Österreichische Volksbanken-Aktiengesellschaft ... - Volksbank AG

Slovenian corporate income – taxation regarding the notes
Income deriving from interest achieved by a legal person is in accordance with the provision of
Corporate income tax Act (henceforth CITA) subjected to taxation in the same way as any other
ordinary and extraordinary income received by a legal person. This means that income deriving
from interest is included in the taxable basis for Corporate income tax (henceforth CIT). Taxable
person for CIT is a legal person- a resident, whereas the subject of taxation is any income
achieved (received) in or outside of Slovenia i.e. worldwide taxation. A non-resident is on the
other side subjected to source taxation and taxation on income deriving from carrying on of
business activities in a permanent establishment or through a permanent establishment in Slovenia.
General tax rate for CIT in Slovenia is 23 per cent. for 2007.
According to the provision of Article 24 of CITA dividends and other payments made as distribution
of profit are exempt from taxable basis of a taxable person for CIT under certain conditions.
Dividends and other payments made as distribution of profit are exempt from the taxable
basis of a Slovene taxable person- recipient of dividends or other payments made as distribution
of profit, if the payer is:
� a taxable person according to Slovenian CIT; or
� for tax purposes, resident in an EU Member State in accordance with that State’s law and
is not, under the terms of an international agreement on the avoidance of double taxation
of income concluded with non-EU Member State deemed to be resident outside the EU;
and is subject to one of the taxes to which the common system of taxation applies which
is applicable in the case of parent companies and subsidiaries of different EU Members
States, and which are laid down by the minister responsible for finance, where a company
which is exempt from the tax or has the option to choose shall not be deemed a taxable
person; or
� taxable person for CIT in a country that has CIT comparable to Slovenian CIT and is not
the resident of a country (and the permanent establishment is not situated therein) where
general or average nominal tax rate is lower than 12,5 per cent. and the country is not on
the “black list” of Ministry of Finance. 51
Provision of the Article 74 of the CITA defines that income, treated as dividend or income similar
to dividend, includes amongst others:
� profit distributed in relation to shares and loans guaranteeing participation in the person
making the payment,
� hidden profit distribution (e.g. if the interest are not paid in accordance to the arm’s
length principle).
Potential double taxation of income is avoided using the method of avoidance of double taxation
as defined in the Double taxation treaty or the method as defined in the Articles 62 and 63 of
CITA. The purpose of these provisions is that a taxable person, a Slovene resident, is ensured
conditions for avoidance of double taxation that might occur during the carrying out of crossborder
business activities, meaning that income of a Slovene resident deriving from a source
outside of Slovenia which is taxable in that other source country is not again subjected to taxation
in Slovenia. In order to eliminate the double taxation of dividends and other payments of
distribution of profit in cases where parent companies, Slovene residents, hold qualified shares
in daughter companies in other EU member states, provision of Article 24 of CITA prescribes
51 Please note that Ministry of Finance till now has not issued this »black list«.
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