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Dividend Tax in Slovenia

Updated on Monday 03rd December 2018

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Dividend Tax in SloveniaA progressive tax system is applied to companies registered in Slovenia. This means that a higher level of income will be charged with a higher tax rate. Any company opened in Slovenia that pays dividends is imposed with a withholding tax rate of 15% on each distributed dividend to residents and non-residents of Slovenia. Our team of specialists in company registration in Slovenia can provide in-depth assistance on the taxation system applicable to local legal entities, as well as on the dividend tax regulations available here. 

What tax regulations are available for companies in Slovenia?  

If an international treaty on the avoidance of double taxation stipulates a lower rate than 15%, this rate will be applicable, but only in the situation in which the respective company is a tax resident of one of the states with which Slovenia has signed this type of tax agreement. Other relevant matters concerning the taxation of dividends in Slovenia are presented below: 
 
  • the withholding tax on dividends can be exempted provided that dividends are distributed between parent companies and their subsidiaries;
  • the above mentioned regulation is applicable only in the situation in which the parent company owns at least 10% of the company’s equity for a continuous period of at least two years (24 months);
  • these rules are available under the European Union’s Parent – Subsidiary Directive, which was adopted in 1990 but, which, over the years, has been constantly updated;
  • it is necessary to know that the taxation of dividends is also completed at the level of natural persons;
  • the individual’s income obtained from dividends is taxed at the standard tax rate of 25%
 
Slovenia has several such treaties where the withholding tax on dividends oscillates between a rate of 5% (with countries such as 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 can obtain a refund on the dividend tax. Our experts in company formation in Slovenia can explain how the double tax treaties are applicable to local and foreign businesses.

Are there any exemptions of the withholding tax on dividends in Slovenia?


According to the Slovenian Corporate Income Tax Act (CITA) the tax on dividends sourced by a Slovenian company is not withheld if the dividends are paid to a business which is a non-resident of Slovenia, under certain conditions: the company is a tax resident of another EU (European Union) or EEA (European Economic Area) member state, its taxes are withheld in the country of residence or if it deducts the dividends received in Slovenia from the tax base in its country of residence.

This exemption from the 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 and our team of consultants in company registration in Slovenia may offer in-depth advice on this matter. 

In order to be qualified for the exemption, the above mentioned types of companies have to be a resident of another EU or EEA member state and prove 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).

Please note that in the case of companies operating in Slovenia in the shipping sector, the taxation is concluded following a special tax regime. In this sense, businessmen who want to open a company in Slovenia in this sector should know that the taxation regarding the corporate income tax and the distribution of the dividends is concluded following the regulations of the CITA, but the tax base is completed following the regulations prescribed by the Tonnage Tax Act.

 

When is it necessary to submit the dividend tax returns in Slovenia?   

According to the Slovenian legislation, the tax returns on dividends have to be submitted on a quarterly basis. An exemption in this case is applicable only in the banking sector, where such documents have to be submitted by the end of the month of February. It is important to know that if the tax returns are not submitted when requested, penalties can be imposed.


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. 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.

 

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Call us now at +385 95 9981 628  to set up an appointment with our company formation consultants in Slovenia. Alternatively you can incorporate your company without traveling to Slovenia.

As a Law Firm Ivan ┼Żupan  client, you will benefit from the joint expertize of local experts and international consultants. Together we will be able to offer you the specialized help you require for your business start-up in Slovenia.

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