Category: Slovenia

Prioritizing defense, tax reforms, and anticipated tariffs are at the top of the agenda in Slovenia, according to ODI Law Partner Tine Misic, who reports the country is looking to upgrade its railway infrastructure and nuclear power plant in Krsko.

“The pace of change globally is staggering, and Slovenia, like the rest of the EU, is feeling the impact of these shifts,” Misic begins. “One major development is the increasing prioritization of defense at the EU level, which Slovenia will inevitably take part in. We have already seen some acquisition announcements by the government, and we expect the Prime Minister to outline further strategic priorities. The defense budget is increasing, and this will undoubtedly affect the national economy,” he says.

“At the same time, we are witnessing a notable discrepancy in the recent global regulatory trends,” Misic continues. “Over the past couple of years, law firms, locally and EU-wide, have been intensely focused on adapting to new AML regulations, following in the footsteps of the banking and financial compliance trends. However, the recent decision of the US Treasury Department to cease applying AML regulations may see the US start attracting more EU-based private equity, with Slovenia likely to be less affected, though, given its smaller PE base,” he explains.

As for other local regulatory developments of note, Misic points out that there are several tax reforms in the works, with a VAT reform currently underway. “Additionally, real estate tax reform has sparked a very lively debate. While there is recognition that tax burdens on labor and employment need to be reduced to make the job market more attractive, it remains to be seen whether the government will be biting the sour apple given the early pre-election period, historically never an ideal time to introduce major tax overhauls,” he says.

From a trade and industry standpoint, Misic believes that anticipated tariffs may visibly affect Slovenia’s export market, one of the strongest drivers of the local economy in the past two decades, particularly the steel and manufacturing sectors. “That being said, the economy remains in a strong position, with GDP per capita growing steadily – a 2% increase is forecasted for this year, aligning with external assessments.”

Taking aim at large-scale projects, Misic reports that Slovenia is actively investing in major infrastructure projects, particularly in the railway sector. “Along with the several substantial country-wise upgrades of the existing railway infrastructure, a new Ljubljana railway passenger terminal, including retail and business infrastructure, is under construction, marking a significant joint PE/government-driven investment. Crucially, he points to one of the largest projects in Slovenian history – “the upgrade of the nuclear power plant in Krsko. While still in its early stages, three potential bidders have been shortlisted.” Additionally, he reports that green energy investments are increasing, particularly in solar power production.

Finally, reporting on the most attractive sectors in the country, Misic says that “health and life sciences have been attracting significant foreign investment.” Additionally, he indicates that “the SME market is active, with many long-established companies now seeing their founders pursue exit opportunities.” Misic concludes by adding that “business infrastructure and commercial real estate have been on the rise over the past few years, which is a notable shift compared to previous trends. Residential real estate investments have remained steady, with demand holding at similar levels.”

Selih & Partnerji has advised Plastiflex Group on the acquisition of TIK from Batagel & Co. Lukman advised the sellers.

Plastiflex develops advanced tubing systems for medical and industrial applications.

TIK is a Slovenian medical device producer. 

The Selih & Partnerji team included Partner Jera Majzelj, Senior Associates Miha Hocevar, Lidija Zupancic, Gregor Novljan, Blaz Murko, and Domen Kavka, and Associates Marusa Juhant, Eva Novak, and Veronika Novak.

The Lukman team included Senior Partners Sanda Juznik and Tomaz Lukman.

Rojs, Peljhan, Prelesnik & Partners has advised Unior Group on the sale of Unitur Hotels & Resorts to Advance Capital Partners. Fatur Menard advised Advance Capital Partners.

Unior Group is a Slovenian tourism company.

The Rojs, Peljhan, Prelesnik & Partners team included Senior Partner Grega Peljhan and Senior Associate Joze Stare.

The Fatur Menard team included Managing Partner Maja Menard, Partner Lovro Jurgec, Counsel Helena Belina Djalil, and Senior Associate Martin Carni.

