EY Law Alert, August 2023

Slovenian Government adopts Draft Act Determining Intervention Measures for Flood and Landslide Recovery of August 2023

On 24 August 2023, the Government of the Republic of Slovenia adopted the Draft Act Determining Intervention Measures for Flood and Landslide Recovery of August 2023 (hereinafter: the "Draft") and submitted it to the National Assembly under the urgent legislative procedure. The National Assembly is expected to take a decision on the Draft at an extraordinary session on Thursday, 31 August 2023.

The Draft act includes, among others, the following measures:

• lower VAT rate for the supply of firefighting equipment normally intended for use in interventions;
• establishment of the Fund for the Reconstruction of Slovenia;
• solidarity Saturday or obligatory solidarity contribution, which for natural persons would amount to 0.3% of the annual tax base according to the Personal Income Tax Act, while for legal persons it would amount to 0.8% of the income tax base according to the Corporate Income Tax Act, before reduction to cover losses and allowances;
• ensuring a more favorable tax treatment for persons who, as a result of serious damage to their personal property, have been forced to find new or temporary accommodation, and for legal persons and sole traders who provide such persons with accommodation;
• preventing taxable persons affected by floods or landslides from suffering further tax disadvantages by losing the tax relief already used in such a way as to increase the tax base and, consequently, the tax during the period of devastation;
• the possibility for municipalities to waive their building land use allowance revenues in favor of taxpayers for properties that have been severely damaged in the 2023 floods;
• tax relief for farmers due to land damage;
• a reduction in the condition linked to the drop in net sales revenue for self-employment aid;
• volunteer fire brigades operating in municipalities affected by floods and landslides may collect and distribute financial and other resources to individuals affected by floods and landslides, without the recipients having to pay income tax on such resources;
• for the purpose of rectifying the consequences of floods as quickly as possible, the provisions on environmental impact assessment will not apply, by way of derogation from the Environmental Protection Act;
• the possibility of deferring payments on bank loans for up to 12 months;
• the possibility of deferring payments on consumer credit for up to 24 months;
• the possibility for employers exceeding the quota of employees with disabilities, social enterprises and employment centers to use public funds also for the restoration of flood and landslide damage;
• speeding up procedures related to the recruitment and commencement of work of foreign workers in professions that are already in short supply on the labor market and are urgently needed to eliminate the consequences of the floods.

As mentioned, the Draft act will be subject to discussion and adoption by the National Assembly. Therefore, subsequent amendments and additions to the proposed solutions are possible during the debate and the adoption process. In order to avoid misinformation or incomplete information, we will inform you again and in more detail about all key measures that will be implemented with the adopted act.