing the spread of COVID-19, mainly by reducing the number of contacts between persons living in areas with a higher number of infections, ie. with a higher risk of transmission, and persons in areas with a lower number of infections or even without them.
In assessing the necessity of the intervention, the Constitutional Court took into account as essential that there was no indication that mere use of the measures adopted so far (closure of schools and kindergartens, suspension of public transport, etc.) would prevent the spread of the infection to the extent that all patients could be provided with adequate medical care. indicate infections to the extent that all patients could be provided with adequate medical care. Under these conditions, further measures that could prevent the spread of the infection while also maintaining the stability of the health system were necessary.
Furthermore, the Constitutional Court ruled that the measure of restriction of movement to the municipality of residence was also proportionate in the narrower sense. The latter means that the demonstrated degree of probability of the positive impact of the measure on the protection of human health and life outweighed the severity of the measure with their freedom of movement. As relevant to this assessment, the Constitutional Court considered as an important circumstance that the prohibition of movement outside the municipality of residence provided for several exceptions (eg access to pharmacies, grocery stores, arrival and departure for work, etc. was provided). In addition, the Constitutional Court emphasized that the longer the measure lasts, the more invasive the interference becomes, so it is necessary to periodically check the situation and adapt to it. The challenged ordinances did not set an explicit time limit upon their entry into force, but they were in force for a relatively short time and during the days of their validity they could not (yet) exceed the weight of their original invasiveness. At the same time, the Constitutional Court clarified that measures may cover the entire territory of the country if the areas for which the existence of risks can be established on the basis of existing professional information are scattered throughout the country and the constitutionally permissible goal cannot be achieved in any other way.
In accordance with the above, the Constitutional Court ruled that the prohibition of movement outside the municipality of residence did not disproportionately interfere with the freedom of movement from the first paragraph of article 32 of the Constitution.
In addition to the above-mentioned initiative for the assessment of constitutionality, several other initiatives were submitted to the Constitutional Court alleging the inconsistency of the challenged ordinances with the Constitution and the Infectious Diseases Act, as well as the inconsistency of certain other provisions on which the challenged ordinances are based with the Constitution, on which the Constitutional Court has not yet ruled.
In light of the COVID-19 pandemic, some parties to M&A agreements, especially in those sectors particularly affected by the virus containment measures, have been forced to start thinking about how to adapt their contractual commitments to changing economic conditions. One of the provisions that is regularly included in M&A agreements and actually allows this is the Material Adverse Change (MAC) provision. Although these provisions differ significantly from one agreement to the other, they generally allow a buyer who has otherwise signed an M&A agreement to avoid its performance (ie, transfer of business share, business, etc. and to thereby avoid fulfilling its obligation to pay the purchase price) by unilateral termination of the agreement if certain circumstances occur that affect the operation of the target to such an extent that the buyer cannot achieve the purpose of the agreement.
Due to the right they include and its far-reaching consequences, the MAC provisions, like the correlated legal construct of dissolution or amendment of an agreement due to changed circumstances (Article 112 et seqq. of the Slovene Code of Obligations), should be interpreted as narrowly as possible and used only when changed circumstances and their significant impact on a particular contractual relationship have been convincingly demonstrated.
Accordingly, it is not surprising that in many M&A transactions, sellers find it difficult to agree to MAC provisions, which leave them bearing a significant part of the risk of unforeseen deterioration of the target’s condition at a time when the M&A agreement has already been signed but not yet implemented (closed). This is all the more pronounced in cases where the buyer wishes to negotiate a more general MAC provision covering a wide range of events and circumstances. In consequence, the sellers usually demand that the scope of the situations covered by the MAC provision is as narrow and specific as possible (eg, decrease in EBITDA by a certain value), that short-term events (eg, with duration shorter than three months) are excluded, and that the onset of a material adverse change is confirmed by, eg, an independent expert. However, such detailed provision will also have positive effects for the buyer – in the case of a judicial or arbitral intervention in respect of the withdrawal from the agreement, it will be much easier to prove that there are specific circumstances that justify such withdrawal, and, in consequence, that the buyer has validly withdrawn from the agreement. What is more, in order to balance the competing interests, the parties often agree on a break-up fee, which reduces the buyer’s motivation to withdraw from the agreement.
Despite resistance of sellers to include MAC provisions in M&A agreements, the pandemic of the new coronavirus can be expected to lead to their (more) widespread use (in varying contents, depending on the bargaining powers of parties and the specifics of individual business sectors).
It is also interesting to distinguish between the MAC provisions in the M&A agreements concluded before the outbreak of the new coronavirus and those concluded after it. Namely, most of the “classic” MAC provisions do not cover material adverse changes that concern the entire industry or even broader market conditions (as opposed to individual companies). The effects which the new coronavirus pandemic has had or is having on the markets are therefore, as a rule, explicitly excluded from the scope of (existing) MAC provisions. On the other hand, the contractual freedom allows parties of new M&A agreements to allocate the risk posed by the changed business conditions for the target’s operations at their own discretion. Appropriate contractual regulation of this issue is also important considering that the new coronavirus represents a circumstance that the parties may or even have to take into account when concluding an agreement, which means that the dissolution or change of the agreement on the basis of the law itself (ie, Articles 112 et seqq. of the Slovene Code of Obligations) will generally not be available. Since the outbreak of a pandemic is already a known circumstance, it might be advisable for the parties of new M&A agreements to focus on what constitutes a “material adverse change” in the target, based on which the buyer will be allowed to unilaterally withdraw from the agreement.
Where the purchase price is financed by a loan, special attention should also be paid to ensuring that the MAC provision in the M&A agreement is in line with the MAC provision (if any) in the loan agreement, as this will allow the buyer to avoid a situation where the lending bank may cancel the loan, whereas the buyer will still be obliged to pay the purchase price under the M&A agreement.
Considering all of the above, there is one of very important weaknesses of the MAC provisions which should not be overlooked: if the parties agree that this provision will be included either as a negative condition precedent for the completion of the transaction or as an independent right of withdrawal, this may result in several years of an ongoing dispute, during which it remains completely unclear in what way and with what restrictions the seller should manage the target.
As there is no single answer to the question of whether the outbreak of COVID-19 constitutes an appropriate trigger for the withdrawal from the agreement based on a MAC provision, and, at the same time, MAC provisions in the post-COVID-19 period must be adapted to the specifics of each target, its business, etc., a careful analysis of all the circumstances of an individual case or transaction, as the case may be, is required in order to ensure an optimal solution regarding the MAC provision in an individual M&A agreement.
On 9 September 2020, the General Court dismissed Slovenia’s action against the European Commission (“EC”) in case T-626/17. With its action Slovenia requested that the General Court annuls the Commission Delegated Regulation (EU) 2017/1353 of 19 May 2017 amending Regulation (EC) No 607/2009 as regards the wine grape varieties and their synonyms that may appear on wine labels (the “contested regulation”). Slovenia’s main arguments were that by adopting the contested regulation the Commission exceeded its powers, that the contested regulation interfered with acquired rights of Slovenia’s wine producers and that adoption of the mentioned regulation disproportionately interfered with their property rights.
The contested regulation was adopted on the basis of Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (“Regulation 1308/2013”).
Paragraph 3, Article 100 of Regulation (EU) No 1308/2013 of the European Parliament and of the Council of 17 December 2013 establishing a common organisation of the markets in agricultural products and repealing Council Regulations (EEC) No 922/72, (EEC) No 234/79, (EC) No 1037/2001 and (EC) No 1234/2007 (“Regulation 1308/2013”) stipulates: “Where the name of a wine grape variety contains or consists of a protected designation of origin or a protected geographical indication, that name shall not be used for the purposes of labelling agricultural products. In order to take into account existing labelling practices, the Commission shall be empowered to adopt delegated acts in accordance with Article 227 laying down exceptions from that rule.” On the basis of the afore-mentioned provision of Regulation 1308/2013, which applied from 1 January 2014 (meaning, after Croatia’s accession to the EU), the Commission adopted the contested regulation.
The General Court established that the Commission used the above-mentioned provision retroactively, but this has nevertheless not resulted in violation of European Union (“EU”) law. Before Regulation 1308/2013, a similar provision was included in its predecessor, which was in effect on the day of Croatia’s accession to the EU. None of the provisions stipulated any time limits for actions by the Commission. As before Croatia’s accession the Commission had no territorial jurisdiction and therefore could not adopt the contested regulation, the General Court decided that the Commission acted in accordance with the general scheme and the wording of the provisions concerned.
In relation to Slovenia’s claim that by giving retroactive effect to the contested regulation, the Commission breached the principles of legal certainty, the respect for acquired rights and the protection of legitimate expectations, the General Court recalled that the principle of legal certainty precludes retroactive effect being given to EU measures, except where the objective pursued by the contested measure requires it to be given retroactive effect and the legitimate expectations of the persons concerned are duly respected.
