Tax Alert, January 2023

First, we wish you a happy, healthy and successful New Year and plenty of useful and helpful reads in our tax news.

In our first Tax Alert this year, we present an overview of the changes of Decree on the tax treatment of reimbursement of costs and other income from employment and a notice about the applicability of changes to the Personal Income Tax Act. 

THE CHANGES AND AMENDMENDS  OF  DECREE ON THE TAX TREATMENT OF REIMBURSMENT OF COSTS AND OTHER INCOME FROM EMPLOYMENT

At the end of 2022, the Government of the Republic of Slovenia adopted amendments and changes to Decree on the tax treatment of reimbursement of costs and other income from employment.

The changes relate to the upper limit of tax-free amount for jubilee awards, severance payment upon retirement and solidarity payments.

The amendment introduces a different way of determining the amount for jubilee awards and severance payments upon retirement, which is tied to a certain percentage of the average salary in the Republic of Slovenia at the time of payment rather than fixed amount which was in place up to now.

Also, changes were made to the amount of non-taxable income for field allowance, per diems, allowance for living separately and payments to apprentices and students.

The mentioned changes refer to payments made from 1 January 2023 onwards.

PERSONAL INCOME TAX ACT

The amendment to the Personal Income Tax Act, which we wrote about in our Tax News in December, entered into force on January 1, 2023. At the same time, a constitutional review of the amendments was filed on 30 December 2022. During the constitutional review, the Constitutional Court can suspend the implementation of changes to the law, which we will inform you about in our tax alert or tax news.