VAT, GST and Sales Tax in Slovenia

Summary

Name of the tax Value-added tax (VAT)
Local name Davek na dodano vrednost (DDV)
Date introduced 1-Jul-99
Trading bloc membership European Union (EU) Member State
Administered by Ministry of Finance (Tax Administration) (http://www.fu.gov.si/)
VAT rates
Standard 22%
Reduced 9.50%
Other Zero-rated and exempt
VAT number format SI12345678
VAT return periods Monthly or quarterly
Thresholds Registration
Businesses established in Slovenia EUR50,000 in the preceding 12 months
Businesses not established in Slovenia None
Cadastral income from agricultural and forestry land for agricultural and forestry activities EUR7,500
Distance selling EUR35,000
Intra-Community acquisitions None
Recovery of VAT by non-established businesses Yes

Scope of the tax

VAT applies to the following transactions:

  • The supply of goods or services made in Slovenia by a taxable person
  • The intra-Community acquisition of goods from another EU Member State by a taxable person
  • Reverse-charge services received by a taxable person in Slovenia
  • The importation of goods from outside the EU, regardless of the status of the importer

Special rules apply to intra-Community transactions involving new means of transport and distance sales (see the chapter on the EU).

Who is liable

A taxable person is any person who independently carries out in any place any economic activity, regardless of the purpose or results of that activity.

VAT registration is required before the beginning of taxable activities in Slovenia. Under the VAT law, retrospective VAT reg­istration is not possible.

Group registration. VAT group registration is not allowed under the VAT law. Legal entities that are closely connected must regis­ter for VAT individually.

Non-established businesses. A “non-established business” is a business that does not have an establishment in Slovenia. A non-established business that makes supplies of goods or ser­vices in Slovenia is liable to account for VAT on these supplies.

Consequently, non-established businesses must register for VAT if they make any of the following supplies:

  • Intra-Community supplies
  • Intra-Community acquisitions
  • Distance sales in excess of the threshold
  • Supplies of goods and services that are not subject to the re verse charge (for example, goods or services supplied to pri­vate persons)

Non-established businesses that perform only VAT exempt and/or zero-rated transactions do not have to register for VAT.

Tax representatives. A nonresident business (taxable person) that has its seat outside the EU must appoint a tax representative.

A nonresident business (taxable person) from another EU Member State that does not have a registered business or fixed establishment in Slovenia may appoint a tax representative. Individuals and legal entities that are taxable persons in Slovenia can be appointed as tax representatives if they have an establish­ment or permanent address in Slovenia and are not a branch of a company.

A nonresident business, either established in another EU Member State or third country, that wishes to account for an import in a VAT return has to appoint a VAT representative. The VAT repre­sentative is held jointly and severally liable for any VAT due on imports.

Reverse charge. The reverse charge applies to supplies of most services made by non-established businesses to taxable persons registered for VAT in Slovenia. The recipient of the services accounts for VAT using the appropriate Slovenian VAT rate. If the reverse charge applies, the non-established supplier is not required to register for VAT in Slovenia.

The reverse charge does not apply to the following services:

  • Real estate
  • Restaurant and catering services
  • Cultural, artistic, scientific, educational, sporting, entertainment or similar services
  • Valuations of movable tangible property or work on such property
  • Short-term rentals of vehicles

Slovenia applies a domestic reverse-charge mechanism for cer­tain supplies and services. However, this domestic reverse-charge mechanism does not prevent a foreign supplier from registering locally for VAT purposes. The following activities fall within the scope of the domestic reverse charge:

  • Certain supplies and services falling in Category F of the Slovenian Standard Classification of Activities and the erection of montage houses
  • Hiring out of staff used for activities falling in Category F of the Slovenian Standard Classification of Activities
  • Supplies of real estate for which the parties opt for VAT taxation
  • Supplies of used material waste and scrap (special listed goods)
  • Trade of greenhouse gas emissions

Registration procedures. VAT registration consists of three phas­es. In the first phase the taxable person and its legal representa­tive are entered in the Slovenian tax register and assigned tax numbers (paper forms available in English). In the second phase the taxable person is registered in the electronic filing system of the Slovenian Tax Authorities (paper forms available in English). For registration in the electronic filing system a special elec­tronic certificate should be obtained. In the last phase the appli­cable form for VAT registration is submitted via this electronic system.