The General Court found that the contested regulation pursued an objective in the public interest as its purpose was to protect legal labelling practices existing in Croatia on 30 June 2013 and to resolve the conflict between those practices and the protection of the Slovenian protected designation of origin. Given the sensitive nature of the issue the Commission also legitimately attempted to find a negotiated solution between the two countries, but this was not successful. Additionally, the General Court held that the Commission did not give precise, unconditional and consistent assurances to Slovenian wine producers, which would entertain well-founded expectations that no derogation with retroactive effect would be granted to Croatia concerning the use of the name “Teran” on the labels of wines produced on its territory. According to the General Court, Slovenia had not established that the extent and details of the retroactive effect of the contested regulation had infringed the legitimate expectations of Slovenian wine producers.
The General Court dismissed the afore-mentioned and other arguments of the Slovenian side as unfounded.
With its dismissal of Slovenia’s action, the General Court therefore decided that the contested regulation was adopted in accordance with the EU law. By doing so, it also confirmed that the name “Teran”, which is a protected designation of origin of Slovenian wines, may be used to refer to a wine grape variety on the labels of wines produced in Croatia. However, in accordance with the EU law the afore-mentioned name may only be used for the designation of origin “Hrvatska Istra” and only if “Hrvatska Istra” and “Teran” appear in the same visual field and if the font size of the name ‘Teran’ is smaller.
Slovenia may bring an appeal on points of law against the General Court’s decision before the Court of Justice, so perhaps the story of the use of “Teran” is not yet finished.
Applications to determine the eligible amount of state aid can be submitted by 31 August 2020
The deadline for submitting applications for determining the eligible amount of state aid, as set out in ZIUZEOP-A, expires on 31 August 2020.
In accordance with ZIUZEOP, the total amount of public funds received by a company with regard to salary compensation and exemption from contributions referred to in Articles 28 and 33 of ZIUZEOP may not exceed EUR 800,000 (or EUR 120,000 in case of a company active in the fisheries and aquaculture sector, or EUR 100,000 in case of a company active in the field of primary production of agricultural products).
Despite these limitations, the law allows large companies, which have received public funds in an amount that exceeds the above mentioned maximum values, to be allocated additional public funds (exceeding the above mentioned maximum) in accordance with the rules on state aid to compensate for damage caused by an extraordinary event. This gives large companies the opportunity to receive (or retain) public funds exceeding the maximum value, however, they have submit an application to the Ministry of Labor, Family and Social Affairs by no later than 31 August 2020 to determine the eligible amount of state aid, in which the damage caused to the company by COVID-19 must be demonstrated.
If the application is not submitted or approved, it can be expected that the received state aid will have to be returned.
On 29 March 2020, an amendment to the Law of Property Code (hereinafter: SPZ-B) entered into force, which was understandably overshadowed by the epidemic of the COVID-19 virus, given the course of events around the world. Nevertheless, it is not too late to get acquainted with the novelties of SPZ-B, as the individual provisions, which we draw attention to below, began to apply at the beginning of the previous month, ie. with 1 July 2020, and some will only start to apply with 1 July 2021.
One of the central changes brought by SPZ-B is the renewal of the register of non-possessory liens and confiscated movables, maintained by the AJPES web portal. The operation of the register will be regulated in more detail by the Government with a decree, also a more user-friendly and modern register is promised, with a direct link to some other registers and official records, such as e.g. Central population register, land cadastre and building cadastre, motor vehicle record, etc.
In addition, thanks to SPZ-B, from now on, a notarial deed will be sufficient for the creation of a consensual non-possessory lien on movable property which may also be directly enforceable in accordance with the agreement of the contracting parties.
Furthermore, SPZ-B extensively regulates the legal positions related to commonhold, namely the issue of linked property, individual parts of the building and individual plots, which also serve other commonhold or other property.
In connection with the institute of joint ownership, SPZ-B solves the problem of significantly aggravated or impossible management of the item in joint ownership that occurs in the case of inactive or unknown joint owners. Active joint owners, whose joint ownership shares represent more than half, now have the option of incident management of joint ownership in accordance with SPZ-B upon approval of the transaction by the court.
As a novelty, on the basis of SPZ-B, it is possible to establish a quasi-real easement in favour of a person who performs commercial undertaking for the public benefit and the easement is established for the purposes of performing this undertaking. Such an easement can be established for a period longer than thirty years, or even for an indefinite period. Easement in the public benefit is also transferable since the entry into force of the SPZ-B, and can be transferred to another entity that manages public utility infrastructure that is in the public benefit.
The regulation of the building title has also undergone several renovations, in connection with which SPZ-B removes the compulsory limitation of the duration to 99 years and at the same time allows the landowner and the holder of the building title to autonomously regulate the amount of compensation to be paid by the landowner to the holder of the building title after its termination.
Finally, one of the most resounding changes – SPZ-B grants a special legal status to animals. Namely, the new Article 15a states that animals are not things, but sentient living beings, whose protection is regulated by special laws.
Last year, at the beginning of July, we wrote that, as every year, in year 2019 the judicial holidays will begin on 15 July and last until 15 August. The COVID-19 epidemic has left consequences in this area as well, so this year’s judicial holidays are (only) half as long.
The new Law on Intervention Measures for Mitigation and Elimination of the Consequences of the COVID-19 Epidemic (ZIUOOPE), which entered into force on 31 May 2020, stipulates that in year 2020 courts will hold hearings and decide only in urgent cases from 1 August 2020 to 15 August 2020. Judicial holidays therefore last only two weeks this year under ZIUOOPE.
During the judicial holidays, it is considered that there are no procedural deadlines, nor are any court documents served. If the court document has been served, the deadline shall begin to run on the first day following the end of the judicial holidays. Procedural deadlines are deadlines given by the procedural law for performing certain procedural actions in the procedure. Such a deadline is, for example, the deadline for payment of the court fee.
Judicial holidays, however, do not apply to material deadlines, nor do they suspend them. Material deadlines are deadlines for exercising material rights granted to entitled person by a material law. The material deadlines are, for example, a deadline for filing the lawsuit arising from the disturbance of property and deadlines for protection of employees’ rights arising from employment relationship.
It should be emphasized that judicial holidays refer exclusively to court documents and thus do not affect service according to the rules of administrative procedure or any other non-judicial documents.
For a peaceful holiday, we advise you to consult a legal expert in case of doubt about the running of a certain deadline.
Sibinčič Križanec law firm is proud to announce that Senior Associate, Nina Čuden, has been promoted to Junior Partner.
She concentrates her practice on Corporate Law, M&A, Dispute Resolution and Commercial Contracts.
Nina, congrats on your new role!
As part of the third package of measures in connection with COVID-19 epidemic, which were adopted by the Act Determining the Intervention Measures to Mitigate and Remedy the Consequences of the COVID-19 Epidemic, the National Assembly also adopted rules on the screening of foreign direct investment (FDI). Although this measure has not received much public attention, it may be expected to have a significant impact on mergers and acquisitions, the formation of new companies, real estate transactions, etc. The provisions on the screening of FDI apply until 30 June 2023.
The screening of FDI covers investments of any foreign investor: accordingly, the screening is not limited to investments from third countries, but also includes investments of natural persons or legal entities from EU Member States. The Act covers any investment made by a foreign investor, the purpose of which is to establish or maintain permanent and direct links between a foreign investor and an economic entity with its registered office in the Republic of Slovenia. The notification threshold is set at the acquisition of at least 10% of the share capital or voting rights, and it can be expected that the screening (despite some ambiguities in the wording of the law) will not be limited to sales of shares or business stakes, but will cover a significantly wider range of foreign investments (eg, investment in tangible and intangible assets, which refers to significant changes in the entire production process of the existing business unit, as well as the acquisition of the right to dispose of land and real estate that are essential for, or located near, critical infrastructure).
Nevertheless, not every FDI is subject to screening, as the latter is limited to investments which pose a threat to the security and public order of the Republic of Slovenia. These include especially investments affecting critical infrastructure (including real estate “in the vicinity” of such infrastructure), critical technology and dual-use goods, supply of critical resources (eg energy, medical and protective equipment), access to sensitive information (including personal data), freedom and plurality of media and projects or programs in the interest of the European Union (eg Trans-European Networks for Energy). As it is very difficult to determine in practice which investments are subject to screening, and high fines are threatened for violations at the same time, it can be expected that many investments will be notified out of caution, ie, “just in case”.
The obligation to notify arises within 15 days from the conclusion of the relevant contract, the publication of the takeover bid or the incorporation of a company in the Republic of Slovenia. The notification to the Ministry of Economic Development and Technology must be made by either a foreign investor or a target or acquired company. The Ministry may approve, prohibit or cancel FDI, or determine the conditions for its implementation. The prohibition or cancellation results in the annulment of the transaction, whereas the failure to notify results in a fine in the amount of up to EUR 500,000 for the legal entity and up to EUR 10,000 for the responsible person of the legal entity.
The Ministry must issue a decision within two months of notification, but if this deadline is not met, the transaction is not considered approved. The decision of the Ministry (or the lack thereof) may be appealed to the Government.
The proposal for Act on intervention measures to prepare for the second wave of coronavirus COVID-19, which amends and supplements temporary measures to mitigate and eliminate the consequences of the epidemic in the field of labour, employment, scholarships and social protection, is pending before the National Assembly. Among other things, the proposal is interesting because it contains a basis for the introduction of an application for monitoring contacts with COVID-19 infected people and quarantine control, which could prevent the possible need for stricter territorial closure in the event of mass use. The Ministry of Public Administration will be responsible for the establishment and operation of the mobile application.
