Slovenia

  1. A. Transfer pricing documentation requirement
    1. In your jurisdiction, are taxpayers obliged to maintain transfer pricing documentation? Does this obligation apply to all taxpayers, or only to certain categories (e.g. taxpayers with turnover or assets exceeding a particular threshold)?
    2. What is the content of the documentation that must be prepared?
  2. The local provisions on transfer pricing documentation follow the EU TPD.
    1. What is the deadline or timescale for providing transfer pricing documentation to the tax authorities (is it to be provided for example upon filing of the tax returns, at the beginning of a tax audit, or on the specific request of the tax authorities)?
    2. In the event that the documentation is not provided within the applicable timescale, or is incomplete, do documentation-related penalties apply in your jurisdiction? If so, please detail the penalties and the circumstances in which they do and do not apply.
    3. Does the absence or incompleteness of documentation reverse the burden of proof as regards the arm’s length character of the transactions?
    4. In the event that the tax authorities (i) impose documentation-related penalties and (ii) make a transfer pricing reassessment, does the imposition of documentation-related penalties prevent the taxpayer from initiating any mutual agreement procedure which may be contained in an applicable tax treaty (or, for EU countries, the procedure contained in the EU Arbitration Convention) with a view to eliminating any double taxation resulting from the transfer pricing reassessment?
    5. Any other relevant aspect not addressed above?
  3. B. Country-by-Country reporting (“CbCR”)
    1. Did your jurisdiction implement the obligation to file a CbCR? If not, is the introduction of the CbCR in your jurisdiction contemplated and, if so, when?
    2. If the obligation to file a CbCR is in force, what is the tax year from which this obligation applies and what is the deadline for filing the CbCR?
    3. Which taxpayers have to file a CbCR in your jurisdiction?
    4. Is the content of the CbCR fully in line with the OECD model (final report on Action 13 of the BEPS project)? If not, what are the differences?
    5. What is the penalty for failing to file the CbCR on time? Can local subsidiaries of a foreign group suffer the local penalty if the foreign group has not filed the CbCR?
    6. Are there tax treaties in force in your jurisdiction allowing the communication of CbCR with other jurisdictions?
    7. Any other relevant aspect not addressed above?
  4. C. As the case may be, other documentation / filing requirement in relation to transfer pricing?
    1. In your jurisdiction, are there any other documentation / filing requirements in relation to transfer pricing?
    2. If so, what is the content of such documentation / filing requirement? What language(s) are to be used by taxpayers?
    3. What is the deadline for meeting this documentation / filing requirement?
    4. Does this obligation apply to all taxpayers, or only to certain categories (e.g. taxpayers with turnover or assets exceeding a particular threshold)?
    5. What is the penalty for failing to meet this requirement on time?
    6. Any other relevant aspect not addressed above?

A. Transfer pricing documentation requirement

1. In your jurisdiction, are taxpayers obliged to maintain transfer pricing documentation? Does this obligation apply to all taxpayers, or only to certain categories (e.g. taxpayers with turnover or assets exceeding a particular threshold)?

All taxpayers engaged in transactions with related parties must maintain information about related parties; the types and extent of their business transactions with these entities, and the determination of comparable market prices, following the master file/local file documentation approach, as prescribed by the Slovenian Tax Procedure Act.

2. What is the content of the documentation that must be prepared?

The Slovenian transfer pricing documentation requirements are based on the master file and country specific file concept as recommended by the European Community (EC) Council, as well as the EU Joint Transfer Pricing Forum.

The master file should include documentation common to the whole group. It may be prepared by the group’s headquarters and should include a general description of the way business is conducted by the group companies. The file should include the following:

  • A description of the business activities and business strategies, including any general economic and other factors, an assessment of the competitive environment, etc.
  • A description of the taxable person,
  • A description of the global organizational structure of the group and types of relationships (capital, contractual, partnership),
  • A description of the transfer pricing system.

As in the Master file, the local documentation should describe the company’s course of business but on a local level. The country-specific documentation should normally include:

  • A description of transactions between affiliated persons (description, type, value, deadlines and other conditions),
  • Comparability analysis including:
  • A functional analysis determining the main functions performed by the tax payer and outlining which adjustments may need to be made in relation to comparable situations,
  • Contractual conditions,
  • Economic and other circumstances that affect the transaction,
  • A description of business strategies,
  • Other factors, important for performance of transaction,
  • A description of the method applied for establishing the arm’s length price.
  • Any other information that might be relevant from the transfer pricing perspective should also be included in the documentation.
a) Which transactions must be documented (all transactions with associated enterprises, or only those which exceed a particular threshold)?

