Tax Alert July 2021 #1

AMENDMENTS TO THE DECREE ON THE TAX TREATMENT OF REIMBURSMENT OF COSTS AND OTHER INCOME FROM EMPLOYMENT (»Decree«) 

On 1 July 2021 amendments of the Decree were published in the Official Gazette of Republic of Slovenia No 104/2021. Decree is in force as of 2 July 2021

The main amendments in the Decree refer to Article 3 on reimbursement of travel expenses to and from work;

• Reimbursement of transport costs to and from work is considered as tax exempt up to EUR 0.13 for each full kilometre between habitual residence and place of work for each day present at the workplace, if the place of work is at least one kilometre away from habitual residence of the employee.

Up to now the reimbursement was tax free up to EUR 0.18 for each full kilometre.

• Irrespective of the above, in case of reimbursement of public transportation costs the cost of non-transferable monthly public transport ticket is considered tax free up to EUR 30 per month if the employee provides proof of purchase of ticket for public transportation to the employer. In case of partial presence at the work, only a proportionate part is tax exempt.
• The place of work is considered to be the place where the work is performed or begins to be performed. Habitual residence is the residence of the employee closest to the place of work. The secondary residence of the employee is usually the residence only if the employee travels from there to the place of work at least four times a week.
• For employees earning income from employment from abroad, the cost of transport to and from work is tax free up to EUR 0.18 for each full kilometre of distance between the habitual residence and place of work for each day of presence at work, if the place of work is at least one kilometre away from the employee's habitual residence.

In addition, the Decree also amends the provision of Article 12 of the Decree, which determines payments to apprentices, pupils and students. Namely, the new provision stipulates:

• Payments to apprentices for compulsory practical work are not included in the tax base of employment income according to the year of schooling up to the amounts determined as the minimum amount of the apprenticeship award by the law governing apprenticeships.