Installation and use of the application will be voluntary and free of charge, except for those persons who have been confirmed to be infected with COVID-19 or have been ordered to be quarantined. In this case, the person must install the mobile application so that a random code can be entered into it.
The purpose of the application is to inform its users about the existence of the risk of infection, because they were nearby or in contact with another user with the same mobile application who is infected or quarantined. The application contains a recommendation that in case of obvious symptoms, the person should immediately call the chosen personal doctor or the emergency medical service.
The mobile application will not be allowed to identify the user, collect information about his location and his other personal data. The government claims that the use will not involve the processing of personal data.
Tourist voucher is one of the government measures to mitigate the consequences of the Covid-19 epidemic, as the tourism is one of the economic sectors that was hardest hit by the epidemic. In June 2020, the Government adopted a decree governing the method of redeeming vouchers.
Persons over age of 18 with permanent residence in Slovenia as of 13 March 2020 are entitled to redeem the voucher in the amount of EUR 200 and those under the age of 18 in the amount of EUR 50. Beneficiaries will not receive vouchers in physical form, as the vouchers are recorded as a credit in favour of the beneficiary in the FURS (eDavki) information system, to which all service providers will have access. Vouchers are transferrable between family members, exempt from taxation and may be used in parts. They are valid from 19 June to 31 December 2020. If vouchers are not redeemed in this period, the beneficiary may not claim the voucher in cash or redeem it later.
On the day of arrival at the time of registration for accommodation or for accommodation with breakfast (service), the beneficiary must inform the service provider that he/she will redeem the tourist voucher. The vouchers are redeemed at the service provider by entering the data on the beneficiary and the amount of the redeemed voucher into the eDavki system, and the beneficiary confirms the use of the voucher by signing the prescribed form Confirmation of redeeming the voucher (Potrditev unovčitve bona) and submitting a copy of identity card or passport. The form of written confirmation of the redemption of the voucher will be delivered to the beneficiary by the service provider at the reception.
On 29 May 2020, the National Assembly adopted the Intervention Measures to Mitigate and Eliminate the Consequences of the COVID-19 Epidemic Act (hereinafter referred to as: ZIUOOPE), which has been in force since 31 May 2020, and temporary measures apply from 1 June 2020 further. Among other things, the ZIUOOPE contains a measure of partial subsidization for the reduction of full-time work and the reimbursement of salary compensation to workers on temporary lay-off.
The measures are not mutually exclusive, so that in June the employer may send some employees on temporary lay-off and order part-time work for others. Both measures aimed at preserving jobs are presented below.
With this measure, ZIUOOPE offers employers the option of ordering the employees to work part-time while also being on temporary lay-off.
The measure can be exercised by those employers (legal or natural persons) who were entered in the Business Register of Slovenia before 13 March 2020 and, in their estimation, cannot provide at least 90% of work per month to at least 10% of employees. Direct or indirect users of the state budget or the municipal budget whose share of revenues from public sources in 2019 was higher than 50% are not eligible for the subsidy.
An employer who meets the above conditions may order an individual employee with whom he has an employment contract for an indefinite period of time to work part-time during the period between 1 June 2020 and 31 December 2020. According to ZIUOOPE, during this period, the employer must provide the employee with work for at least part-time (i.e. at least 20 hours per week to 35 hours per week). An employee who is temporarily assigned to work part-time retains full-time employment and thus all rights and obligations arising from the employment relationship as if he were working full-time, except for those otherwise regulated by the ZIUOOPE. That time when the employee is not working (i.e. 5 to 20 hours per week) is considered as a temporary lay-off. For the time of the ordered temporary lay-off the employer can claim a partial refund of the salary compensation due to the order of part-time work. The latter is defined by ZIUOOPE as a subsidy.
Subsidies do not depend on the amount of salary of the individual employee, but only on the extent of the reduction in working time. Therefore, for example, the subsidy for part-time work in the range of 20 to 24 hours per week per month amounts to EUR 448 per employee, and for part-time work in the range of 30 to 24 hours per week the subsidy amounts to EUR 224 per month.
The application for subsidizing part-time work is expected to be publicly available on 12 June 2020. The employer must submit the application within fifteen days after the ordering of part-time work.
The measure of posting a temporary lay-off and reimbursement of compensation to employees on temporary lay-off was introduced under previously adopted intervention legislation, namely under the provisions of the Act Determining the Intervention Measures to Contain the COVID-19 Epidemic and Mitigate its Consequences for Citizens and the Economy (hereinafter referred to as: ZIUZEOP). The ZIUZEOP initially limited the measure of posting a temporary lay-off and partial reimbursement of salary compensation until 31 May 2020, while ZIUOOPE extended the implementation of this measure until 30 June 2020, provided that certain conditions are met.
Initially, the extension of the measure was intended only for employers in the field of tourism and hospitality, but ZIUOOPE extended this possibility. Thus, the employer whose income in 2020 will fall by more than 10% compared to 2019 due to the epidemic is entitled to state aid in the form of reimbursement of compensation. However, the measure will not be able to be exercised by an employer who is a direct or indirect user of the budget of the Republic of Slovenia or the municipal budget, whose share of revenues from public sources was higher than 70% in 2019, an employer who performs financial or insurance activities and has more than ten employees on 13 March 2020 and foreign diplomatic missions and consulates, international organizations, missions of international organizations and institutions, bodies and agencies of the European Union in the Republic of Slovenia.
The amount of partial reimbursement of salary compensation paid by the Employment Service of Slovenia amounts to 80% of salary compensation and is limited by the maximum amount of cash benefit in the event of unemployment, which amounts to EUR 892.50. At the time of receiving the compensation, the employer may not dismiss the employee who is included in the measure.
The application for reimbursement of salary compensation to workers on temporary lay-off is already publicly available, and the employer must submit it within eight days of the posting of the worker on temporary lay-off.
On 29 May 2020, the National Assembly received an urgent proposal from the Government of the Republic of Slovenia to amend the Prevention of Money Laundering and Terrorist Financing Act (the ZPPDFT-1B). The harmonization with the Union acquis follows an official reminder from the European Commission because Slovenia has not notified the regulations for transposition of Directive (EU) 2018/843, which should have been harmonized with the directive by 10 January 2020. This contribution outlines some novelties in the crypto industry field.
The amendment transposes into the Slovenian legal order individual definitions of the Directive (EU) 2018/843. Virtual currency is a digital representation of value that is not issued or guaranteed by a central bank or a public authority, is not necessarily attached to a legally established currency and does not possess a legal status of currency or money, but is accepted by natural or legal persons as a means of exchange and which can be transferred, stored and traded electronically. It defines a custodian wallet provider as a natural or legal person that provides services to safeguard private cryptographic keys on behalf of its customers, to hold, store and transfer virtual currencies.
The amendment also (in a non-systemic manner) regulates the crypto industry. Legal and natural persons performing transactions related to the activity of exchanges between virtual and fiat currencies or other transactions included in these services or offering custodian wallets will be liable for measures to detect and prevent money laundering and terrorist financing. In order to ensure control in this area, a register of providers of exchanges services between virtual and fiat currencies and providers of custodian wallets will be established. Providers with their registered office or branch in the Republic of Slovenia will have to register in the relevant register before the start of the provision of services. They will also have to notify the Office of the Republic of Slovenia for the Prevention of Money Laundering within 8 days of any changes and notify the providers involved in their virtual and fiat currency exchange services.
The amendment ZPPDFT-1B is not yet effective. Nevertheless, it is in the interest of providers of exchanges between virtual and fiat currencies and custodian wallets to prepare for it in due time. EU Member States are required by the directive to ensure registration. Thus, the registration obligations will almost certainly be transposed into national law. For violations, the law provides for high fines in the range between EUR 6,000 and 120,000 for a legal entity, wherein fines are also envisaged for sole proprietors and responsible individuals.
Do not forget to submit the annual report for 2019 and the and tax returns concerning corporate income tax and personal income tax with regard to income from activities, the deadline is 1 June 2020.
In order to administratively relieve the burden on entrepreneurs and companies at a time when the latter are facing the consequences of the COVID-19 epidemic, the Intervention Measures in the Fiscal Area Act (ZIUJP) was adopted, which entered into force the day following its publication, i.e. 29 March 2020, and determined, inter alia, an extension of the deadlines for the submission of tax returns and annual reports for 2019.
The deadline for submitting the tax return of personal income tax with regard to income from activities for 2019 was thus postponed by the ZIUJP, namely from 31 March 2020 to 31 May 2020. The same applies to the deadline for submitting the corporate income tax return for taxpayers that prepare tax returns for a tax period that does not differ from the calendar year.
Also extended was the deadline for submitting annual reports. Those entities that are obligated to submit annual reports to AJPES and the deadline for submitting their annual reports for the previous year would generally expire prior to 31 May 2020, have to, in accordance with the ZIUJP, submit annual reports in 2020 by no later than 31 May 2020.
As the last day of the deadline for submitting tax returns and annual reports for 2019 is Sunday, when neither FURS nor AJPES work, the deadline for submitting tax returns and annual reports for 2019 is 1 June 2020.
