Tax News, February 2025

In February edition of EY Tax news we would like to remind you to submit your tax returns by 28 February for certain categories of income from last year, if you have not done so already and inform you about the judgment of the Administrative Court of the Republic of Slovenia regarding the significance of the absolute statute of limitations and about the timeline for reporting foreign income for taxpayers employed by a Slovenian employer.

SUBMISSION OF TAX RETURNS BY FEBRUARY 28, 2025

In accordance with the Tax Procedure Act (ZDavP-2), individuals are required to submit their tax return for the assessment of personal income tax on interest, securities, dividends, and rental income for the year 2024 by 28 February 2025. This applies to both residents and non-residents of the Republic of Slovenia.

Residents are not required to file a tax return for interest on bank deposits if the total amount in 2024 does not exceed EUR 1,000. Regarding rental income, residents must report all earnings, regardless of the country of origin, while non-residents are only required to report rental income sourced from Slovenia.

Tax returns can be submitted via the eDavki portal, by mail, or in person at any office of the Financial Administration of Slovenia. 

ADMINISTRATIVE COURT RULES THAT AFTER THE EXPIRATION OF THE TEN-YEAR ABSOLUTE STATUTE OF LIMITATIONS, ASSESSMENT OF TAX OBLIGATION NO LONGER POSSIBLE

The Administrative Court of the Republic of Slovenia, in its judgment No. II U 392/2022-23 dated 11 November 2024, addressed a case in which the plaintiff claimed that the assessment of his income tax for the year 2009 had expired, as the ten-year period from the start of the statute of limitations had elapsed on 1 November 2020, and the (new) decision, by which his income tax was assessed, was only delivered to him on 7 January 2022. The plaintiff argued that the tax assessment decision cannot take effect until the taxpayer is informed of it.

The defendant – the state on behalf of the tax authority – insisted on the position that the effect of absolute statute of limitations had not occurred, as individual actions of the tax authority interrupted the statute of limitations for the assessment of income tax for the year 2009. The assessment of the plaintiff's income tax for the year 2009 was indeed the subject of several administrative procedures, which concluded with the issuance of an assessment decision on 20 November 2017, which was delivered to the plaintiff on 7 January 2022.

The Administrative Court ruled that after the expiration of the ten-year statute of limitations, the tax obligation can no longer be assessed, regardless of the number of interruptions of the statute of limitations for assessment, which serve only for the purposes of interrupting the relative statute of limitations. According to the court's assessment, the ten-year absolute statute of limitations requires the tax authority to issue an assessment decision and deliver it to the taxpayer within this period. Since the assessment decision in the present case was delivered to the plaintiff after the expiration of the ten-year period for the assessment of income tax, the court decided that absolute statute of limitations had occurred.

TIMELINE FOR REPORTING FOREIGN INCOME FOR TAXPAYERS EMPLOYED BY A SLOVENIAN EMPLOYER

If employees of an employer in the Republic of Slovenia receive benefits in kind from a foreign affiliated company as a reward, the employer in Slovenia is considered to be payer of tax (withholding agent) according to the Tax Procedure Act.

The obligation to report income is determined by the Tax Procedure Act, which also establishes deadlines for the payment of tax obligations. If an employee receives income in kind from a foreign company, the current legislation does not specify any particularities, meaning that the tax obligation arises when the employee receives the income. Thus, the tax obligation takes effect on the day the benefit in kind is received by the employee.

The employer must obtain information from the foreign affiliated company in a timely manner (at the latest on the day the benefit in kind is provided) to ensure the timely reporting of the income or benefit granted to the employee. To avoid delays in reporting and paying personal income tax and social security contributions, the employer must promptly obtain all necessary information from the affiliated company to fulfil their tax obligations on time. Otherwise, a delay in reporting income may occur.

In the event of a reporting delay, the employer should submit a withholding statement as a voluntary self-disclosure and pay any accumulated late interest.