Slovenia: Taxes and Costs

Country Rating  »

Home ›  Europe ›  Slovenia ›  Taxes and Costs

Rental income tax in Slovenia can be very high

Effective Tax Rate on Rental Income
Monthly Income	€1,500	€6,000	€12,000
Tax Rate	15%	15%	15%
Click here to see a worked example
Source: Disclaimer

INDIVIDUAL TAXATION

Slovenia joined the European Union (EU) on 01 May 2004, and the country’s tax system has been harmonized with the EU tax law, including direct taxes.

Nonresident foreigners are taxed on their Slovenian-sourced income. Married couples are taxed separately. Residents of EU member states who file income tax returns in Slovenia can claim some allowances.

INCOME TAX

Taxable income is generally an aggregate of all kinds of income, less allowable deductions.

Rental Income Tax

Non-resident foreigners’ income is taxed at a flat rate of 25%. Taxable rental income may be computed in either of two ways:

• Deduct actually incurred income generating expenses, such as maintenance and repair costs, management fees, and property taxes (supporting documents must be presented)
• Claim standard deduction of 40% of gross rent, for the income-generating expenses

Rental Income Considered as Income from Business Activities

Non-resident foreigners can opt to consider their rental income as income from business activities. In this case, they must register at the Agency of the Republic of Slovenia for Public Legal Records and Related Services to be considered as a sole trader. Under this case, taxable rental income may be computed in either of two ways:

• Deduct actually incurred income generating expenses, such as maintenance and repair costs, management fees, and property taxes (supporting documents must be presented)
• Claim standard deduction of 25% of gross rent, if certain conditions are fulfilled

CAPITAL GAINS TAX

Capital gains are taxed at a flat rate of 20%. However, the rate is reduced by 5 percentage points for every 5-year holding period, which effectively means that properties held for 20 years or more are exempt from capital gains taxation. The applicable rates are as follows:

Taxable capital gains are computed by deducting acquisition costs and incidental costs from the gross selling price, which is at least the market value of the property.

Properties acquired before 01 January 2002 are not liable to capital gains tax. If the property served as the taxpayer’s permanent residence for at least three years prior to the sale, gains are also exempt from capital gains tax.

CORPORATE TAXATION

INCOME TAX

The general corporate profit tax for 2007 is 23%. The corporate tax will be 22% for 2008, 21% for the year 2009, and 20% for 2010 and beyond. In computing of taxable income, all income-generating expenses are deductible.

Company assets are depreciated using the straight line method, and the maximum annual depreciation rates vary depending on the category of the assets (as assessed by the government). The maximum annual depreciation rates for building projects including investment property is 3%.

Capital Gains

Capital gains are usually aggregated with the company’s other income, and are taxed at the general corporate rate.

PROPERTY TAXES

Property Tax

Property tax is levied on urban premises based on their type and value (as determined by the government). The tax rates for dwellings range from 0.10% to 1%. The rate for business premises varies between 0.15% and 0.25%.

Slovenia - more data and information

• Guide to buying houses and registering property sales in Slovenia

Your Comments

Post a comment