Tax News, November 2023

In the November tax news, we inform you about changes of Foreigners Act (Ztuj-2), which will soon come into force, about the amended REK-0 form, which contains a new mandatory health contribution, about the inclusion of two new countries on the list of risky countries for money laundering and terrorist financing and the current status of legislative proposal for Minimum Tax Act.

AMENDED FOREIGNERS ACT (ZTUJ-2)

In the November edition of Tax news, we inform you about changes to the Foreigners Act (Ztuj-2), which will introduce requirement for knowledge of Slovenian language. The language conditions will apply to adult foreigners renewing a temporary residence permit for the purpose of family reunification and, as of November next year, to foreigners in the process of obtaining a permanent residence permit. In cases where an adult foreigner is enrolled in a Slovene educational program, is over 60 years of age or is illiterate but able to communicate in Slovene, the individual will be considered to meet the language requirement.

1. Temporary Residence Permit Extension for family members:

• Applications submitted until 30 April 2024 will not require a language requirement
  
• For applications submitted between 1 May and 31 October 2024, family members will also need to provide a certificate of enrolment in informal educational programs for learning the Slovenian language or a certificate of successfully passing an exam in Slovenian at least at the entry level
• After 1 November 2024, family members will need to submit a certificate of passing an exam in Slovenian at the survival level, which enables basic communication in the Slovenian language, limited to simple, predictable, everyday situations where expression is routine and repetitive
• The criteria for the new educational program and the survival-level language test will be determined by the Minister of Education

Some of the exceptions to which the above does not apply:

• Family members of EU Blue Card holders
• Family members of foreigners with temporary residence permits for research, higher education, or vocational education
• Family members of foreigners who are holders o fan Inter-corporate transfer (ICT) permit with a single permit who are transferred within a company
• Family members of foreigners who cannot take the exam due to health issues

2. Permanent Residence Permits (From 1 November 2024):

• A foreigner must demonstrate language proficiency with a language certificate at the basic level A2
  

Exceptions apply to:

• Foreigners who are granted permanent residence before five years of continuous legal residence
• Foreigners for whom health issues hinder everyday communication

AMENDED CONTENT OF REK-O FORM

The amendment of the form is relevant for taxable persons who are taxable persons and who pay income on which withholding tax and/or social security contributions are levied.

The amendment to the law introduces the amended content of the REK-O form, which contains a new compulsory health contribution.  Taxpayers will therefore have to use the new annexes when calculating withholding taxes, which will be valid for the first time for accounting periods starting from 1 January 2024.

The new attachments will thus replace the existing Attachment 1, Attachment 2, Attachment 3, Attachment 5, Attachment 6, Attachment 9 and Attachment 10 of the Regulation on the forms for the calculation of social security contributions, which will be in force until the end of the year.

The new Regulation is published in the Official Gazette of the Republic of Slovenia, No. 103/23 of 6.10.2023, where you can read more about it.

NEW LIST OF COUNTRIES AT RISK OF MONEY LAUNDERING OR TERRORIST FINANCING

On 18 October 2023, the Office for Money Laundering Prevention of the Republic of Slovenia published an updated list of countries at a high or increased risk of money laundering or terrorist financing.

The list can be found at the following link - Prevention of money laundering | GOV.SI

Compared to the August edition, Cameroon and Vietnam have been added to the list of high-risk countries, as they were assessed under the Delegated Regulation (EU) 2023/2070.

LEGISLATIVE PROPOSAL FOR MINIMUM TAX ACT

The legislative proposal for the Minimum Tax Act was sent in for consideration to the Government of the Republic of Slovenia on 30 October 2023.

In the June issue of Tax News, we discussed new developments in the field of international corporate taxation with respect to the Minimum Tax Directive. On 23 June 2023, the Government of the Republic of Slovenia published a Proposal for the Minimum Tax Act, and the Ministry of Finance of the Republic of Slovenia was accepting comments about the proposal from the expert public until 16 July 2023.

The proposal of the Act which is currently under government consideration does not contain any amendments or changes compared to the original proposal. This may suggest that that the version of the proposal that is currently under government consideration is not yet final, which is also evident from article 69. of the proposal itself, which states that two more articles will be added, namely an article on the use of chosen options and an article which will serve as the basis for the issuance of statutory regulation for more detailed implementation. At this point, it is not clear at what stage the Act proposal will be finalized, while the deadline for the implementation based on the Directive is 31 December 2023.