Discussions on the draft of the third anti-corona act began earlier this week, and the government is expected to approve the proposal today, 20 May 2020. Some of the main measures envisaged are outlined below.
The main measure is a subsidy for part-time work on the basis of a proposal from the Ministry of Labour, which, according to the text of the draft, would be given to those employers who will not be able to provide 90 percent of work for at least 10 percent of employees. Thus, the subsidized work of employees would be reduced to 20 to 36 hours per week, and the subsidies would amount to between EUR 112.13 and EUR 448.52, which could be used for a maximum of five months.
The Ministry of Labour also proposed expanding the range of beneficiaries of national aid, which would also benefit providers of social care services at home, private providers of institutional care and providers of family assistance at home. An increase in salary subsidies for the disabled is also planned.
The Ministry of the Economy focuses its proposals mainly on special aid for catering and tourism, for which, among other, it proposes extending the measure of temporary lay-off for one month, that is until the end of June. For other sectors, temporary lay-off is not expected to be extended. With regards to tourism sector the envisaged vouchers for the promotion of additional consumption in tourism have attracted a lot of public attention. These are to be paid in the amount of EUR 200 to all persons with permanent residence in Slovenia over the age of 18, including persons who will turn 18 this year, and minors will receive vouchers in the amount of EUR 50. The vouchers are expected to be transferable within the family and can be used in accommodation establishments until the end of 2020.
The Ministry of Agriculture is in favour of extending the financial compensation to holders of agricultural holdings and ancillary activities on the farm, forest owners and holders of commercial fishing permits who have lost their income due to the epidemic until the end of this year.
Several proposed measures are also linked to the objective of accelerating obtaining of building permits. Among them is the solution that the application for the issuance of this permit should not be accompanied by proof of the right to build on the land that is the subject of construction. Under the new proposal, the investor will be able to start construction already on the basis of an administratively final building permit, and not only when it is final, which means that he could start work despite possible lawsuits, but at his own risk.
We are proud to announce that legal directory The Legal 500 again awarded Sibinčič Križanec as one of leading law firms in Slovenia.
For many years we are participating in this research, so it is encouraging to see development of our law firm recognised by such esteemed legal directory.
This of course wouldn’t have been possible without our clients and their generous contribution in this research.
Based on your feedback we are doing good job providing quality legal service and we will try our best to do so as long as possible.
More about ranking you can see on The Legal 500 official website.
With the occurrence of the COVID-19 Coronavirus, the need to work from home and ordering to work from home occurred in case of exceptional circumstances where human life and health or the property of the employer are endangered.
The Employment Relationships Act (ERA-1) stipulates that work from home is work done by an employee at his home or on premises of his choice outside of the employer’s premises. In general, the employer and the employee agree for the work from home with an employment agreement for the whole duration of working time or only for a part of working time. The obligations of the employer in arranging this form of work are the adoption of the appropriate Regulation of work from home, which specifies the conditions for carrying out work from home (number of days, work reporting method, working hours,…), notification to the Labour Inspectorate of the intended organization of work at home and ensuring safe working conditions at home in accordance with the Health and Safety at Work Act.
In addition, the ERA-1 also makes it possible to unilaterally assign work to another location due to exceptional circumstances. In case of natural or other disasters, where such a disaster is expected or in other exceptional circumstances where human life and health or the property of the employer is endangered, the place of work specified in the contract of employment may be temporarily changed without the employee’s consent. The obligation to work from home can therefore only be temporary for as long as exceptional circumstances persist and a change of place of work is urgent and necessary. In this case, the employer is also obliged to regulate the issues of suitability of workplace, working time, provision of work resources, professional secrecy, etc. Also, the employer is obliged inform the Labour Inspectorate of the work from home as soon as possible, and ensure safe and healthy working conditions, according to the with the Health and Safety at Work Act.
The employer should fulfil the obligations when performing work from home in a timely manner, since the law prescribes various fines in case of violations.
Yesterdays the Slovenian Parliament passed a law that will introduce changes to the Slovenian Law of Property Code. This is only the second time that the law is being changed since its adoption 18 years ago. Quite substantial changes are the result of academic discussions that have been going on for some time. Most important changes to be implemented are as follows:
The changes are a welcome refreshment to one of the older Slovenian laws of systemic importance, which will thus – while keeping its basic principles – remain relevant in the modern times.
There probably isn’t anyone who wouldn’t know about coronavirus today. The precautionary measure is clear: people who have stayed in the countries or areas labelled as epicentres of the disease over the past few weeks should stay home for the next 14 days, regardless of their well-being. The University of Ljubljana gave such instructions to its employees, for example, and reassured the students that in the absence of compulsory participation content, they would be able to compensate for this and would not suffer negative consequences due to this self-limitation. How about the other employees?
An employee who is quarantined by a doctor’s order is entitled to a sickness benefit of 90 percent of the basis, which is borne by the Health Insurance Institute of Slovenia, on the basis of the Health Care and Health Insurance Act. In the event of an emergency, part of the financing will also be taken over by the state.
According to the Contagious Diseases Act, the Minister of Health must declare an emergency in the event of an epidemic, which has not occurred to us (yet). Ministry of Labour, Family and Social Affairs is expected to provide more specific guidance shortly on employers’ treatment of employees opting for voluntary quarantine.
To date, there is no confirmed case of coronavirus infection in Slovenia, but it has occurred along the border with Slovenia in Gorizia, Trieste and Udine.
We are proud to announce that Chambers Global guide 2020 awarded Sibinčič Križanec as Recognised Practitioner in Corporate/Commercial law practice area.
Furthermore, our Managing Partner Jan Sibinčič was ranked as Up and Coming Lawyer.
We are grateful to everybody who participated in this research and gave us the opportunity to be ranked among such great law firms. As we strive for excellence, we will do our best to keep providing you with quality legal service.
More on Chambers and Partners official website.
The National Assembly is discussing an amendment of the Industrial Property Act. Its purpose is to harmonize the law with the provisions of the Directive (EU) 2015/2436 of the European Parliament and of the Council of 16 December 2015 to approximate the laws of the Member States relating to trade marks. Due to the coexistence of national marks in EU member states and the EU trade mark itself balancing of these rules is crucial.
The following novelties are of particular importance to trade mark proprietors and persons seeking to register trademarks:
Provided the amendment of the Industrial Property Act will be adopted, it will allow the registration of modern trademarks. At the same time, a person seeking to register his mark will have to be more diligent not to violate the new absolute (or relative) grounds for refusal. For business entities, the disposal of trade marks will be of particular importance. Proprietors of trademarks and those who wish to become so will need to invest greater care before registering a trade mark, while at the same time, will be able to benefit from the improved legal protection and disposal of registered trademarks.
On 31 January 2020, the United Kingdom left the European Union after 47 years, although it will still seem as if this is not true for 11 months. And yet it is. Only an 11-month transition period has begun, in which citizens and companies will not feel the effects of exit, probably hoping that they will, among other things, maintain a “duty free” policy in the future. Will that really be the case? Brussels and London must reach an agreement on future relations by 31 December, which, given the length of past negotiations between the EU and other countries on trade agreements, seems like a mission impossible. After examining all the consequences of exit, it therefore seems as though the United Kingdom has made a mistake by making the decision to exit.
And yet, the European Union will not be in a better position either – one of the largest net contributors is leaving the European Union, resulting in an annual budget of 12 to 14 billion EUR, which will have to be covered by the remaining members. However, they are unlikely to feel this difference in the coming years, as the UK has to settle a separation bill, estimated at around 35 EUR billion by British media.
So, who’s next for the exit / entry?
The taxpayers are entitled to a reduction of yearly tax base for special tax relief for dependent family members. The dependent family members are children up to the age of 18, all others (e.g. children over 18 years of age, spouses) must comply with special conditions laid down by law. The taxpayers may claim a reduction of tax base for dependent family members in the calculation of personal income tax prepayment (on monthly basis) or indicative personal income tax calculation (on annual basis).
If the taxpayer decides to claim dependent family members during the year in the calculation of personal income tax prepayment, a completed form “Notice on claiming relief for dependent family members in the calculation of personal income tax prepayment” must be submitted to the employer.
The taxpayer who did not claim the relief during the year must submit an application for special relief for dependent family members in the indicative personal income tax calculation by 5 February. The application can be submitted via eDavki mobile application, electronically via eDavki system or personally or by post to the competent Financial Administration.
With February 2020 the use of electronic sick leave notes will be mandatory, which represents a significant innovation for employers and their employees. As of 1 February 2020 the employees will thus no longer be required to submit sick leave notes in paper form, as employers will be obligated to accept electronic sick leave notes.
On 1 January 2020 the Health Insurance Institute of Slovenia (hereinafter »HIIS«), in cooperation with health care providers, introduced the electronic issuing of sick leave notes. Until 31 January 2020 health care providers will be able to issue sick leave notes to insured persons (employees) also in paper form, while as of 1 February 2020, paper sick leave notes will only be available in certain exceptional cases. Namely, employers will be required to accept electronic sick leave notes for their employees through the SPOT system, administered by the Ministry of Public Administration, for all temporary absence from work as of 1 February 2020, and will no longer be able to require employees to provide them with sick leave notes in paper form. The exception applies only to those insured persons, employed by employers that are not registered in the Slovenian Business Register; their physicians will continue to issue them sick leave notes in paper form. The issued electronic sick leave notes can also be accessed by the insured persons (employees), namely on the HIIS’s web portal, with a qualified digital certificate.
