Features of taxation in Slovenia

Features of buying a home by foreigners

Any foreigner wishing to purchase real estate in Slovenia can make a purchase only by registering it with a legal entity. It sounds complicated, but the registration procedure is quite simple and takes a couple of days. About a week after submitting all documents and obtaining a tax number, the company can already start its work and acquire real estate. To carry out this procedure, you must have a passport and an amount of 7,500 euros - it will be needed to open a bank account as the minimum authorized capital, which can later be used to purchase real estate. The company can be entered in the register within 4 days. True, the opening of a permanent current account in the bank for the implementation of the company's activities takes place within 2 weeks .

The procedure for opening a legal entity is carried out by Slovenian law offices, which provide support for a foreign investor by a qualified lawyer throughout the entire process. It is best to look for such offices through real estate companies that have been working in partnership with Slovenian lawyers for many years. The cost of such a service is usually 2,500 euros. If you resort to the services separately, the work of a court translator (documents must be drawn up in Slovenian) and a notary, as well as paying taxes, will cost 1000 euros, but with this approach you will have to look for specialists on your own.

Land tax

And so far in Slovenia there is no real estate tax, it is only on land, therefore it is present for all objects and depends on the purpose of the land. The tax on the use of land under the building - nadomestilo za uporabo stavbnega zemljia - is calculated individually, depending on the area, the area of the house and the rates adopted in the community. For example, on land designated for agriculture, it is small. Such lands are taxed depending on the products they produce, but this is a whole section that requires a special approach and is calculated individually for the type of activity.

This tax is paid once a year or divided into several payments. For example, the tax on an apartment of 140 square meters in a townhouse located 25 km from the center of Ljubljana (that is, it is already a suburb of the capital of Slovenia) is about 76-100 euros per year. During construction, certain taxes are also paid on the use of land and the connection of the building to the infrastructure - this is a separate calculation that is carried out based on a specific construction project.

In Slovenia, if an individual sells real estate, the seller pays a 2% tax. The individual seller also pays income tax, which in Slovenia is 25% and is reduced by 5% every 5 years. The tax is paid once a year for all income acquired by an individual in addition to salary (the so-called additional income, as well as all deductions, expenses, etc. An individual does not pay tax on income from the sale of real estate if this object was registered as a permanent residence for 3 years continuously.

When selling real estate by legal entities, as well as when selling new buildings, the law obliges sellers of legal entities (VAT payers) to pay VAT on the sold real estate, which is usually 9.5%, or 22%. Therefore, legal entities (VAT payers) sell new buildings, as well as other real estate that they own, including VAT. In this case, the buyer pays the cost of the object + VAT (the seller pays this part to the state). But the seller as a legal entity does not always have to pay VAT - there may be schemes in which the seller (legal entity) pays a tax rate of 2%. The taxation issue is quite complex and therefore, for every sale carried out by a legal entity, the tax rate must be confirmed by a specialist in taxation.

What taxes will a property owner face in Slovenia?

• Corporate income tax
• Dividend tax - if you are going to pay them or if the possibilities of returning the founder's loan have been exhausted
• Payroll tax if a residence permit is issued

Requirements for a legal entity in Slovenia

• The minimum wage must exceed 800 euros (net)
• Pay net income tax of 19%
• Hand over the annual balance
• Pay advance income tax

Profit tax and land tax are paid once. These taxes are paid regularly and their amount depends on the chosen taxation system. To work under the simplified system, it is necessary to have a turnover of up to 50,000 euros for 1 year of work, and after the expiration of this line with the condition of employment of 1 employee in the company's staff, a turnover of up to 100,000 euros is already allowed, but it will already be necessary to obtain taxpayer status. Under the simplified system, a tax of 4% of the company's turnover is paid. Thus, Slovenia is in the top 3 countries with the lowest taxes in Europe.

The main difference between the taxation of Slovenia

Advance income tax from a limited liability company in Russia is calculated based on the profit from the previous quarter and is paid every 3 months, while in Slovenia the tax is calculated based on the results of the last year and is paid either monthly or once every 3 months. Since Slovenia is a member of the European Union, the general taxation procedure in the country is similar to other EU member states. Slovenian experts do not recommend inventing any schemes to reduce taxation, since the procedure for calculating tax and tracking its payment in the country is established at a very high level. Failure to pay any of the taxes will entail heavy fines, as well as the impossibility of extending the residence permit for the owner of the legal entity. Therefore, it is recommended to strictly comply with the law and to consult specialists in order to avoid mistakes.

Credit issue

When purchasing real estate, the buyer is often faced with bank loans. In the case of buying real estate in Slovenia, it is important to know the following: for new companies that were established in Slovenia less than 3 years ago, and companies that have a negative balance, it is extremely difficult or almost impossible to obtain a loan or mortgage from banks in Slovenia to purchase real estate. However, if the company complies with all the established rules, then the loan will be issued with favorable conditions - here the bank is an additional guarantor that the acquired object is not overpriced and is liquid, since the bank conducts its own assessment and verification of the asset.

Thank you for your help in preparing the material:

Olga Sluchanko, a licensed realtor of the real estate agency Roni nepreminine doo

Vladimir Uvarov, Director of the Representative Office in Russia of Future Real Estate

Tatiana Mkrtychyan, Director of Galinvest