Tax News, May 2023

In this issue of tax news we are informing you about the changes and amendments to the Foreigners Act, about the changed amounts of expense reimbursements and other income from employment as well as about the re-introduction of obligation to hand over the invoice.

Changes and Amendments to the Foreigners Act

We would like to inform you about the changes and amendments to the Foreigners Act (hereinafter referred to “ZTuj-2”), which will allow for faster processing of residence permit and registration certificate applications by removing some administrative barriers.

The key novelties of the Ztuj-2 amendment are:

►   The possibility of sending renewed temporary residence permits and permanent residence permits by regular post.

►   The process of changing employers or changing job positions with the same employer has been simplified. The change will be possible just with the consent of the Employment Service of Slovenia. Therefore, the administrative units will no longer need to issue written decision about the approval. 

►   Fingerprints submitted in the process of issuing the first single or residence permit can now also be used in the renewal process, as the data will be stored for five years.

►   The requirement for a written request from the administrative unit to supplement the application with fingerprints has been removed. In practice, this means that an Embassy or Consulate of the Republic of Slovenia abroad may capture two fingerprints of a foreigner without a written request from the administrative unit.

►   The administrative unit will no longer verify means of subsistence every six months. The means only need to be demonstrated with the first permit application and at each renewal.

►   The amendment does not change the requirement for knowledge of Slovenian language at the entry level (A1) for temporary residence permit extensions due to family reunification and at the basic level (A2) for permanent residence permit applications. However, an 18-month transitional period has been set for the implementation of these provisions. This means that family members and those who wish to obtain a permanent residence permit will have to submit a certificate of Slovenian language proficiency from 1 November 2024.

►   Free Slovenian language courses for all categories of foreigners are reintroduced.

Changes in the amounts of expense reimbursements and other income from employment 

In April 2023 the Ministry of Finance announced changes related to reimbursement of expenses and other income from employment, linked to the amount of last known average annual gross salary. In February, the average gross salary  (“AS”) for 2022, which amounted to EUR 2,032.92, was published in Official Gazette. Subsequently, the maximum non-taxable amounts of all income, that are linked % to the changed amount, were changed for certain payments from 24 February 2023 on.

Jubilee awards

New maximum non-taxable amounts of jubilee awards from 24 February 2023 on are:

►   for 10 years of service EUR 607.18 (30% of AS in RS)

►   for 20 years of service EUR 910.76 (40% of AS in RS)

►   for 30 years of service EUR 1,214.35 (60% of AS in RS)

►   for 40 years of service EUR 1,517.94 (75% of AS in RS)

Severance pay upon retirement

From 1 January 2023 onwards, the new maximum non-taxable amount of severance pay upon retirement amounts to 300% of last known average annual gross salary in Slovenia, calculated per month. With the recalculation of the average annual gross salary for 2022, for payments from 24 February 2023 on, the maximum amount is EUR 6,071.76.

Payments to students for compulsory practical work

From 1 January 2023 onwards, the new maximum non-taxable amount of payments to students for compulsory practical work amounts to 15% of last known average annual gross salary in Slovenia, calculated per month. With the recalculation of the average annual gross salary for 2022, for payments from 24 February 2023 on, the maximum amount is EUR 303.59.

Allowance for use of own funds

New maximum non-taxable amount of allowance for use of own tools, devices and objects from 1 January 2023 amounts to 0.2% of last known average annual gross salary in Slovenia, calculated per month. With the recalculation of the average annual gross salary for 2022, for payments from 24 February 2023 on, the maximum amount is EUR 4.05.

Re-introduction of obligation to hand over the invoice 

The National Assembly of the Republic of Slovenia adopted the Act on Amendments and Additions to the Fiscal Validation of Receipts Act (hereinafter »ZDavPR-B«), at its session on 22 March 2023, which reintroduced the obligation to hand over an invoice to the purchaser for goods purchased or services received as of 18 April 2023.

Under the ZDavPR-B, the taxable person must always give the invoice to the customer, even if the customer does not request it and regardless of the method of payment. The invoice may be given in paper or electronic form. If the customer has paid in cash, the taxable person must give the invoice to the customer before the customer leaves the seller's business premises, where the customer has paid for and taken delivery of the goods or services. The buyer's obligation is to take and retain the invoice when leaving the seller's business premises in the case of a cash payment and to present it to an authorized person of the tax or sales authority upon request.