Due to the mandatory use of electronic sick leave notes, business entities – employers need to duly arrange new authorizations and grant authority to the person, who will be able to access their employees’ sick leave notes through the SPOT system.
With the new year, a pension law amendment has come into force, which brings many positive changes to the pension system. While the previous news touched on the main purpose of the amendment, which represents an increase or reward for work activity among older workers, we also present some interesting points below.
As stated in the previous regulation, a person can retire at the age of 65, if he or she has at least 15 years of insurance period, or at the age of 60, if he or she has at least 40 years of pension qualifying period. The age limit may, however, be lowered for the insured person due to the care of every child born or adopted (in the first year of the child’s age), to compulsory military service and to enter compulsory pension and disability insurance before the age of 18 years.
The conditions for early retirement, however, do not change with the arrival of year 2020 and thus the pension amendment, which means that a person must be 60 years of age and have 40 years of pension qualifying period. The well-received change represents a higher percentage rate, which will amount to 63.5 % of the pension base for 40 years of the pension qualifying period for women, however, for men it will gradually increase over the six-year period until it is equal to the percentage for women.
Another positive novelty is the possibility of raising the pension for each child by 1.36 %, but not for more than three children, with the mandatory condition that the person exercising the said option does not retire early.
Last but not least, retirement is currently the most favourable for Austrians, Italians, Luxembourgers, Portuguese and Turks – pensions are, on average, only a tenth lower than their salaries. However, the British, Mexican and Lithuanian are the least happy about retirement, with their pensions averaging a third of their income.
With the new year, a pension law amendment has come into force, which brings many positive changes to the pension system. One of the main goals of the amendment is to increase the employment activity of older workers through favourable measures or reward it accordingly. The measures to pursue the stated goal are presented below.
The most prominent and most frequently mentioned measure in the media to reward work activity is that, if the conditions for retirement are fulfilled, the additional three years of employment are valued at three percent annually (or 1.5 percent each 6 months).
The amendment also establishes modified arrangements for combining job status with retirement status by changing the arrangements for receiving a partial pension while extending full-time employment. Persons covered by compulsory insurance for full-time work who qualify for retirement will be able to apply for a 40 percent retirement pension. This part will be paid to them for three years and then the pay-out will drop to 20 percent.
With regard to the above measure, it should be emphasized that persons who qualify for early retirement will no longer be entitled to payment of part of their pension. The exception to this is that only those insured persons who receive part of their pension in accordance with the legislation in force, which provides for special transitional arrangements for them.
To current recipients of a 20 percent retirement pension who choose to continue working, the pension institution will ex officio recalculate a portion of the retirement pension to 40 percent. Additional task of the institution is to verify that the recipients of a partial early retirement pension qualify for a pension of 40 percent of the retirement pension and issue a decision accordingly.
Compared to the previous arrangements, a new feature represents the arrangement, which, in addition to full inclusion in insurance, encourages inclusion in compulsory part-time working or insurance time (at least four hours a day or 20 hours a week). In addition to a partial pension or a proportionate part of the pension, such an individual will also be entitled to the payment of a proportionate part of the 40 percent retirement pension.
The Directive (EU) 2019/790 on copyright in the digital single market has entered into force in mid-2019. It has amended the directives on the legal protection of databases and on copyright in the information society. One of its changes is a controversial provision that imposes obligations to online content-sharing service providers with respect to copyright-protected content uploaded by its users.
According to the directive, information society service providers storing and giving access to a large amount of copyright-protected works, uploaded by its users, for profit-making purposes, will have to obtain an authorisation from the rightholders. Therefore, web providers will no longer be able to rely on the notice and take down process, which has so far relieved them of their responsibility under the “hosting” exception. From now on, they will have to endeavour to obtain an authorization or to make specific works unavailable, and, in any case, expeditiously disable access to, or remove from their websites, the protected works, as well as prevent future violations. They will also need to provide an effective and expeditious online complaint and redress mechanism.
It is undoubtedly in the interest of web service providers hosting large volumes of user uploaded content to implement technical solutions for infringement checks and to regulate licensing by changing the general conditions. The directive is to be implemented by the Republic of Slovenia in national legislation only in 2021. Nevertheless, the obligations do not fully apply to all providers and the sharing of content for specific purposes is sometimes permissible. Therefore, the least that web hosting providers should do now, in order to adapt their businesses in a timely manner, is to check whether or not they are bound by the new copyright rules in the digital single market.
For tax purposes, a part of salary for business performance, Christmas bonus or thirteenth salary are deemed to be an income arising from the employment relationship. Such bonuses are subject to calculation and payment of social security contributions, and in some cases, personal income tax, regardless of whether they are paid as a payment for business performance or any other type of payment. The payment for business performance paid up to 100% of average gross salary in the Republic of Slovenia, is not subject to payment of personal income tax, but only contributions. If an employer pays higher amount, such payment will be charged to tax, but only the part which exceeds the amount of average monthly gross salary.
More favourable tax treatment applies only to payment for business performance which is paid once in a calendar year. If an employer pays a payment business performance without personal income tax in January, it can no longer use such tax benefit until January next year.
All employees of certain employer must have a right to receive payment for business performance, whereby the right to payment for business performance and the criteria for its payment should be determined in a general act of the employer, or in a collective agreement or other act based on such collective agreement.
Furthermore, all employees of an employer shall be deemed to be entitled to payment for business performance if the conditions for obtaining the right are unified for all employees by a general act of the employer.
The Constitutional Court suspended the enforcement of the provisions of the Public Procurement Act, which set forth the contracting authority’s obligation to exclude economic operators with two final offenses in the field of labor law from a respective public procurement procedure.
Until the final decision of the Constitutional Court, the economic operator may also in such situation provide the contracting authority with evidence that it has taken sufficient measures that prove its reliability and thus, despite the existence of reasons for exclusion, participate in a procurement procedure. Sufficient measures include payment or commitment to pay compensation for all damages caused by infringements, active cooperation with investigative bodies to fully clarify facts and circumstances and take actual technical, organizational and personnel measures appropriate to prevent further infringements.
In assessing the measures taken by the economic operator, the contracting authority will take into account the seriousness and the specific circumstances of the infringement. If it considers that the evidence provided by the economic operator is sufficient, it will not exclude the economic operator from the procurement process, otherwise it will send the economic operator a justification for its decision.
In recent times, the word “recession” has become increasingly used in the media and in everyday life, along with the fear of a recession in the economy. Consequently, this fear was an important factor in deciding whether or not to invest money.
The latest data, however, shows that fear is exaggerated, if not superfluous. Indeed, US stock indices are reaching records, and the key news was that the USA and China were just ahead of the conclusion of the first phase of the trade agreement, as they both agreed that the duties introduced in the last year and a half should be abolished. Bloomberg estimates that the probability of a recession in the last 12 months is only 26%.
Therefore, fear of recession should not limit you and prevent you from successful business stories. However, before any investment, we advise you to visit an expert to minimize the risk (even in the event of a recession) and maximize the chance of success.
Slovenia offers a good environment for investments and development of business, and since there are many investment opportunities in Slovenia, we have collected some of the most appealing ones, based on publicly available information.
Presentation for this month’s investment opportunities you can find HERE.
On October 23rd, 2019, the National Assembly of the Republic of Slovenia adopted amendments to four tax laws: the Personal Income Tax Act (ZDoh-2), the Corporate Income Tax Act (ZDDPO-2), the Law on tax on profit from disposal of derivatives (ZDDOIFI), and, consequently, the Tax Procedure Act (ZDavP-2). Changes are expected to bring less money into the national budget, but this deficit should be offset by more efficient tax collection and more stringent supervision.
The tax reform relieves the scale for assessing personal income tax, introduces a new way of valuing real estate, changes the taxation of entrepreneurs and legal entities, while introducing significant changes in the field of taxation of capital, and especially capital gains, since from the validity of the reform, their own shares and subsequent payments will have a prominently more stringent treatment.
Probably the most interesting part for individuals is the impact of the tax reform on their salaries, but these changes are minimal. For example, an employee with an average salary will receive about EUR 143 more per year.
As the end of the year is approaching, prepare in time for the new tax regime, which will take effect from January 1st, 2020.
A whistle-blower is a person, who reports or publicly exposes information about wrongdoing associated with its work in an organisation (a company or public institution). The wrongdoing can consist of illegal or otherwise inappropriate (unethical, unfair, discriminatory, etc.) activities, which can be harmful to the public interests (e.g. environment, public health, consumer safety, public finance) – and indirectly also to private interests. Whistle-blowers have in the past revealed some of the largest wrongdoings in various organisations.
Countries around the globe are starting to recognize the effectiveness of whistle-blowers and are therefore introducing legal protections for their activities. The European Union followed suit by adopting, on 7. 10. 2019, the Directive of the European Parliament and of the Council on the protection of persons who report breaches of Union law.