Depending on the responsiveness of the tax authorities, the tim­ing of each step varies. A VAT registration (all three phases) usually takes 6 to 8 weeks to complete.

Late-registration penalties. A penalty may be imposed for late registration or failure to register for VAT in Slovenia and for late filing or failure to file VAT returns. Penalties vary from EUR2,000 to EUR125,000. For late payment or nonpayment of VAT, a penalty ranging between EUR2,000 and EUR125,000 may be imposed. In addition, interest for late payment is charged at a rate of 0.0247% per day. Penalties ranging from EUR200 to EUR4,100 may be imposed on the responsible person of the legal entity who commits an offense, in addition to the company itself.

Digital economy. Effective 1 January 2015, new rules apply to the place of supply for supplies of telecommunications, broadcasting and electronic services to non-VAT taxable customers. For fur­ther details of the VAT rules on electronic services in the EU, please refer to the European Union chapter.

Mini One-Stop Shop. Only VAT taxable persons that are estab­lished, have a permanent establishment or are VAT registered in Slovenia can register for MOSS in Slovenia. A VAT taxable per­son should be able to file the application for registration of MOSS via the electronic filing system of the Slovenian Tax Authorities. If a VAT taxable person registered for MOSS in Slovenia also provides electronically supplied services in Slovenia it should report the services provided in Slovenia via a regular VAT return and not through the special MOSS return. VAT refund claims in the member states of consumption of ser­vices should be filed through a VAT refund claim and not through the MOSS VAT return.

Deregistration. A taxable person can deregister for VAT by sub­mitting a deregistration request to the tax authorities in elec­tronic form through their online portal. The tax authorities should decide within 30 days. The taxable person is deregistered as of the date stated in the tax authorities’ decision.

VAT rates

The term “taxable supplies” refers to supplies of goods and ser­vices that are subject to any rate of VAT, including supplies that are exempt with the right to deduct input VAT. The term “exempt supplies” refers to supplies of goods and services that are not subject to tax. Exempt supplies do not create the right to input tax deduction (see Section K).

Some supplies are classified as “exempt with the right to deduct input VAT,” which means that no VAT is chargeable, but the sup­plier may recover related input tax. “Exempt with the right to deduct input VAT” supplies include exports of goods outside the EU and related services and intra-Community supplies of goods and intangible services supplied to another taxable person estab­lished in the EU or to a recipient outside the EU (see the chapter on the EU).

The VAT rates are:

  • Standard rate: 22%
  • Reduced rate: 9.5%

The standard rate of VAT applies to all supplies of goods or ser­vices, unless a specific measure provides for the reduced rate or exemption.

Examples of goods and services taxable at 9.5%

  • Foodstuffs (except alcoholic drinks and catering services)
  • Water supplies
  • Passenger transport
  • Books, newspapers and periodicals
  • Services of authors and composers
  • Agricultural products and services
  • Pharmaceutical products and medical equipment
  • Cultural events
  • Hotel accommodation
  • Use of sports facilities
  • Services of undertakers and cemeterial services

Examples of exempt supplies of goods and services

  • Real estate transactions (except “new buildings”)
  • Financial services
  • Insurance transactions
  • Betting, gambling and lotteries
  • Public radio and television broadcasts
  • Education
  • Health care and medical services
  • Cultural services

Option to tax for exempt supplies. A taxable person may opt to tax real estate transactions (except “new buildings”), provided that the recipient has the full right to deduct VAT. The tax authorities have to be notified of the option to tax no later than the last work­ing day of the month following the month in which the transac­tion took place.