Ketler & Partners, a member of Karanovic, has advised Hocevar on the sale of the Lambergh Chateau & Hotel in Radovljica, Slovenia, to Orthos Nepremicnine.

The Ketler & Partners team included Partner Igor Angelovski and Senior Associate Mojca Zupancic Kovacic.

Ketler & Partners could not provide additional information on the matter.

Rojs, Peljhan, Prelesnik & Partners has promoted Polona Fink to Partner.

Fink is part of the Employment Law and Data Privacy Department at Rojs, Peljhan, Prelesnik & Partners.

She has been with the firm since 2017 when she joined as an Associate. She became a Senior Associate in 2018. Earlier, she worked for the Chamber of Commerce and Industry of Slovenia between 2010 and 2017.

Former Skupina Zito Director of Legal Affairs and General Services Tamara Mohoric Selak has joined LON as its new Head of Compliance.

LON is a banking, personal banking, and finance company located in Kranj, Slovenia.

Before the move, Mohoric Selak was with Skupina Zito between 2024 and 2025. Earlier, she was with Lidl Slovenija as its Compliance and Personal Data Office between 2013 and 2018, Legal & Compliance Consultant between 2018 and 2024, and finally as its Data Protection Office and Compliance Consultant in 2024. Earlier still, she was a Manager with MojaDekca.si between 2018 and 2021 and a Legal Advisor with the Ministry of Finance of the Republic of Slovenia between 2011 and 2013.

Originally reported by CEE In-House Matters.

In this article, we highlight the most relevant changes to Slovenia’s tax laws, from the perspective of corporate income tax, VAT, personal income tax and tax procedure that enter into force on 1 January 2025.

1. Changes in the Corporate Income Tax Act

Carry forward of tax losses

The ability to carry forward tax losses is no longer unlimited. The amendment introduces a time limitation on the possibility of utilising tax losses to 5 tax periods, with a transitional period of 5 tax periods for claiming unused losses from tax periods that began before the adopted act’s application.

Tax relief for investments in digital and green transition

Companies and entrepreneurs will be able to claim the digital and green transition allowance in five tax periods following the investment period, instead of only in the current year. The new rule will apply to investments made after 1 January 2025.

Limitation rule on deductibility of interest

The thin capitalisation rule, which defines interest on excess loans exceeding a capital-to-debt ratio of 1:4 as non-tax deductible, is abolished. For tax purposes, interest expenses are limited to 30% of EBITDA or to an absolute threshold for recognising excess borrowing costs, which the amendment increases to EUR 3 million.

2. Changes in the Tax Procedure Act

Expanding the obligations of the employer as the payer of tax

The amendment also defines the employer of the recipient of employment income as the taxpayer under the law governing employment relationships, even if the employer is not charged with the employment income, provided that the person charged with the income is not a taxpayer and the income tax is calculated by means of withholding tax in accordance with the law governing tax procedure or the law o

It is provided that a non-resident of the Republic of Slovenia who, in accordance with the law on taxation, has a non-resident establishment in the Republic of Slovenia or, in accordance with the regulations governing the establishment and operation of a business in the Republic of Slovenia, has a branch in the Republic of Slovenia, shall also be deemed to be an employer under the same conditions under this point.

Meaning, the amendment of the law determines that entities that formally employ an employee will have to report to the tax authority all earnings that the worker would receive in the context of employment (also, for example, income from a foreign company), in the tax withholding calculation.

Automatic data provision in cases of innovative start-up companies

Employers of innovative start-up companies will have to submit to the tax authority, on an annual basis, the data necessary for the collection of tax from the income of employees who have received options to purchase shares or interests or income in the form of shares or interests.

Provisions on the limitation period

The provisions on the limitation period are amended. In the case of tax assessment on the basis of a return, the limitation period begins with respect to the day on which the tax should have been declared. The limitation period of the right to a refund of VAT surplus is set at five years from the submission of the VAT return in which the VAT surplus was established.

Issue binding information

A shorter time limit is set for the tax authority to issue binding information, i.e. within three months of receipt of a complete application.

