Corporate Tax 2010 - BMR Advisors

Wolf Theiss Attorneys-at-Law
Slovenia
the disposal of a qualified participation. Pursuant thereto, a resident
company or the permanent establishment of a non-resident
company is entitled to exclude 50% of the capital gains realised
from the disposal of shares or other capital participations from the
taxable base, provided that:
the shares represent a participation of at least 8% of the
capital or voting rights of the company;
the shares have been held for at least six months;
during the holding period, at least one person was employed
by the taxpayer; and
the participation is not in a company resident in a low-tax
country (a list of low-tax countries is published by the
Slovenian Ministry of Finance; see question 3.7 above).
5.4 Is there any special relief for reinvestment
From 1 January 2008, companies are permitted to apply for an
investment tax credit of 20% of the amount invested in equipment
and intangible assets. The aggregate annual amount of such credit
may not exceed EUR 10,000 in the year of investment and an
additional EUR 10,000 in the following year. Any unused credit
may be carried forward for five tax years.
Furthermore, a tax deduction may be claimed for 20% of the
amount invested in internal research and development activities of
a company or in the purchase of research and development services
from outside. Taxpayers established in specific regions may claim
a regional R&D investment deduction in the amount of 30% or 40%
of the invested amount (depending on the region). The deduction is
limited to the taxable income of that tax year; any excess may be
carried forward for five years.
6 Branch or Subsidiary
6.1 What taxes (e.g. capital duty) would be imposed upon the
formation of a subsidiary
Apart from registration fees, there are no special taxes (such as
capital tax) levied upon the establishment of a company.
6.2 Are there any other significant taxes or fees that would be
incurred by a locally formed subsidiary but not by a
branch of a non-resident company
No, there are no such taxes or fees.
6.3 How would the taxable profits of a local branch be
determined
6.4 Would such a branch be subject to a branch profits tax (or
other tax limited to branches of non-resident companies)
There is no branch profits tax or similar tax applicable to branches.
In the event, that a branch constitutes a permanent establishment of
a non-resident, the profit attributable to such permanent
establishment is subject to the 21% (20% as of 2010) corporate
income tax rate.
6.5 Would a branch benefit from tax treaty provisions, or some
of them
Under Slovenian tax law, a branch is not considered as a taxable
entity for corporate income tax purposes and thus it is also not
considered as a person entitled to tax treaty benefits.
However, if a branch qualifies as a permanent establishment within
the meaning of a double taxation treaty, the treaty’s nondiscrimination
provision may be relevant.
6.6 Would any withholding tax or other tax be imposed as the
result of a remittance of profits by the branch
There is no withholding tax levied on the remittance of profits by
the branch to the head office.
7 Anti-avoidance
7.1 How does Slovenia address the issue of preventing tax
avoidance For example, is there a general anti-avoidance
rule or a disclosure rule imposing a requirement to
disclose avoidance schemes in advance of the company’s
tax return being submitted
Apart from the substance-over-form rule, there is no general antiavoidance
rule in Slovenian tax law. Instead, there are several
instruments which aim at preventing tax base erosion, such as the
transfer pricing and the thin capitalisation rules which are
mentioned above.
Furthermore, the Slovenian Corporate Income Tax Act contains
several provisions which apply to transactions between companies
resident in Slovenia and companies resident in low-tax jurisdictions
(see question 3.7 above). These for example stipulate that interest
paid to and dividends received from a company resident in a lowtax
jurisdiction are not tax deductible and not tax exempt,
respectively. Furthermore, any payments made to such companies
for services rendered are subject to a 15% withholding tax.
Slovenia
The determination of the taxable profit of a branch will generally be
relevant only when the branch constitutes a permanent
establishment for corporate income tax purposes. In this case, the
Slovenian Corporate Income Tax Act states that the profit of a
permanent establishment is the profit that would be attributed to it
if it were an independent company performing the same or a similar
activity or transaction.
ICLG TO: CORPORATE TAX 2010
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