In the March issue of the tax news, we summarize the next steps in the implementation of the second pillar of the BEPS 2.0 project.
This time we also include a short segment related to the amendment to the Value Added Tax Act (ZDDV-1) regarding the labeling of copies of paper invoices, which no longer have to be handed over to the final consumer. We also summarize criteria of the Tax Authorities for determining priority spheres of inspections for 2022.
Extended deadlines for submission of tax returns to 3 May 2022
The Slovenian National Assembly convened an extraordinary session on the 22nd of February 2022 and passed a new Act on measures to mitigate the effects of the rise in energy prices in the economy and agriculture (ZUOPDCE). The law will be published today, on 4 March 2022, in the Official Gazette of the Republic of Slovenia and will enter into force the day following its publication.
The new law stipulates that the taxpayer must submit the tax return on income from activities (DohDej) and corporate income tax (DDPO) to the tax authorities no later than 30th of April for the year of 2021. This day falls on Saturday, therefore the deadline for submission of corporate income tax return and DohDej is on Tuesday, the 3rd of May 2022.
The deadline for declaration of the assessment of the taxable base considering the standardized income is also extended until the 3rd of May 2022.
Moreover, Article 16 of the Act provides for an extension of the deadline for the submission of annual reports to AJPES, by 30th of April 2022 at the latest.
Labeling of copies of paper invoices that no longer need to be handed over to the final customer
With the amendment of the Value Added Tax Act (ZDDV-1) the taxable person is no longer obliged to hand over the paper invoice for the supply of goods and services to the final customer. However, in the case when the buyer requests the issue of a copy of the invoice, the taxpayer must issue a copy of the invoice, according to Article 6 of the Act on fiscal verification of invoices (ZDavPR).
The way of labeling issued invoice copies, does not change. Irrespective of whether the invoice is printed and handed over to the buyer immediately upon issuing or later, the first printed paper copy of the invoice is considered as an original and should not be marked. All invoices that are printed later are deemed as copies and are the same as the original and must contain the serial number of the invoice and a mark »COPY.« The first printed paper copy of the invoice should not be marked even when the invoice has not been handed over to the customer and is first printed and handed over to the inspector in the context of carrying out the control.
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OECD and EU Commission make significant next steps for implementation of BEPS 2.0. Pillar 2
On 20 December 2021, the OECD released the Pillar Two Model Rules under BEPS 2.0.
As reported in a previous edition of our Tax news, Pillar Two introduces new global minimum tax rules for multinational enterprises (MNEs) with an agreed rate of 15%. Generally, the rules apply to MNE groups with an annual revenue of €750 million or more.
The Model Rules define the scope and key mechanics for the Pillar Two system of global minimum tax rules (i.e. GLoBE rules), which includes the Income Inclusion Rule (IIR) and the Under Taxed Payments Rule (UTPR).
The timeline released in October remains unchanged, the Pillar Two rules should be brought into domestic law in 2022 to be effective in 2023, with the exception of the UTPR rule which is to enter into effect in 2024. OECD is currently also developing the model treaty provision for the Subject to Tax Rule (STTR), which is the third element of the Pillar Two global minimum tax framework, and a multilateral instrument for its implementation, which the OECD expects to release in the early part of 2022 with a public consultation event on it to be held in March 2022.
On 22 December 2021, the European Commission published a legislative proposal for a Directive setting forth rules to ensure a global minimum level of taxation for multinational groups. The proposed rules closely follow the aforementioned Model Rules with some modifications in light of EU law requirements.
The draft Directive aims at consistently implementing the Model Rules among all 27 Member States. However, it also extends its scope to large-scale purely domestic groups, in order to ensure compliance with the fundamental freedoms.
Next steps
The proposal will now move to the negotiation phase among the Member States. In the EU, the adoption of tax legislation requires unanimity between all 27 Member States. The Commission proposes that the Member States shall transpose the Directive into their national laws by 2022 for the rules to come into effect at the beginning 2023, with the exception of the UTPR, for which the application will be deferred to 2024.
How EY can help?
We are closely monitoring key developments with regard to EU and local legislation on BEPS 2.0. initiative and keeping you updated. We will continue to monitor and analyse developments with regard to new rules and their impact on our clients. Should you need additional advice with regard to upcoming changes or help with meeting your obligations, our team of tax advisors will be happy to help.
Criteria of the Tax Authorities for determining priority spheres of inspections for 2022
To ensure a higher level of tax compliance, the Financial administration of the Republic of Slovenia (FURS) decided, under the FURS Strategy 2021-2025, to prioritize key risks and encourage taxpayers to pay their obligations voluntarily.
In 2022, FURS intends to carry out majority of tax inspections in several areas, most of which will focus on the Value Added Tax (VAT) and detecting systemic VAT evasion. It will supervise inactive companies with a valid VAT ID number and taxable persons, who based on fictitious invoices unduly claim a VAT deduction and those, who based on the scope and type of activity would have to identify themselves for VAT but have not done so.
Secondly, FURS will supervise corporate income tax and tax on income from activities, where it will focus mostly on the revenue and expenditure being reported correctly, as well as claiming of tax reliefs, registrations in the register of ultimate beneficial owners and breach of restrictions in cash transactions. It will focus on the supervision of companies which cease to exist under simplified procedure and on taxable persons that sell medical equipment and accessories as well as those, who are in construction, road transport and international transport of goods. Furthermore, there will be tightened control over taxable persons, who do business in tax havens. In the context of corporate income tax, transfer prices will also be under supervision. FURS will promote compliance with the arm’s length principle, through preventive controls and questionnaires.
Thirdly, it will also focus on personal income tax sphere, where the supervision will focus on the correctness of the payroll withholding tax returns and on the accounts of social security contributions for the income arising from employment relations and the reimbursements of costs to employees.
In the customs area, they will supervise the compliance of import procedures with the EU legislation, while excise controls will be aimed at verifying the correct calculating of excise duties.
In addition, it will supervise the implementation of the received aid and the exemption of social security contributions within PKP measures. Moreover, the tax validation of invoices will be controlled, in particular the discrepancies between the value of tax-certified invoices or tax returns.
