In August 2023, a large part of Slovenia was hit by devastating floods, which left considerable economic damage behind. Measures to eliminate the consequences of natural disasters are governed by the Natural Disaster Recovery Act, amendments to which were adopted in August and September 2023.
Due to the extent of the floods, the Act Determining Intervention Measures for Recovery from the Floods and Landslides of August 2023 was additionally adopted, amending the laws currently in force in Slovenia and introducing specific measures. Below, we summarise the main temporary solutions of both laws in the field of taxation.
Support for the self-employed
A self-employed person in Slovenia who is unable to carry out his/her activity or whose activity significantly decreased as a result of the floods is for the period from August to December 2023 entitled to a support of EUR 1,200/month, provided that the following conditions are met:
- the activity is registered at least from 1 July until 11 August 2023;
- no outstanding liabilities towards the tax authorities at the date of submission of the declaration;
- all withholding tax returns from employment income for the last five years have been submitted;
- revenues in 2023 will decrease by at least 25% compared to 2022.
The self-employed person has to submit the declaration for the support for each month via the tax authorities’ information system (eDavki). The final deadline for submitting the monthly declarations for the entire period from August to December 2023 is 31 January 2024, with the payment on 9 February 2024.
Reimbursement of employees’ wage compensation
If an employer who has received (partial) reimbursement of wage compensation paid to employees as a result of force majeure or waiting time due to a natural disaster, has, as of 3 August 2023, paid out profits, purchased its own shares or stakes, paid management bonuses or paid part of the performance-related remuneration of management in or for the year 2023, the employer must notify the Financial Administration of the Republic of Slovenia within two months of the date of the payment.
The employer will have to return the funds received within 30 days after receipt of the decision, together with statutory interest from the date of receiving the reimbursement until the date of the repay.
Employers who fail to notify the Financial Administration of the Republic of Slovenia of their obligation to repay the funds within the prescribed period may be subject to a penalty of EUR 450 up to EUR 20,000.
One-time solidarity aid
One-time solidarity aid paid to an employee in nature or in cash in 2023 for severe flood and landslide damage is not included in the tax base of employment income up to EUR 10,000 (and not up to EUR 2,000, which is the generally applicable amount).
Before the one-time solidarity aid payment, the employee must provide the employer with appropriate proof of the damage suffered.
Additional tax incentive for donation for 2023
An additional tax incentive for donations is introduced in Slovenia for the full amount of the payments, up to a maximum of the tax base of the tax period for legal entities and natural persons carrying out independent economic activities.
The tax incentive applies to all payments up to 31 December 2023, paid to a bank account of the Republic of Slovenia, specially created for this purpose.
Prohibition to dismiss employees
An employer, who benefits from the measure of reimbursement of wage compensation for the period of waiting at home may not initiate proceedings to terminate an employment contract with an employee for business reasons, even after the measure has ceased to apply, for a period equal to the period of receipt of partial reimbursement of wage compensation.
The only exception is if the redundancy plan has already been adopted before 3 August 2023 and the employer has not claimed the right to partial reimbursement of the redundancy payments for these employees.
Disposal of equipment destroyed in a company
A Slovenian taxpayer who purchased the equipment less than three years ago and utilised the investment tax incentive under Article 55a of Slovenian Corporate Income Tax Act (CITA-2) does not have to return the investment tax incentive for the disposal of this equipment due to destruction in floods and landslides.
Solidarity working Saturday
The employer may designate one Saturday in 2023 and one Saturday in 2024 as a solidarity working Saturday, after consultation with the trade union, works council or employees.
Work performed on a solidarity working Saturday will be contributed by the employee to the Fund for the Reconstruction of Slovenia.
Employees will therefore contribute the amount of their net wage for solidarity Saturday by working on that day, based on a prior written agreement with their employer. No social security contributions and taxes are due for payment for work on the Solidarity working Saturday.
The contribution will be calculated and paid by the employer on a special form „Calculation of contribution to the Fund for the Reconstruction of Slovenia”, including the following information:
- the employer and individual employees,
- the total amount of contribution of all employees,
- the contribution of each employee for each working Saturday.
The form is available for submission via eDavki.
The tax return will be due in the month following the solidarity working Saturday and the total amount of contributions for payment will be due within ten days of the return being submitted.
The amendments regarding the solidarity working Saturday were just adopted and are awaiting publication in the Official Journal of Slovenia.
Refund of compensation for the use of building land
Municipalities can refund all or part of the Building Land Use Tax paid to taxpayers who have suffered serious damage as a result of floods and landslides, which have endangered health and caused an inappropriate living environment.
The municipality will reimburse part or all of the contribution by decision, based on the application and criteria set by the municipality.
Special reduced VAT rate for firefighting equipment
A special reduced VAT rate of 5% is introduced for supplies of:
- standardised fire-fighting vehicles and
- special protective and rescue equipment for firefighters.
The special reduced rate may only be applied on condition that the purchaser is a public fire service or a voluntary firefighting unit in a fire brigade.
Accommodation for victims of floods and landslides
Free or reduced rent for persons, who have suffered serious damage to their personal property as a result of floods and landslides and have been forced to find new or temporary accommodation will not be treated as income until the end of 2024.
Accommodation costs incurred by a taxable person offering free or reduced rent to flood and landslide victims are tax deductible until the end of 2024.
If you need more information on the tax measures related to floods and landslides in Slovenia or you need help in preparing the written agreement for the solidarity working Saturday at your company, please visit the website of WTS Slovenia and contact the local experts of WTS Global for Slovenia.
