Tax News, January 2025



NEW RULES ADOPTED FOR WITHHOLDING TAX PROCEDURES (FASTER DIRECTIVE)

On 10 December 2024, the EU Council adopted the proposal for the Council Directive on Faster and Safer Relief of Excess Withholding Taxes (FASTER Directive), aimed at establishing more efficient procedures to avoid double taxation.

The Directive introduces innovations and improvements, particularly in the area of complex and often lengthy administrative procedures.  It introduces the following:

  • The issuance of a unified digital tax residency certificate (so called eTRC), which would be issued in 14 days and would be valid until the end of the calendar year. For example, investors with investments spread across the EU will only need one digital certificate to submit multiple tax refund claims.
  • Two fast procedures that supplement the standard procedure for the refund of withholding tax, namely the procedure for deduction at source, where the appropriate tax rate is applied upon payment of dividends or interest, and the fast refund system, where the request for the refund of overpaid withholding tax is granted within a specified period. Under certain conditions, member states will be able to maintain their existing systems.
  • Standardized reporting and registration of financial intermediaries, which will facilitate easier detection of potential tax fraud.

Member states will need to transpose the FASTER Directive into national law by 31 December 2028, and the new rules must be applied no later than 1 January 2030.


RATIFICATION OF THE CONVENTION BETWEEN THE REPUBLIC OF SLOVENIA AND AUSTRALIA FOR THE ELIMINATION OF DOUBLE TAXATION

The Republic of Slovenia and Australia have concluded The Convention between the Republic of Slovenia and Australia for the elimination of double taxation with respect to taxes on income and the prevention of tax evasion and avoidance. The convention, signed on 9 September 2024, in Canberra, was ratified by the National Assembly of the Republic of Slovenia on 19 December 2024, and published in the Official Gazette on 30 December 2024.

The convention will come into effect 15 days after its publication in the Official Gazette, but it will be applicable from 1 January of the tax year following the tax year in which the signing became effective, i.e., from 1 January 2026 onwards.


THE SUPREME COURT RULED THAT THE REFUND OF INCOME TAX CANNOT BE SUBJECT TO ENFORCEMENT

In the January tax news, we also inform you about the ruling of the Supreme Court of the Republic of Slovenia regarding the refund of Income tax.

The Supreme Court of the Republic of Slovenia, in its decision II Ips 36/2024 dated 20 November 2024 considered a case of a request for the protection of legality. The request was filed by the Supreme State Prosecutor's Office in the process of garnishment against a debtor whose bank garnished her overpaid Income Tax in 2020.

The Supreme Court decided the refund of overpaid income tax advance is subject to enforcement limitations. With this, the court confirmed that the amount received by the debtor as a refund of overpaid income tax still qualifies as income from employment, for which enforcement limitations apply under Article 102 of the Enforcement and Security Act (ZIZ).



How EY can help?

At EY, we regularly monitor changes in the tax and legal fields and keep you informed. If you have any questions related to the above-mentioned novelties or their impact on your business, our team of tax and legal experts is available to assist you.








Our tax team will be happy to help you find answers to any further questions.