Deadline for submitting comments on the minutes

The deadline for submitting comments on the minutes of the tax authorities issued after the tax audit procedure is completed is extended to 30 days from the date of service of the minutes of the tax audit.

3. Changes in the Value Added Tax Act

Reporting and accounting

The obligation to keep records in the taxable persons accounting on the charged VAT and the record of deducted VAT is introduced and the obligation to report the information from both records to the tax authority.

The carry-forward of VAT surplus to the next tax periods and the possibility to claim a refund of VAT surplus will be limited to a period of 5 years from the date of submission of the VAT return.

Special scheme for small businesses

The amendment implements provisions of the 2020/285/EU Directive regarding special arrangements for small taxable persons. It increases the annual turnover threshold for small taxable persons for compulsory VAT identification in Slovenia from EUR 50,000 to EUR 60,000. It applies to small businesses in the EU territory.

According to the amendment, the right to exemption from VAT is enforced on cross-border supplies of goods and services in another EU member state, which in its national VAT regulations allows exemption for small businesses. Eligibility for the exemption is provided if the turnover does not exceed the amount determined by that Member State, with the absolute threshold set at EUR 100,000.

Adjustment of taxation on sugary drinks

Instead of a lower VAT rate of 9.5%, sugary drinks will be subject to the standard VAT rate of 22%.

VAT Grouping

Introduction of VAT groups of related members seated in Slovenia or having headquarters and fixed establishment in Slovenia, meaning that several entities within the group could have one VAT number.

The scheme is expected to apply from 1 January 2026. 

Issuance of invoices at vending machines

Exemption from invoice issuing obligation for all types of vending machines. Issuing the invoice will not be mandatory anymore, but data on sales will still have to be reported to the tax authority. 

4. Changes in the Personal Income Tax Act

New allowance for new tax residents

The new allowance allows them to qualify for a 7% reduction in income tax on the salary they receive. The reduction is allowed for a maximum period of five consecutive tax years.

The conditions that must be met are:

1. they are a tax resident of Slovenia
2. prior to starting work in Slovenia, this person was not a tax resident of Slovenia and did not receive employment or business income from a source in Slovenia,
3. not yet 40 years of age at the start of the work in Slovenia,
4. the salary guaranteed in the employment contract is at least 2 times the last known average annual salary of employed persons in Slovenia
5. is employed in Slovenia for at least 10 months in a tax year with an employer who is a tax resident of Slovenia or a non-resident (which has a non-resident business unit in Slovenia in accordance with the laws on taxation or has a branch in Slovenia), if the salary is considered a deductible item in the calculation of the employer’s tax base in Slovenia

Benefit in kind from equity plans

For income received from shares of a company, the general rule of grossing up income may be waived, if the beneficial treatment from paragraphs 6, 7 and 8 of Article 43 of the Personal Income Tax Act is not applied and if the employer properly notifies the Tax authorities through a payroll tax return.

The ownership structure of innovative start-up companies

For income of the employees of the start-up companies received from benefits in the form of shares of the company, the taxable point is changed to the moment of disposal of these shares or other events (e.g. termination of the employment contract, restructuring of the employer). For the purpose of determining the amount of this income, the principle of “averaging” will be considered.

Benefits for the private use of the company’s electric car

The benefit for private use of a company electric motor vehicle is set at 0.75% of the purchase value of the vehicle per month, with a transitional period of zero benefit until the end of 2029.

Benefit in the form of bikes or e-bikes and electric charging

The provision of electricity to the employee to charge the employee’s personal vehicle at the employer’s non-commercial charging stations and the use of employer-owned bicycles (whether electric or not) will no longer be considered an employee benefit.

Standardized sole proprietors

The highest allowed limit for participation in the system for full standardised sole proprietors is reduced from EUR 100,000 to EUR 60,000 of annual income if that taxable person was compulsorily insured on the basis of self-employment for full-time uninterrupted at least nine months. For afternoon sole proprietors, this limit is reduced from EUR 50,000 to EUR 30,000.