All transactions must be documented, i.e., there is no applicable threshold.

b) What is the definition of “associated enterprises” for the purposes of this requirement (in particular, are transactions between a permanent establishment and its head office in the scope of the documentation requirement)?

The legal provisions are different for domestic related parties and cross-border related parties (please see below). The main difference between the documentary requirements between the two is that for cross-border transactions the taxpayer needs to ensure to have the transfer pricing documentation available at all times whereas for domestic transactions, the tax payer needs to submit the transfer pricing documentation only if requested by the tax authorities during an audit.

Permanent establishments are, for tax purposes, viewed as standalone entities, hence the same rules apply.

Cross-border controlled transactions are transactions between a resident and a foreign entity where those entities are related in such a way that:

  • The Slovenian taxpayer:
    • directly or indirectly holds 25% or more of the value or number of shares of a the foreign entity through holdings, control over management, supervision or voting rights; or,
    • controls the foreign entity pursuant to a contract or terms of transactions different from those that are or would be achieved in the same or comparable circumstances between unrelated parties; or,
  • The foreign entity:
    • directly or indirectly holds 25% or more of the value or number of shares of a Slovenian taxpayer through holdings, control over management, supervision or voting rights; or,
    • controls the Slovenian taxpayer pursuant to a contract or terms of transactions different from those that are or would be achieved in the same or comparable circumstances between unrelated parties, or
  • The same entity:
    • directly or indirectly holds 25% or more of the value or number of shares, or participates in the management or supervision of Slovenian taxpayer and the foreign entity, or of two Slovenian taxpayers, or they are under the same control pursuant to a contract or transaction terms that differ from those that are or would be agreed in the same or comparable circumstances between unrelated parties, or
  • The same individuals or family members directly or indirectly hold 25% or more of the value or number of shares, holdings, voting rights or control over the management or supervision of a Slovenian taxpayer and a foreign entity, or of two Slovenian taxpayers; or are under their control pursuant to a contract or transaction terms that differ from those that are or would be agreed in the same or comparable circumstances between unrelated parties.

Domestic inter-company transactions are transactions between two Slovenian taxpayers, which are:

  • Related in terms of capital, management or supervision by virtue of one resident, directly or indirectly, holding 25% or more of the value or number of shares, equity holdings, control, supervision or voting rights of the other resident; or controllings the other resident on the basis of a contract in a manner that is different from relationships between non-related parties, or
  • The same legal, natural persons or family members directly or indirectly hold 25% or more of the value or number of shares, holdings, control, supervision or voting rights; or control the Slovenian taxpayer on the basis of a contract, in a manner that is different from relationships between non-related parties.
c) For EU countries, is the content of the documentation similar to that described in the EU Code of Conduct on transfer pricing documentation for associated enterprises (“EU TPD”)? If not, are taxpayers entitled to choose between the local requirements and the EU TPD?

The local provisions on transfer pricing documentation follow the EU TPD.

d) For all countries (and, in particular, OECD countries), is the content of the documentation similar to that described in the revisions to chapter V of the OECD transfer pricing guidelines (final report on Action 13 of the BEPS project)? If not, are taxpayers entitled to choose between the local requirements and the OECD approach?

Yes, it is similar.

The local legislation offers no choice to the taxpayers.

e) Do taxpayers which are not established in your jurisdiction need to undertake to provide any specific information upon request? Can your tax authorities require the taxpayer in your jurisdiction to provide information which is located in another state?

Foreign taxpayers are not directly obliged to provide any specific information upon request of Slovenian tax authorities. The latter may ask the Slovenian taxpayer to obtain such information from its related party or can request a foreign tax authority to request the information from its resident taxpayer under the exchange of information procedures.

f) If comparable studies are to be provided, do the tax authorities generally accept regional benchmark studies (e.g. pan-European benchmark studies)?

Pan-European benchmark studies are accepted.

g) If comparable studies are to be provided in general, are safe harbours / specific circumstances exempting taxpayers from preparing benchmark studies (such as the EU Joint Transfer Pricing Forum guidelines on low value adding services1Report called “Guidelines on low value adding intra-group services” adopted by the European Union Joint Transfer Pricing Forum during the meeting of 4 February 2010. or revisions to chapter VII of the OECD transfer pricing guidelines about low value adding intra-group services) in your jurisdiction or are there situations in which tax authorities do not request benchmark studies? If so, in which circumstances taxpayers are exempted from benchmark studies?

The tax authorities fully follow and, during tax audits, often refer to the EU Joint Transfer Pricing Forum codes of conduct and the OECD Transfer Pricing Guidelines. Provided that the lack of benchmark is substantiated by use of the above guidelines, it is unlikely that the tax authorities would request a benchmark to be prepared.

h) What language(s) are to be used by taxpayers in submitting the transfer pricing documentation?

