A progressive tax system is applied in Slovenia. This translates into an exponential growth of both incomes and taxation. Any company opened in Slovenia is paying dividends withholds at a rate of 15% on each distributed dividend to residents and non-residents of Slovenia.
If an international treaty on avoidance of double taxation stipulates a lower rate than 15%, this rate applies. Slovenia has several such treaties where the withholding tax on dividends oscillates between 5% (Germany, Ireland, Luxembourg) and 10% (UK). Furthermore, the Slovenian Corporate Income Tax Act (CITA) stipulates that companies which reinvest the dividends in order to create jobs and to achieve economic growth are returned the dividend tax. Our experts in company formation in Slovenia can explain how the double tax treaties can be applied in our clients` best interest.
According to the Slovenian Corporate Income Tax Act (CITA) the tax on dividends sourced by a Slovenian company is not withheld if they are paid to a business non-resident of Slovenia, under these conditions:
• it is a resident of another EU or EEA Member State;
• its taxes are withheld in the country of residence;
• it deducts the dividends received in Slovenia from the tax base in its country of residence.
This exemption from withholding tax on dividends is extended to non-resident pension funds, insurance companies that are allowed to provide a pension plan and investment funds. These business entities must satisfy a number of provisions in order to benefit from the exemption. They have to be a resident of another EU or EEA Member State and provide that the exemption does not represent a mechanism to avoid taxation in the country of origin. The withholding tax applies to all dividends received by a non-resident in relation to its Slovenian company (permanent establishment).
The Slovenian authorities have not reached an agreement on exchange of information on tax matters with Lichtenstein. This implies that the tax on dividends must be withheld in all cases when incomes are paid to entities in this country.
All investors who seek assistance in company formation services in Slovenia or any information regarding the dividend tax system are welcomed to contact our team of local consultants.