Time of supply

The time when VAT becomes due is called the “chargeable event” or “tax point.” The following are the general rules in Slovenia for determining the chargeable event:

  • VAT is due when goods are delivered or when services are performed.
  • If no invoice is issued for supplied goods or services, VAT is due on the last day of the tax period (month) in which the goods are delivered or the services are performed.

Prepayments. If payment is made before the supply is made (pre­payment), VAT is due on the day on which the prepayment is received. For intra-Community acquisitions or supplies of goods, prepayments do not create a tax point.

Intra-Community acquisitions. For intra-Community acquisitions of goods, VAT is due on the day when the invoice is issued. If an invoice for the supply is not issued or is issued before the supply is made, VAT is due on the 15th day of the month following the month in which the goods are delivered.

Imported goods. VAT for imported goods becomes due when the import is made or when the goods leave the duty suspension regime and are released for free circulation.

As of 1 July 2016, VAT on imports can be accounted for in the VAT return, subject to certain conditions.

Cash accounting for small businesses. A domestic taxable person whose taxable turnover (excluding VAT and excluding sales of assets) did not exceed EUR400,000 in the previous 12 months and whose turn over is not expected to exceed this limit in the next 12 months, may, under certain conditions, charge and pay VAT on a cash basis; that is, on the basis of payments received for its supplies of goods and services. A taxpayer that uses the cash accounting scheme may deduct input tax on its purchases only when the VAT is fully paid. For related companies, the turn­over threshold applies to the whole group.

Reverse-charge services. For reverse-charge services, VAT becomes due when services are performed.

Continuous supplies of services. In case of continuous supplies of services where periodical invoices are raised or payments are made, VAT becomes due upon expiry of the period to which the payments or invoices relate. Where services are continuously supplied over a period of more than one year and no invoices are issued or payments are made during that period, VAT becomes due at the end of each calendar year, until such supplies of ser­vices come to an end.

Intra-Community supplies of goods. For intra-Community sup­plies of goods, VAT becomes due on the day when the invoice is issued. If an invoice for the supply is not issued, VAT becomes due on the 15th day of the month following the month in which the goods are supplied.

Leased assets. In case of a financial lease (where the ownership of goods is transferred to the lessee upon payment of the last installment) this is considered a supply of goods and VAT becomes due when the assets are physically handed over. An operational lease is considered a service and VAT becomes due when the service is performed.

Recovery of VAT by taxable persons

A taxable person may recover input tax, which is VAT charged on goods and services supplied to it for business purposes. A taxable person generally recovers input tax by deducting it from output tax, which is VAT due on supplies made.

Input tax includes VAT charged on goods and services supplied in Slovenia, VAT paid on imports of goods and self-assessed VAT on intra-Community acquisitions of goods and reverse-charge services (see the chapter on the EU).

A valid tax invoice or customs document must generally accom­pany a claim for input tax recovery.

Nondeductible input tax. Input tax may not be recovered on pur­chases of goods and services that are not used for business pur­poses (for example, goods acquired for private use by an entrepreneur). In addition, input tax may not be recovered for some items of business expenditure.

Examples of items for which input tax is nondeductible

  • Hospitality costs (accommodation, food and drinks, and enter­tainment)
  • Purchase, lease, fuel and maintenance of cars and boats (except if used by driving schools or for public transportation)

Examples of items for which input tax is deductible (if related to a taxable business use)

  • Advertising
  • Purchase, lease, fuel and maintenance of buses and trucks
  • Telephones
  • Books and newspapers
  • Attendance at seminars (except food and drinks)
  • Raw materials

Partial exemption. Input tax directly related to the making of exempt supplies is generally not recoverable. If a taxable person makes both exempt and taxable supplies it may not recover input tax in full. This situation is referred to as “partial exemption.”

Input tax directly relating to taxable supplies is fully recoverable, while input tax directly relating to exempt supplies is not recover­able.