The Directive will need to be implemented into national legal systems by the EU member states within two years. Main features of the Directive include:
Whistle-blower protection system can significantly contribute to the development of a healthy corporate culture in your organisation – and it is of vital importance for you to set up and operate (efficient and legally compliant) system.
We are proud to announce that renowned legal guide IFLR 1000 awarded Sibinčič Križanec as Recommended Law Firm for corporate and financial law in Slovenia again this year.
Furthermore, our managing partner Jan Sibinčič has been recognised as Highly Regarded Lawyer in Capital markets and M&A legal practice area.
Sincere thanks to our clients and their generous contribution in this research. Based on your feedback we are doing good job providing quality legal service and we will try our best to do so as long as possible.
More about ranking you can see on the IFLR 1000 official website.
The relationship between the building manager and apartment owners is a mandate relationship governed by the agreement on provision of management services and statutory law, notably the Housing Act and the Law of Property Code. With the agreement, the building manager undertakes to perform specific transactions for the apartment owners and is in return entitled to payment for its effort. Thus, the building manager, inter alia, manages the reserve fund, wherein the monthly payment the manager is entitled to is determined in the agreement on provision of management services.
Management of apartment buildings through building managers was governed already by the Housing Act from 1991, however, it was not until 1 January 2003 with the enforcement of the Law of Property Code when the obligation to provide payments to the reserve fund was introduced. In praxis, building managers started to charge in the monthly account on top of management services and operating and maintenance costs an additional fee for reserve fund management, however, without a legal basis. Management of the reserve fund is the building manager’s statutory obligation that is, therefore, obliged to perform such work, however, this does not mean that it can charge it without an agreement on the amount. Practically speaking this means that apartment owners bound by older management services agreements concluded prior to 2003 are usually not obliged to pay for the reserve fund management services because the reserve fund at that time did not yet exist.
Apartment owners may request the building managers to provide them with a copy of the management services agreement. This way, they can check whether or not the contract contains an agreement on the reserve fund management amount. If the apartment owner believes that the building manager unjustifiably charges the reserve fund management fee, he or she may reject the invoice in this part and following the building manager’s enforcement application and the objection to the enforcement decision by the apartment owner, the matter will be decided upon by the court in civil proceedings. In addition, apartment owners with a majority of more than 50 % may terminate the agreement with the building manager and conclude an agreement with a new one. An important corrective measure to the aforementioned remedies could present the Collective Actions Act.
When shopping online (including distance purchases placed by phone or mail order) a consumer has a period of 14 days to withdraw from the sale contract without giving any reason. However, some purchases are not covered by the cooling-off period, such as the supply of goods which are liable to deteriorate or expire rapidly, the supply of sealed audio or video recordings or computer software which are unsealed after delivery, the supply of goods made to the consumer’s specifications, hotel bookings, car rental, concert tickets and other leisure services (if the contract applies to a specific date or period of performance) etc.
For the purpose of withdrawing from the contract, the consumer may either use special model withdrawal form (if available) or make any other unequivocal statement setting out his decision to withdraw from the contract. Unless the trader has offered to collect the goods himself, the consumer should send back the goods or hand them over to the trader without undue delay, in any event no later than 14 days from the day on which he has communicated his decision to withdraw from the contract to the trader. The consumer shall only bear the direct cost of returning the goods unless the trader has agreed to bear them or the trader failed to inform the consumer that the consumer has to bear them. The trader is under obligation to reimburse all payments received from the consumer no later than 14 days from the day on which he was informed of the consumer’s decision, whereby the reimbursement must be carried out using the same means of payment as the consumer used for the initial transaction, unless the consumer has expressly agreed otherwise and provided that the consumer does not incur any fees as a result of such reimbursement.
At the beginning of the month the Slovene Enterprise Fund (hereinafter: the “SEF”) published two new public calls, meant for innovative start-ups that have difficulty accessing financing through commercial banks or other traditional forms of financing: Public call SK75 2019 – Convertible innovative businesses start-up loan in the amount of EUR 75,000 (SK75 2019 – Konvertibilno posojilo za zagon inovativnih podjetij v višini 75.000 EUR, hereinafter referred to as “SK75 2019 public call”), and public call SI-SK 2019 – Co-Investing with Private Investors (SI-SK 2019 – So-investiranje z zasebnimi investitorji, hereinafter referred to as “SI-SK 2019 public call”).
Pursuant to the SK75 2019 public call young innovative companies can obtain quasi-equity financing in the amount of EUR 75,000, with available funds amounting to EUR 750,000, while in accordance with the SI-SK 2019 public call the SEF, together with an independent private investor, invests or provides equity financing in the amount between EUR 100,000 and EUR 600,000 (the amount of funds that can be obtained by a respective company depends on the amount of the private investment), with available funds amounting to EUR 1,250,000.
The deadline for submission of applications to the SEF pursuant to the SK75 2019 public call is 27 September 2019, while there are several deadlines for submission of applications pursuant to the SI-SK 2019 public call, namely 31 August 2019, 30 September 2019, 31 December 2019, 31 March 2020, 30 June 2020, 30 September 2020 in 31 December 2020.
If you are a young innovative start-up, and the abovementioned public calls interest you, check, whether you fulfill the conditions for financing, and submit your application in time.
On July 29, 2019, the Court of Justice of the European Union (“CJEU”) adopted a judgment confirming the broad definition of the concept of “controller” under EU data protection law.
In the respective case, the CJEU addressed the actions of Fashion ID GmbH & Co. KG (“Fashion ID”), a German online clothing retailer, which embedded the ‘Like’ social plugin from the social network Facebook (‘the Facebook “Like” button’) on its website. The consequence of embedding such button appeared to be that when a visitor visited the website of Fashion ID, that visitor’s personal data were transmitted to Facebook Ireland Ltd (“Facebook Ireland”), without that visitor being aware of it and regardless of whether or not he or she was a member of the social network Facebook or had clicked on the ‘Like’ button.
In its judgement the CJEU found that an operator of a website, such as Fashion ID, that embeds on that website a social plugin causing the browser of a visitor of that website to request content from the provider of that plugin and, to that end, to transmit to that provider personal data of the visitor, can be considered to be a “controller”, namely jointly with the provider of the social plugin, in the respective case Facebook Ireland, and despite the fact that the operator of a website, such as Fashion ID, does not itself have access to the personal data collected and transmitted to the provider of the social plugin, such as Facebook Ireland. Namely, according to CJEU, by embedding that social plugin on its website, Fashion ID exerted a decisive influence over the collection and transmission of the personal data of visitors to that website to Facebook Ireland, which would not have occurred without Fashion ID embedding that plugin. It should, however, be noted that in CJEU’s opinion, the operator of a website, such as Fashion ID, cannot be considered to be a controller in respect of the operations involving data processing carried out by Facebook Ireland after those data have been transmitted to the latter.
The CJEU further made clear that the operator of a website such as Fashion ID, as a (joint) controller in respect of certain operations involving the processing of the data of visitors of its website, such as the collection of those data and their transmission to Facebook Ireland, also has certain obligations. The operator of the website thus has to obtain a (prior) consent of the data subjects and must provide them, at the time of collection, with certain information, e.g, its identity and the purposes of the processing. These obligations are, however, limited to the operation or set of operations involving the processing of personal data in respect of which it actually determines the purposes and means, that is to say, the collection and disclosure by the transmission of the data at issue.
Considering the abovementioned judgement of the CJEU, the operators of websites that embed a social plugin such as the ‘Like’ social plugin from the social network Facebook, are also bound by the EU data protection law and obligations thereby imposed on them.
Slovenia offers a good environment for investments and development of business, and since there are many investment opportunities in Slovenia, we have collected some of the most appealing ones, based on publicly available information.
Some of August’s most appealing investment opportunities you can find HERE.
The new EU Prospectus Regulation – which has been adopted two years ago – is in full effect since 21 July 2019. The new Regulation is repealing the previous Prospectus Directive and replaces the prospectus regimes contained in the national legislation (the Slovenian Market in Financial Instruments Act), thereby constituting an important step towards the completion of a common European capital market.
Even though the Regulation is based on the same principles as the Directive, the issuers, the investors and other market participants should be aware of the changes, in particular in the following areas:
The Ministry of Labour, Family, Social Affairs and Equal Opportunities announced on 19 July in the Official Gazette of the RS no. 46/2019 the Decision on revalorized transfers designated in nominal sums and percentage of valorization of other transfers to the individuals and households in Republic Slovenia from the first of July 2019, which coordinates child allowances and other social transfers. With this decision, the published transfers increased by 2.4 percent, and for this purpose, about six million euros were provided in the government budget.
In the coming month, all beneficiaries of child allowances and other social transfers will receive slightly higher amounts on their bank accounts
Like every other year, this year, as of July 15, there are judicial holidays that last until 15 August.
This means that during the time of a judicial holiday, the court will only conduct hearings in urgent matters. In the sense of the Courts Act, urgent matters are considered to be the issuance of provisional decisions, investigative acts, non-contentious and enforcement matters related to the education and protection of children, maintenance liabilities, and some others.
However, during the judicial holidays, procedural deadlines are not running, and court documents are not served. Procedural deadlines are the deadlines set for the execution of procedural acts. This means that during judicial holiday, for example, the deadline for the statement of defense (which is 30 days) does not run during this time and if the lawsuit was served on 8 July 2019, , the deadline for the statement of defence will expire on 9 September 2019, instead on 7 August 2019.