Standardised sole proprietors will be able to claim 80% standardised expenses for revenues up to EUR 60,000, while for afternoon sole proprietors, up to EUR 12,500 will be recognised at 80%, and from EUR 12,500 to EUR 30,000 at 40%.

The sole proprietor will be required to exit from standardised expenses scheme if, the average of the two consecutive years’ revenue of EUR 60 000 or EUR 30 000 is exceeded, depending on the condition of the taxable person’s inclusion in insurance. A transitional period until the end of 2026 applies to the implementation of the changes.

The carry-forward of tax losses in the future tax periods (which is unlimited under the current system) is limited to the next five tax periods.

An unused portion of the digital and green transition investment allowance can be carried forward to the next five tax periods.

The information in this document does not constitute legal advice on any particular matter and is provided for general informational purposes only.

By Igor Angelovski, Partner, and Marusa Pozvek, Tax Law Expert, Ketler & Partners, member of Karanovic & Partners

As 2024 wraps up, Slovenia is thriving with growth in IT, healthcare, real estate, and renewables, according to Kavcic, Bracun & Partners Partner Aleksandra Mitic, who notes that despite external challenges, optimism is high and key projects and investments are setting the stage for an exciting year ahead.

“As the year draws to a close, activity across several sectors has surged,” Mitic explains. “In the IT and healthcare industries, businesses are actively seeking investors, driving a wave of small transactions and rapid growth. Private investments in healthcare are particularly trending, reflecting increased interest in the sector. Despite challenges from neighboring Germany’s automotive sector, which has ties to Slovenia’s economy, the overall outlook remains positive.”

Real estate also remains a strong performer, according to Mitic, “with numerous residential projects underway. Recently, there’s been a notable focus on developing business premises. However, with so many new spaces available, renting them out has become a challenge.” One of the most significant developments this year, she emphasizes, “has been the redevelopment of Ljubljana’s main railway and bus station area. This large-scale project includes business spaces, hotels, and other infrastructure, signaling a pivotal moment for real estate in the area. The city has plenty of room for further development, and current investments seem to be creating momentum for future growth. While some projects faced delays in previous years, construction is now in full swing.”

Mitic highlights that the renewable energy sector has also been gaining traction with ESG considerations becoming a central focus. “The government is actively promoting clean energy projects, including solar, rooftop, and hydropower developments. Political delays have stalled plans for a new nuclear power plant, but smaller-scale renewable initiatives are progressing steadily,” she says. “At the same time, the energy sector is experiencing significant consolidation, creating new opportunities for growth and collaboration.”

Mitic also draws attention to the developments in competition law. “The competition agency has been highly active over the past few months, tackling antitrust cases and encouraging settlements,” she notes. “For instance, a recent case was resolved with a EUR 1 million fine. The agency seems determined to catch up with neighboring countries, addressing older cases and streamlining merger clearances. Using settlements could be a practical way to resolve cases before the agency for the companies.”

Another key area of focus for law firms, according to Mitic, has been compliance with AML regulations. “Law firms are under scrutiny to ensure adherence to KYC requirements, with the bar association overseeing these efforts,” she says. “As changes to AML regulations are discussed at the EU level next year, firms must stay vigilant in understanding their clients and their business activities.”

Lastly, Mitic adds that Slovenia’s legal market has seen new entrants. “The country is becoming an attractive entry point for Eastern and Central European companies, many of which prefer a single legal partner to handle multiple jurisdictions,” she explains. “This trend has led to increased collaboration between Slovenian firms and counterparts in Austria and the Czech Republic. While the market traditionally had only a few international firms, new partnerships are reshaping the landscape, creating a sense of energy and opportunity as the year ends.”

On December 2, the Slovenian office of Peterka & Partners opened its doors in Ljubljana with Senior Associate Pia Florjancic Pozeg Vancas leading the new office.