To determine the amount of input VAT that may be recovered one of the following methods may be used:

  • Deduction of input VAT using actual data, provided that the tax­able person maintains (in its books and accounts or other records) information regarding the total amount of input VAT including the amount of input VAT that is deductible.
  • Determination of the amount of deductible input VAT using a pro rata method for the whole business, if the taxable person is unable to determine the amount of input VAT as described above.
  • Determination of the amount of deductible input VAT using several deductible amounts for each of its various fields of busi­ness activity separately. A “field of business activity” is any level of activity of the taxable person according to a standard classi­fication of activities or organizational units of the taxable per­son (such as a separate plant or business unit).

Under the pro rata method, the total annual supplies on which input VAT is deductible (exclusive of VAT) is divided by the total annual supplies, including exempt supplies, state subsidies and grants.

Capital goods. Capital goods are items of capital expenditure that are used in a business over several years. Input tax is deducted in the VAT year in which the goods are acquired and taken into use. The amount of input tax recovered depends on the taxable per­son’s partial exemption recovery position in the VAT year of acquisition and first use. How ever, the amount of input tax recov­ered for capital goods must be adjusted over time if the taxable person’s partial exemption recovery percentage changes during the adjustment period.

In Slovenia, the capital goods adjustment applies to the following assets for the number of years indicated:

  • Real estate: adjusted for a period of 20 years
  • Other tangible fixed assets: adjusted for a period of five years

Refunds. If the amount of input tax recoverable in a tax period exceeds the amount of output tax payable in that same period, the taxable person has an input tax credit. An input tax credit is carried forward to the following VAT tax period. However, a VAT-registered person is entitled to a refund of the input tax credit within 21 days after submitting a VAT return form for the tax period.

The tax authorities pay interest on delayed repayments of VAT. The statutory rate of interest is 0.0247% per day.

Preregistration costs. According to the official guidance issued by the Slovenian tax authorities, a VAT taxable person has the right to deduct input VAT incurred prior to the VAT registration in Slovenia (under the assumption that all other conditions for VAT deduction are met).

Write-off of bad debts. If payment for a supply is not received a taxpayer may adjust (reduce) the VAT amount if according to the final court resolution of a completed bankruptcy procedure or successfully completed compulsory settlement the taxpayer’s receivables were either not settled or not settled in full. The same applies to a taxpayer who obtains a final court resolution or another document clearly showing that in the closing execution procedure, the taxpayer’s receivables were not settled or not set­tled in full. A taxpayer may also adjust the VAT amount if their receivables were not settled due to the fact that the debtor was deleted from the court register or any other relevant register or prescribed records.

Regardless of the above provisions in the Slovenian VAT legisla­tion, the amount of non-paid VAT for outstanding receivables can be adjusted after submission of a claim for the respective receiv­able in the bankruptcy proceeding or compulsory settlement. However, this claim should first be recognized by the applicable officials in the bankruptcy proceeding or compulsory settlement.

Noneconomic activities. A VAT taxable person cannot deduct input VAT from goods and services that were used for its noneco­nomic activities.

Recovery of VAT by non-established businesses

Slovenia refunds VAT incurred by businesses that are neither established nor registered for VAT in Slovenia. Non-established businesses may claim Slovenian VAT to the same extent as VAT-registered businesses.

Businesses established in the EU can submit a claim for refund with the tax authorities of their country of establishment. Busi­nesses established outside the EU can claim a refund under the terms of the EU 13th Directive. Slovenia applies the condition of reciprocity with respect to refund claims. This may exclude appli­cants from some non-EU countries.

Refund application. For non-EU businesses, the deadline for refund claims is 30 June following the calendar year in which the tax was incurred. This deadline is strictly enforced.

EU businesses can make refund claims for Slovenian VAT in accordance with the procedure in their country of establishment.

Claims filed in Slovenia must be submitted in the Slovenian lan­guage. Applications for refund must be accompanied by the rel­evant documentation (see the chapter on the EU).

