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Slovenia Lines Up BEPS Law And VAT Changes

Friday, October 12, 2018

The Slovenian Government has published a proposed amendment to the corporate tax law that would transpose elements of the European Union Anti-Tax Avoidance Directive (ATAD I) into domestic legislation and align national law with EU VAT requirements with respect vouchers and tax rules for small businesses.

ATAD I contains five legally binding anti-abuse measures, which all member states are required to apply against common forms of aggressive tax planning. These include an exit tax, controlled foreign company rules, a general anti-avoidance rule, limitations on interest deductions, and rules to prevent the double non-taxation of certain income.

The Slovenian proposals, published by the Government on September 28, 2018, include provisions for a general anti-avoidance rule and controlled foreign company laws that are in line with ATAD I.

Member states are required to transpose ATAD I by December 31, 2018, with the exception of the exit tax rules, which must be transposed by December 31, 2019.

The Government also approved proposals incorporating the requirements of the EU Vouchers Directive (Directive 2016/1065) into domestic law. This directive is intended to provide for common rules for the VAT treatment of vouchers. It applies to any vouchers issued on or after April 1, 2019.

In particular, the Directive sets out to reduce the risk of mismatches in national tax rules leading to double taxation, non-taxation, or other undesired consequences. This can happen where a voucher is issued in one member state and used in another, and particularly where vouchers are traded.

In addition, proposals were also approved that will alleviate the compliance burden for those rendering electronically supplied services to consumers worth less than EUR10,000 (USD11,550) in a year. This EU rule will allow businesses making cross-border sales to consumers worth less than this threshold to be subject to domestic VAT rules, rather than having to comply with other member states' tax rules in the location of the consumer. It is intended that this change will be effective in Slovenia from January 1, 2019.