But attention – judicial holidays do not affect the running of material deadlines. Material deadlines are deadlines that determine when or by which time it is possible to assert some right and are defined in the material regulation. For example, the material deadline is in disputes arising from the disturbance of property, where the material provision explicitly stipulates that judicial protection against the disturbance of property can be requested within 30 days of the day when the owners learned about the disturbance and the perpetrator. This means that if you have been disturbed by someone in your possession and you learned about it and the perpetrator on 8 July 2019, you must file a lawsuit no later than 7 August 2019.
Watch out for your rights and find needed help in due time, so that you can also have a nice holiday.
July 8th was the last day for public consultation on the proposal of the amendment to the Law of Property Code. The proposal brings the following innovations:
If the proposal will be adopted, it will be in accordance with the needs of modern business traffic.
On 1 June 2019, the Government Decree on the implementation of the Regulation (EU) laying down the measures concerning open internet access and retail charges for regulated intra-EU communications came into force. It determines notably dispute resolution mechanisms concerning access to an open Internet and penal provisions in the event of violations.
The regulation is important for users and for service providers. In the event of a discrepancy between the actual capacity of internet access and the capacity provided in the contract, users are able to settle disputes with the operator and the Agency for Communication Networks and Services of the Republic of Slovenia (AKOS). For internet access providers, the regulation is important because it draws attention to their obligations regarding the equal and non-discriminatory provision of internet access services and transparency measures. In any contract involving internet access services, they are obliged to provide mandatory information and publish them, as well as to establish simple and effective procedures for dealing with complaints of end users. Regarding retail prices for regulated communications within the EU, for example, it points out that providers shall not charge prices exceeding EUR 0.19 per minute for calls and EUR 0.06 per SMS.
For infringements, the service provider may be fined up to a maximum of EUR 125,000. It stems from the foregoing that it is of utmost importance for providers of internet access services and intra-EU communications to revise contracts and general terms and to check the pricing options.
The Ministry of Finance has drafted amendments to the Personal Income Tax Act, the Corporate Income Tax Act and the Profit Tax Act on the disposal of derivative financial instruments. Key features of the newly proposed legislation are, as follows:
Small and medium-sized enterprises (SMEs) represent the backbone of the European economy, employing two-thirds of all workers and generating almost 60% of all added value. In addition, start-up SMEs play a decisive role in economic growth. For this reason, the European Union has been working hard for improving the business environment in which SMEs operate – from the 2008 Small Business Act – for a long time.
An important aspect of the functioning of SMEs is their access to funding sources, both equity and debt. While large companies often have access to diversified sources, SMEs – especially start-up SMEs – are often neglected. Therefore, the latest legislative proposal of the European Commission focuses specifically on this aspect of their business, by facilitating their access to the so-called multilateral trading facility (MTF).
MTFs are platforms that are similar to traditionally regulated markets (stock exchanges) as they provide certain standards regarding transparency of operations and enable quick execution of transactions – thereby attracting investors. At the same time, MFTs, with financial instruments traded on them, impose less administrative obligations.
The European Commission seeks to facilitate the access of start-up SMEs to MTFs focusing on SMEs (eg. by simplifying the obligation to publish a prospectus) and, in general, to reduce their administrative burden (eg regarding mandatory disclosures under the Market Abuse Regulation).
In this way, transparent multilateral markets – attracting investors and traditionally reserved for large companies – are becoming easier to access (startup) SMEs. While the only Slovenian MTF (SI ENTER, managed by the Ljubljana Stock Exchange) is not yet specialized for start-up companies, some foreign MTFs are – the closest is the MTF Zagreb Stock Exchange.
Have you considered setting up an MTF as a way of financing your business?
The Slovenian Enterprise Fund (hereinafter: the SEF) introduces a new program of incentives in 2019, i.e. vouchers. It will provide companies with significantly simplified access to co-financing of individual services, through which they will strengthen their competitiveness and competences. In five years, a total of 22.5 million euros will be available.
SEF will publish public calls for vouchers with different content gradually. After vouchers for co-financing the costs of obtaining quality certificates and for co-financing costs for intellectual property protection procedures, published in January, vouchers to assist with internationalization, published in February, and vouchers to assist with digitization, published in April, on 17 May 2019 SEF has published vouchers for reorganization of the status of companies.
The costs for all content areas of vouchers will be eligible as from 1 January 2019, so companies should be able to store supporting documents (contractor selection, invoices, payment receipts, etc.). From an individual approved voucher companies will be able to obtain co-financing of 60% of costs (including some legal costs). The maximum value they can obtain for each voucher is up to 10,000 euros. The total amount of vouchers that a company can use is 30,000 euros per year.
Therefore, if you are interested in the new co-financing program, it is essential that you submit your application in time and before that check whether you fulfill the conditions in accordance with the program.
The unconditional, “first demand” bank guarantees are considered to be among the most secure forms of protection against various risks in business. By issuing the bank guarantee, the bank as a guarantor undertakes to make a payment to the recipient of guarantee (the beneficiary) in the event of non-performance of contractual obligations by a third party. When a demand is made to the guarantor and is in compliance with the terms of the guarantee, the guarantor (the bank) is under obligation to pay to the beneficiary regardless of the underlying relationship between the beneficiary and the grantor. However, due to their abstract nature and independence from the basic legal transaction, various abuses of bank guarantees may occur.
The courts will rarely interfere in the realization of the bank guarantee, and there are only a few circumstances where a grantor of bank guarantee can prevent the beneficiary from obtaining payment. According to Slovenian case law, the courts may intervene in case of abuse of bank guarantee where the beneficiary of the bank guarantee has acted fraudulently or in contrary with the principle of conscientiousness and fairness, namely by issuing an interim order preventing the guarantor (the bank) from honoring the guarantee. For example, the abuse of bank guarantee can be inferred from calling for payment under unconditional bank guarantee despite previous unambiguous statements by the beneficiary confirming complete performance of works or after early termination of underlying agreement and, furthermore, in case of obvious and clear breaches of underlying contract by the beneficiary.
In event of abuse of bank guarantee by the beneficiary, the grantor will need to act quickly and file a motion for an interim order (injunction) in order to prevent a bank from honoring the bank guarantee.
A year has passed since Slovenia has experienced changes in the field of regulation of spatial legislation. The area of spatial planning and building construction is newly regulated from 1 June 2018 by the Spatial Planning Act (Zurep-2), the Construction Act (GZ) and the Architectural and Engineering Act. (Zaid). From the above-mentioned legislative triplet, Zurep-2 brought the biggest reform of the spatial planning, which has repealed three current regulations: The Spatial Planning Act (Zurep-1), the Act of the Spatial Planning (ZPNacrt) and the Spatial Arrangement in the Spatial Planning Act (ZUPUDPP).
One of the most important innovations towards the improvement that Zurep-2 brought to the Slovenian legal space is the possibility of initiating an administrative dispute against spatial implementing acts at the Administrative Court. The subject change is a big step forward from the previous regulation, where the legality or constitutionality of spatial implementing acts was assessed by the Constitutional Court, which in the main rejected such a decision by an argument of a lack of legal interest.
Since the enforcement of the abovementioned amendment in the administrative dispute, the court also decides on the lawfulness of spatial implementing acts in the part of determining the purpose of the use of space or its direction, determining the spatial implementation conditions that relate to the purpose of interventions in the space, their location, size and design, or the size of the building plot or the most appropriate variants in the regulation on the most suitable variant, so it is advisable to have good professional counsel at hand in case you are dealing with abovementioned matters.
On Saturday, 25 May 2019, exactly one year has passed since the entry into force of the General Data Protection Act (GDPR), which was marked as the biggest change in the field of personal data protection for decades and has become a global reference point.
Some companies processing personal data in the course of their business activities have harmonized their business with the provisions of the GDPR, wherein it is in the interest of others to do. Media reported in particular of fines imposed by the supervisory authorities abroad. One of the first high-profile cases was the EUR 400,000 fine imposed on a hospital in Portugal. On 21 January 2019, the French Commission Nationale de l’Informatique et des Libertés (CNIL) imposed on Google a fine of EUR 50 million. In the past year, the Slovenian Information Commissioner was mainly concerned with issuing opinions.
The Ministry of Justice announced the adoption of the Personal Data Protection Act (ZVOP-2) complying with GDPR in the summer of 2019. Following the adoption of the ZVOP-2, a more active role in imposing fines for violators is expected by the Information Commissioner. Efforts to harmonize their business with the provisions of GDPR should, therefore, be the priority of each controller and processor who has not yet done so.
On 4 May 2019, the amendments to the Personal Income Tax Act (ZDoh-2U) and the Pension and Disability Insurance Act (ZPIZ-2F) entered into force relieving taxation for the annual holiday leave pay. The amount of 100% of the average monthly salary of employees in Slovenia is not included in the tax base of income from employment and the basis for payment of social security contributions. This amends the previous regime according to which it was necessary to calculate personal income tax from the entire compensation and social security contributions if it was higher than 70% of the average salary.