The minimum claim period is three months. The minimum claim for a period of less than a year is EUR400. The maximum period is one year. For an annual claim, the minimum amount is EUR50. The claim period can be shorter than three months if this period represents the rest of the calendar year.

The tax authorities must stamp each submitted invoice and import document and return them to the claimant within 30 days of receipt. The tax authorities must also rule on the claim within six months after the submission of the claim. If the claim is approved, the refund is processed within six months after the submission of the claim by either remitting payment into a Slovenian bank account or making a transfer abroad (the claimant is responsible for all expenses related to this repayment).

Applications for refunds of Slovenian VAT by non-EU businesses must be filed with the Slovenian tax authorities in electronic form through their online portal. In order to be able to gain access to the online portal of the Tax Authorities, a non-EU business and its legal representative(s) must obtain Slovenian tax numbers.

Invoicing

VAT invoices and credit notes. A taxable person must generally provide a VAT invoice for all taxable supplies made, including exports and intra-Community supplies. Invoices are not required for a limited range of supplies, including the following:

  • Supplies by taxpayers that perform agricultural or forestry activities and sell these products and services to final consumers
  • The sale of tickets, season tickets and tokens for passenger transport (trains, buses and cable cars), stamps, court stamps, postal forms, payments for participating in games of chance, periodicals, vending machine sales, sale of mobile phone cards by ATM, GMS network and the internet, sale of tokens from change machines and supplies of services at “teleservice points”
  • Exempt financial services performed in Slovenia or outside the EU for which the taxable person issues a large number of docu­ments to recipients.

However, the taxable person should issue a consolidated docu­ment, such as a separate bank statement, which includes the value of services charged and the clause that VAT is not charged according to the applicable article of the VAT law.

A VAT invoice is necessary to support a claim for input tax deduc­tion or refund under the applicable EU Directive refund scheme (see the chapter on the EU).

If the taxable amount subsequently changes as a result of the return of goods or the granting of a discount, the tax base is low­ered accordingly. The taxable person may adjust (reduce) the amount of VAT payable if it informs the recipient in writing (for example, by issuing a credit note) about the nondeductible amount. A credit note must mention all information prescribed for an invoice including a reference to the invoice.

Electronic invoicing. Effective 1 January 2013, the VAT Act was amended to permit electronic invoicing in line with EU Directive 2010/45/EU.

Proof of exports and intra-Community supplies. Slovenian VAT is not due on supplies of exported goods or on intra-Community supplies of goods (see the chapter on the EU). However, to qualify as VAT-free, exports and intra-Community supplies must be supported by evidence that the goods have left Slovenia. Acceptable proof includes the following documentation:

  • For an export, a copy of the export document, officially certi­fied by customs. In certain cases, an invoice stamped by cus­toms, a mail freight declaration, or a transport document is acceptable.
  • For an intra-Community supply, an invoice with the purchaser’s VAT identification number and corresponding transport docu­ment (or other suitable document that clearly refers to the freight of goods related to the invoice).

Foreign-currency invoices. Invoices may be issued in a foreign currency. The VAT amount must always be in euros (EUR). The exchange rate that must be used is the foreign exchange rate of the European Central Bank (also published by the Bank of Slovenia) that is valid on the date on which the tax liability arises and that is published by the Bank of Slovenia.

B2C invoices. Effective 1 January 2015, new rules apply to the place of supply for supplies of telecommunications, broadcasting and electronic services to non-VAT taxable customers. For fur­ther details of the VAT rules on electronic services in the EU, please refer to the European Union chapter.

Slovenian suppliers of these services are required to issue invoic­es to nontaxable customers.

