Tax News, May 2025

In the May edition of our tax news, we inform you about the recent updates regarding the residence and employment of foreigners, introduced by the amendment to the Foreigners Act (ZTuj-2I) and the amendment to the Employment, Self-Employment, and Work of Foreigners Act (ZZSDT-E), about the implementation of new excise duty rates for tobacco products and alcoholic beverages and about the new Act on Individual Investment Accounts (ZINR).

THE RECENT UPDATES REGARDING THE RESIDENCE AND EMPLOYMENT OF FOREIGNERS, INTRODUCED BY THE AMENDMENT TO THE FOREIGNERS ACT (ZTUJ-2I) AND THE AMENDMENT TO THE EMPLOYMENT, SELF-EMPLOYMENT, AND WORK OF FOREIGNERS ACT (ZZSDT-E)

We inform you about the recent updates regarding the residence and employment of foreigners, introduced by the amendment to the Foreigners Act (ZTuj-2I), which will come into effect, with certain exceptions, on 21 May 2025, and the amendment to the Employment, Self-Employment, and Work of Foreigners Act (ZZSDT-E), which will start to be implemented, with certain exceptions, thirty days after its enactment. The amendments incorporate Directive 2021/1883 into Slovenian legislation, among other provisions. Key changes introduced by these amendments include:

EU Blue Card

• The new law stipulates that the salary of an EU Blue Card holder must be at least the average Slovenian annual gross salary, calculated to a monthly amount (instead of the previous 1.5x multiplier). The minimum validity of the employment contract is reduced to six months.
• Professional experience must now be recognized as proof of high professional qualifications. A foreigner will demonstrate such qualification with at least three years of relevant work experience in the last seven years, comparable to higher education qualifications.
• Short-term mobility within EU Member States (up to 90 days within a 180-day period) will be simplified for holders of an EU Blue Card, issued in another EU member state, and no additional permits will be required. Furthermore, after 12 months of legal residence in the first Member State, long-term mobility will be possible, and the individual will be allowed to work in the new Member State even before a decision on the permit is issued.

Single permit for residence and work

• The maximum validity of the initial single permit is extended from one year to up to two years. Upon renewal, the validity may be extended from two years to up to three years.

Digital nomads

• Third-country nationals working remotely via communication technology for a business entity outside Slovenia (not registered in Slovenia's business register) will be eligible to apply for a temporary residence permit as digital nomads.
• The permit will be valid for one year and non-renewable.
• Conditions will include a valid passport, appropriate health insurance, and sufficient monthly funds for subsistence, amounting to at least twice the average monthly net salary.

Employment of foreigners who are legally residing based on a temporary residence permit that is not primarily issued for the purpose of work

• Foreigners legally residing in Slovenia for reasons other than employment may be employed before receiving a residence permit card granting access to the labor market. They will be able to begin their employment based on a valid temporary residence permit and Informativni list issued by the Employment Service of Slovenia (ZRSZ).

Family Reunification

• Foreigners in Slovenia, such as EU Blue Card holders, researchers, higher education staff, intra-corporate transferees, digital nomads, persons of Slovenian descent up to the second degree, and those with temporary protection, will be able to reunite with their family members without restrictions on the duration of residence or the validity of their permit.
• The administrative authority will issue a confirmation of submitted application to these family members, allowing them to reside in Slovenia until a final decision on the permit is issued.

New Employment Condition

• A new requirement is introduced to grant consent for the employment of foreign workers, specifically that the employer has not laid off employees for business reasons in the past six months, but there are some exceptions.

Record of employers who violate labor law regulations

• A new record of employers who have been legally penalized for violations of labor legislation is being introduced

IMPLEMENTATION OF NEW EXCISE DUTY RATES FOR TOBACCO PRODUCTS AND ALCOHOLIC BEVERAGES FROM 1 JUNE 2025

The government issued a new regulation on the determination of the excise duty for tobacco products, which will increase the excise duty for all tobacco products which will apply from 1 June 2025 onwards.

At the same time, the government issued a regulation on the determination of the excise duty for alcohol and alcoholic beverages. In light of pursuing health policy goals, the excise duty for beer, intermediate drinks, and ethyl alcohol will be increased by seven percent.

This initiative is primarily designed to support the attainment of public health goals, as articulated by the Ministry. The regulation is intended to complement the first package of tax reforms adopted last year, which was previously announced in the autumn.

From a fiscal perspective, the anticipated revenue generated from these increased excise duties is projected to contribute approximately €7.8 million annually to the state budget.

THE NATIONAL ASSEMBLY  ADOPTED THE ACT ON INDIVIDUAL INVESTMENT ACCOUNTS (ZINR)

The National Assembly adopted the Act on Individual Investment Accounts (ZINR) on 27 May 2025. It shall enter into force the day after its publication in the Official Gazette of the Republic of Slovenia, and it shall apply nine months after its entry into force.  The new Act introduces a special kind of an investment account and includes a more favorable administrative and tax treatment of income earned through investments in such accounts.

The INR will be available to individuals who are tax residents of Slovenia and can only be opened once. In the first year, the account holders will be able to invest up to EUR 20,000, and after the first year, a maximum of EUR 5,000 annually (with an option of additional EUR 5,000 if they will be invested into financial instruments issued by Slovenian entities), with a total contribution limit of EUR 150,000. Key advantages include simplified tax procedures, more favorable tax treatment, and flexibility in managing investments.

Income from the INR will be taxed at a rate of 15 percent, with a tax exemption on the first withdrawal after 15 years, if no withdrawals are made in the meantime. The proposal also includes provisions regarding contracts, disclosure of costs, and oversight of providers, with the ATVP maintaining a register of providers and Financial Administration keeping a register of INR holders.