The amendments are both from the perspective of the employer and from the point of view of the worker. The employer is obliged to deduct the withholding tax and contributions only in the part where the annual leave pay exceeds 100% of the average monthly salary. According to the Statistical Office of the Republic of Slovenia, the average monthly gross earnings amount to EUR 1,721.82. However, even if the employer paid the compensation only at the level of the minimum wage in accordance with the Employment Relationships Act, the worker will still receive at least EUR 886.63.
The amendment to the legislation is effective from 1 January 2019. Therefore, for payments carried out before 4 May 2019, the law provides for a special procedure for the repayment of overpaid advance payment of personal income tax, overpaid and deducted contributions (reimbursement to the employee) and excessively charged contributions (reimbursement to the employer). The repayment of these amounts will be carried out by a special decision by the Financial Administration of the Republic of Slovenia.
A tax or legal expert can advise you on the calculation and obligations regarding the payment of personal income tax from the annual leave pay.
Today, the Financial Administration of the Republic of Slovenia (FURS) announced it shall, on 9. 5. 2019, offset claims against taxable persons who have a debt towards FURS and who are also entitled to a refund of personal income tax on the basis of the indicative calculation of personal income tax for 2018.
The offset of claims shall be made before the refund of personal income tax and for all outstanding tax liabilities due on 7. 5. 2019. Taxable persons shall receive a notification of the offsetting if the amount offset exceeded EUR 10.
Taking the above into account, we advise all taxable persons to pay their outstanding tax liabilities prior 7. 5. 2019 and thus avoid the possibility of double payment of tax liabilities.
In Slovenian case law, one of the most common disputes in the field of unjust enrichment occurs regarding the return of investments in foreign property. The reason for such a dispute is the ending of various forms of partnership in which one of the members invested in the property of another.
This is most often the case with young couples who solve the housing problem by moving into the property of the parents of one of the partners and investing in that property the work and the funds in such a way as to improve the property, upgrade it, restore it, etc.
If later such partnership ends and the partner who invested in the property, moves out, he/she has a restitution claim to reimburse his/her investments, but in accordance with the position of the case-law, only to the extent that, due to his/her investments, the value of the property has increased.
The reimbursement of investments that have increased the value of the property may be invoked by the applicant in a civil litigation before court, whereby it is crucial that the claim is directed against the owner of the property in which he/she invested (most often these are the parents of the partner).
If you are not the owner of the property in which you have invested, as mentioned above, we advise you to consult with legal experts to assist you in reimbursement of your investments.
Ending February, the Ministry of Finance released a package of nine measures aimed at optimizing taxes and the taxation of income from employment, whilst replacing the budget deficit with an increase in taxation of capital and a more effective fight against grey economy, tax evasion and social fraud.
Measures aimed to reduce the tax burden of income from employment are the increase in marginal tax brackets and lowering of marginal tax rates, an increase of tax reliefs, lowering the tax burden on holiday pay and lastly lowering the tax burden on the reward for performance. On the other hand, capital gains tax shall be increased from 25% up to 30% and the corporate income tax rate shall also rise by 1% annually, up to a maximum of 22% in 2022. Lastly, a limited carry-foward of tax loss is to be enforced.
As for the latest news regarding above mentioned measures, today the Parliament is about to adopt the amendment to the Personal Income Tax Act. This means that annual holiday allowance up to 100% of the average monthly salary (currently grossing EUR 1,729.15) will not be included in the tax base for assessing personal income tax.
Still, the holiday allowance must be paid until June 30th.
The Slovenian Enterprise Fund (hereinafter: the SEF) introduces a new program of incentives in 2019, i.e. vouchers. It will provide companies with significantly simplified access to co-financing of individual services, through which they will strengthen their competitiveness and competences. In five years, a total of 22.5 million euros will be available.
SEF will publish public calls for vouchers with different content gradually. After vouchers for co-financing the costs of obtaining quality certificates and for co-financing costs for intellectual property protection procedures, published in January, and after vouchers to assist with internationalization, published in February, on 5 April 2019 SEF has published vouchers to assist with digitization as follows:
The costs for all content areas of vouchers will be eligible as from 1 January 2019, so companies should be able to store supporting documents (contractor selection, invoices, payment receipts, etc.). From an individual approved voucher companies will be able to obtain co-financing of 60% of costs (including some legal costs). The maximum value they can obtain for each voucher is up to 10,000 euros. The total amount of vouchers that a company can use is 30,000 euros per year.
Therefore, if you are interested in the new co-financing program, it is essential that you submit your application in time and before that check whether you fulfil the conditions in accordance with the program.
We are proud to announce that legal directory The Legal 500 awarded Sibinčič Križanec as one of leading law firms in Slovenia.
For many years we are participating in this research, so it is encouraging to see development of our law firm recognised by such esteemed legal directory.
This of course wouldn’t have been possible without our clients and their generous contribution in this research.
Based on your feedback we are doing good job providing quality legal service and we will try our best to do so as long as possible.
More about ranking you can see on The Legal 500 official website.
On February 16, 2019 the Regulation (EU) 2016/1191 (hereinafter: Regulation), which simplifies the requirements for cross-border use and acceptance of certain public documents in the EU, entered into effect.
Under the Regulation an apostille (authenticity stamp) is no longer required when presenting public documents or their certified copies issued by the authorities of one European Union (EU) member state to the authorities of another EU member state. The regulation applies to public document regarding personal status (e.g. birth, death, marriage, registered partnership, adoption, etc.), as well residence and absence of criminal record.
In addition, the Regulation also removes the requirement for EU citizens to provide an official translation of the public documents most frequently used in a cross-border context; instead EU citizens can request a multilingual standard form, available in all EU languages, to present as translation aid attached to their public documents. If the authorities of the receiving EU country require a certified translation of the public document, they must accept a certified translation made in any EU country.
Finally, the Regulation also establishes an obligation to accept certified copies of public documents, issued in other Member States. Namely, where a Member State permits the presentation of a certified copy of a public document, the authorities of that Member State have to accept a certified copy prepared in another Member State.
At its regular 25th session, the Slovenian Government laid down the texts of the amendments to the Personal Income Tax Act and the Pension and Disability Insurance Act, which will allow for this year’s holiday allowance to be paid up to the amount of average salary without burden of contributions and personal income tax.
If the amendments to the Personal Income Tax Act will therefore be adopted by Parliament, the annual tax holiday allowance will not be included in the tax base for assessing personal income tax, up to 100% of the average monthly salary (currently grossing EUR 1,729.15), and the recovery procedure is already calculated and estimated advance payments of personal income tax in 2019, in cases where employers have already repaid holiday allowances.
At the same time, we emphasize that in the event that you pay the allowance prior to the introduction of the novelties, in the payment of the allowance, the advance of personal income tax and social security contributions must be calculated and paid according to the applicable law.
Remember, the holiday allowance must be paid until June 30th.
The Agency of the Republic of Slovenia for Public Legal Records and Related Services (AJPES) is an authorized institution for the collection, processing and transmission of data from the annual reports of business subjects and for publishing annual reports and other data of companies, sole proprietors and other business entities.
If you are a part of the sole proprietors who determine their tax base through the flat rate expenses regime and business entities that are not established as legal entities and do not have the status of sole proprietors (notaries, lawyers, independent healthcare professionals, independent cultural professionals, athletes, journalists, some other business entities and civil associations) you are not obliged to submit the annual accounting report.
Companies, sole proprietors, cooperatives, associations and political parties must, in accordance with regulations, submit their annual accounting reports for 2018 by the end of March, this year no later than April 1, 2019.
Annual accounting reports are submitted exclusively through the AJPES portal by directly entering the data into the online application, or by importing the XML file.
It is necessary to submit:
You can confirm the submitted data in two ways, using a qualified digital certificate or a notice for AJPES written from the web application, signed by a business entity representative.
We advise you to submit an annual report in a timely manner and avoid the misdemeanour.
As of April 15th 2019, it will be possible to conclude a Prenuptial Agreement in Slovenia. From that day onwards, the provisions of the Family Code (hereinafter: “DZ”) shall fully apply and thus replace the peremptory provisions of the Marriage and Family Relations Act (hereinafter: “ZZZDR”).
According to the first paragraph of Article 62 of the ZZZDR, any contracts governing the regulation of property relations between spouses (and extra-marital partners) must be concluded in the form of a notarial act. Property obtained by work during the period of the marriage is considered spouses joint property.
As of April 15th 2019, DZ will provide similar arrangements in Article 66. In accordance with the first paragraph of Article 77 of the DZ, the special property of each spouse will (meaningfully, as before) be the property obtained by the spouse prior to the marriage or free of charge during the duration of the marriage.
The new Family Code provides the legal possibility for the future (existing) spouses to regulate their property relations differently from the law, namely to exclude the formation of “joint property”, as well as to regulate the consequences in the event of divorce (the distribution of joint property, maintenance right of the former spouse etc.). The future (existing) spouses can arrange the abovementioned property relations by the Marriage Contract (also known as the Prenuptial Agreement). Before the contract is concluded, spouses must inform each other of their property status, otherwise the contract on the regulation of property relations is void.
In order to avoid the uncertainties caused by the possible divorce and if you want to protect your property rights, make sure that they are secured by means of the Marriage Contract.