VAT returns and payment

VAT returns. Slovenian VAT returns are submitted for monthly or quarterly tax periods. Quarterly tax periods coincide with the months of March, June, September and December. A tax period for each taxable person is determined on the basis of its turnover in the preceding calendar year in accordance with the following rules:

  • Taxable persons with a turnover up to EUR210,000 submit quarterly tax returns, unless the taxable person engages in intra-Community transactions and is liable to submit a recapitu­lative statement (see Section K).
  • Taxable persons with a turnover greater than EUR210,000 sub­mit monthly tax returns.

The tax period for newly established taxable persons is a calendar month for the first 12 months of business activity. The tax period for foreign taxable persons (non-established businesses) is always a calendar month.

VAT returns must be submitted and any VAT due must be paid in full by the last working day of the month following the end of each tax period. If the taxable person performs intra-Community supplies and must file a recapitulative statement (see Section K), the VAT return must be submitted by the 20th day of the month (or earlier if the 20th day is not a working day) following the reporting period (calendar month).

Special schemes. The special scheme for domestic reverse charg­es requires the supplier and recipient of these supplies to record the transaction and applicable VAT (charged amount and deduc­tion) in specific boxes in the VAT return. Furthermore, the sup­plier must report the reverse-charged supplies (domestic) in a separate form to the Slovenian tax authorities.

Electronic filing and archiving. VAT returns must be filed through the electronic filing system of the Slovenian tax authorities (“eDavki”). For registration in the electronic filing system a spe­cial electronic certificate should be obtained (please see Section C: Registration procedures).

All received and issued invoices should be archived for 10 years after the end of the year to which they relate (20 years if the invoices relate to immovable property). A taxable person may archive invoices outside Slovenia after informing the tax authori­ties. The basic rule is that invoices must be archived in their original form. The condition for electronic archiving is that a taxpayer ensures that the file content cannot be modified or erased while at the same time it can be reproduced if needed.

Annual returns. Not applicable.

Penalties

Penalties are imposed for a range of VAT offenses. The following are the penalties:

  • Late filing or non-filing of a VAT return: a penalty ranging from EUR2,000 to EUR125,000
  • Late payment or nonpayment of VAT: a penalty ranging from EUR2,000 to EUR125,000
  • An offense committed by a responsible person of a taxable entity: a fine ranging from EUR200 to EUR4,100

Interest. Default interest is imposed for the late payment of VAT due. The daily statutory rate of default interest is 0.0247%.

Criminal offenses. The criminal offense of tax evasion is punish­able by a term of imprisonment ranging from one to eight years.

EU filings

Intrastat. A Slovenian taxable person that trades with other EU countries must complete statistical reports, known as Intrastat, if the value of either its sales or purchases of goods exceeds certain thresholds. Separate reports are required for intra-Community acquisitions (Intrastat Arrivals) and for intra-Community supplies (Intrastat Dispatches).

For 2016, the threshold for Intrastat Arrivals is EUR120,000 and the threshold for Intrastat Dispatches is EUR200,000.

Intrastat returns must be submitted by the 15th day of the month following the reporting period (calendar month). If the 15th day is a nonworking day, the Intrastat return must be submitted by the last working day before the 15th day of the month.

Intrastat returns may be submitted in paper form, electronic for­mat or via the internet (http://intrastat-surs.gov.si/).

For a legal entity, a penalty of up to EUR1,250 may be imposed for late submission, failure to submit, or for inaccurate Intrastat declarations. In addition, a penalty of up to EUR125 may be imposed on a person responsible for the return.

Recapitulative Statements (EU Sales List). If a Slovenian taxable person performs intra-Community supplies or reverse-charge services that are taxable for VAT purposes in the other EU state in a tax period, it must submit a Recapitulative Statement to the Slovenian tax authorities. The Recapitulative Statement is not required for any periods in which the taxable person does not make any intra-Community supplies.

The Recapitulative Statement must be submitted monthly by the 20th day of the month (or earlier if the 20th day is not a working day) following the reporting period (calendar month).

Penalties ranging from EUR2,000 to EUR125,000 may be imposed for late submissions, failures to submit, or inaccurate Recapitulative Statements.