“Our expansion into Slovenia is an important step for us as we continue to grow and enhance our presence in the CEE region,” commented Founder and Managing Partner Ondrej Peterka. “We are committed to providing our clients with high-quality legal services across the entire CEE region and we believe that our new office in Ljubljana will help us achieve this goal.”

Before joining Peterka & Partners to helm the Ljubljana office, Florjancic Pozeg Vancas was with Bohl as a Junior Associate between 2018 and 2021, a Candidate Attorney at Law between 2021 and 2023, and an Attorney at Law between 2023 and 2024.

“I am thrilled to be leading the Peterka & Partners new office in Ljubljana,” Florjancic Pozeg Vancas added. “We are excited to be able to increase the regional synergies within the Peterka & Partners group and to provide our clients with the best possible legal advice and solutions.”

The Ljubljana office of Peterka & Partners comes a year and a half after the firm opened up for business in Zagreb, in 2023 (as reported by CEE Legal Matters on April 14, 2023).

Slovenia’s real estate market is thriving, with robust foreign and domestic investments. Key legal and industrial shifts such as new work-life balance laws and reforms in the energy and healthcare sectors are reshaping its economic landscape, according to Krizanec & Partners Partner Dinar Rahmatullin.

“The real estate market in Slovenia is currently very dynamic, encompassing a broad range of deals that span from smaller investments to significant transactions,” Rahmatullin says. “These involve both commercial and residential properties, and publicly available data shows that most of the investment activity, particularly for larger deals, is centered in Ljubljana. Transactions include existing buildings, as well as new developments. Notably, Slovenia’s largest real estate projects are heavily backed by foreign investment, primarily from Slovak, Czech, Hungarian, and recently Ukrainian investors, although domestic interest remains strong as well. This level of activity reflects solid confidence in the Slovenian market.”

A significant legal development that’s generating buzz at the moment in Slovenia, according to Rahmatullin, is the “recent amendment to Slovenia’s Employment Relationships Act, adopted last year. This amendment is related to the right to disconnect, which requires employers to respect employees’ free time and avoid interrupting them during non-working hours, whether on vacation, during sick leave, or otherwise,” he notes. “Slovenian employers have until November 16 to implement these measures effectively, not just on paper but in practice. Slovenia has been at the forefront of work-life balance initiatives, making these changes highly relevant to employment and HR discussions.”

In the litigation sphere, “consumer protection remains a key focus for Slovenia’s legal community,” Rahmatullin points out. “Ongoing lawsuits related to Swiss franc loans and ‘zero-floor clauses’ are generating significant attention.” He adds that recently “Slovenia witnessed its largest compensation claim in history, valued at EUR 78 million against the former management of Adria Airways. This landmark case is anticipated to impact Slovenian case law significantly and bring into focus issues of corporate liability.”

Looking at industry sectors, Rahmatullin highlights that three areas stand out: energy, automotive, and healthcare. “Slovenia’s energy sector is undergoing a transformative period, with a shift toward renewable energy sources, debates on nuclear power operations, and interest in hydroelectric projects and energy storage solutions. While the government has introduced new policies aimed at sustainability, some have been criticized as impractical, and the effectiveness of these policies will require close monitoring into 2025.”

In the automotive sector, Rahmatullin says “challenges persist, with recent announcements of German factory closures expected to accelerate the ongoing crisis. Given that the automotive industry contributes around 10% of Slovenia’s GDP, the economic impact of these closures and the anticipated layoffs could be profound.”

Finally, Rahmatullin draws attention to healthcare as another sector experiencing reform. “The government’s goal is to create a universally accessible public healthcare system and improve working conditions for healthcare professionals,” he explains. “From a legal perspective, the reforms touch on fundamental rights, and it’s critical to resolve issues related to workforce shortages, accountability, wage disparities, and compliance standards. With an approaching imminent need for reform, the question remains how effectively Slovenia will implement these changes.” Additionally, “there are upcoming regulatory updates concerning employees working across both public and private healthcare sectors, which will need to be addressed thoroughly,” Rahmatullin concludes.