UPCOMING AMENDMENTS TO TAX LEGISLATION

The Slovenian Government recently prepared a bundle of proposed amendments related to tax legislation, including amendments to the Tax Procedure Act, the Financial Administration Act and the Personal Income Tax Act.

The proposed amendment to the Tax Procedure Act will implement the Council Directive (EU) 2021/514 of 22 March 2021, which introduces a mandatory reporting obligation on all digital platform operators who provide their interface to sellers, whereby the mandatory reporting will relate to the information on business activity of persons who offer goods and services via their platforms. The reporting obligation will apply to the rental of real estate, various modes of transport, personal services and the sale of goods, given that these activities expanded during the Covid-19 epidemic. In relation to goods and services offered on the EU territory, the reporting obligation will apply to all digital platform operators, including those who are not based within the EU.

The above-mentioned directive aims to establish a more effective administrative cooperation by introducing new instruments and adapting the existing instruments. These include measures on joint tax supervision, time-limits, group requests and the omission of a qualified digital certificate as a requirement for accessing documents from the web portal e-Davki (e-Tax).

Amendments are also anticipated on the field of financial administration. The proposed amendment to the Financial Administration Act represents a departure from the systemic arrangements adopted in the first half of this year and aims to increase the efficiency of financial administration. Primarily, the proposed amendments are related to the appointment of directors of financial offices, collegial decision-making and the disciplinary withdrawal of powers from inspectors, as well as the introduction of the possibility of using technical devices to detect illegal production of excise duties, when milder measures are not possible.

While the National Assembly is yet to decide on the above amendments, the amendment to the Personal Income Tax Act was already adopted, however, the National Council elected a suspensive veto on Monday, 5 December 2022. The concerned amendment to the Personal Income Tax Act, inter alia, enacts changes to the amount of general tax relief, which as per 1 January 2023 will be increased to EUR 5,000, instead of EUR 5,500, as enacted in the beginning of this year. Further gradual increase of general tax relief up to EUR 7,500 is being abolished. The veto petitioners disagreed with the aforementioned changes, stating that the amendment is premature and hasty. In their opinion the amendment needs to be reconsidered, while the main focus should be in ensuring higher net salaries. The veto petitioners also opposed to other proposed amendments related to the tightening of business income taxation, the increase of rental income tax and changes to the taxation of agricultural income.

The Ministry of Finance believes that it is imperative for the amendment to the Personal Income Tax Act to be adopted as soon as possible, as it contains amendments that require thorough preparation prior to their implementation. In case of delays with the adoption, the functioning of the tax system could be disrupted and its predictability disabled.

Due to the suspensive veto, the National Assembly will have to re-decide on the adoption of the proposed amendment to the Personal Income Tax Act, whereby a majority vote of all Members of the National Assembly (i.e. at least 46 votes) will be required in order to adopt the amendment.

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