If the documentation is not prepared in the local language, the tax authorities may request a translation. The translated documentation should be provided within a minimum deadline of 60 days. It is, however, not uncommon for the tax authorities to accept the English version of the documentation.

3. What is the deadline or timescale for providing transfer pricing documentation to the tax authorities (is it to be provided for example upon filing of the tax returns, at the beginning of a tax audit, or on the specific request of the tax authorities)?

With exception for information mentioned at question C.1, the documentation is not submitted together with the annual tax return but upon request of the tax authority at the beginning of the audit procedure. If the documentation is not available immediately upon request, the tax authorities will set a deadline of 30 to 90 days in which the transfer pricing documentation should be provided.

If adequate transfer pricing documentation is not in place, the penalty is EUR 1,200 to EUR 15,000 for micro and small legal entities, EUR 3,200 to 30,000 for medium and large legal entities and up to EUR 4,000 for the manager of the entity.

5. Does the absence or incompleteness of documentation reverse the burden of proof as regards the arm’s length character of the transactions?

If proper transfer pricing documentation is in place, together with the corporate income tax return, the burden of proof lies with the tax authorities.

In that framework, when auditing transfer prices, tax authorities should determine whether inter-company transactions are arm’s length by using the method applied by the taxpayer, provided that the taxpayer has submitted the documentation prepared in line with the recognised methods and that the method used is supported by appropriate calculations.

It is unlikely that failure to submit transfer pricing documentation and the penalty levied in this respect would constitute a serious penalty which would prevent the initiation of a mutual agreement procedure. Note, however, that the tax authorities have not published any clarification on this issue.

7. Any other relevant aspect not addressed above?

N/A

B. Country-by-Country reporting (“CbCR”)

1. Did your jurisdiction implement the obligation to file a CbCR? If not, is the introduction of the CbCR in your jurisdiction contemplated and, if so, when?

Yes, CbCR is fully implemented in the Slovenian tax legislation.

2. If the obligation to file a CbCR is in force, what is the tax year from which this obligation applies and what is the deadline for filing the CbCR?

The first report by the Ultimate Parent Entity is due on 31 December 2017 for fiscal year 2016 (or when the business year is not equal to calendar year, within 12 months after business year-end). The first report by the Constituent Entity is due on 31 December 2018 for fiscal year 2017 in case the Ultimate Parent Entity failed to submit the CbCR.

3. Which taxpayers have to file a CbCR in your jurisdiction?

In Slovenia, the Ultimate Parent Entities resident for tax purposes in Slovenia, are obligated to file the report. If the report is not submitted by any member of the group Constituent entities are obligated to file CbC reports in accordance with the Directive 2016/881/EU.

4. Is the content of the CbCR fully in line with the OECD model (final report on Action 13 of the BEPS project)? If not, what are the differences?

The content is fully in line with the OECD model.

5. What is the penalty for failing to file the CbCR on time? Can local subsidiaries of a foreign group suffer the local penalty if the foreign group has not filed the CbCR?

The same ranges of penalties as below under question C.5 apply for the omission of filing the CbC reports.

Local subsidiaries are not subject to penalties in this respect.

6. Are there tax treaties in force in your jurisdiction allowing the communication of CbCR with other jurisdictions?

Tax treaties do not specifically allow the communication of CbCR.

Slovenian tax authorities are allowed to communicate based on the provisions of the Tax procedure Act.

Furthermore, on 27 january 2016 Slovenia signed the Multilateral Competent Authority agreement for the automatic exchange of Country-by-Country reports.

7. Any other relevant aspect not addressed above?

N/A

C. As the case may be, other documentation / filing requirement in relation to transfer pricing?

1. In your jurisdiction, are there any other documentation / filing requirements in relation to transfer pricing?

Some information in relation with transfer pricing should be enclosed to and filed with the annual corporate income tax return:

  • Interest payments between related parties for loans exceeding EUR 50,000 (Annex 15 of the corporate income tax return);
  • Amount of receivables and liabilities with related non-resident parties if total transactions with one related party exceeds EUR 50,000 (Annex 16 of the corporate income tax return);
  • Amount of receivables and liabilities with related parties established in Slovenia if total transactions with one related party exceeds EUR 50,000 (Annex 17 of the corporate income tax return).

2. If so, what is the content of such documentation / filing requirement? What language(s) are to be used by taxpayers?

The content is defined by the relevant form of the annex to the annual tax return (name of related party, relationship, tax number of the related party, volume of transactions). Slovene language should be used.

3. What is the deadline for meeting this documentation / filing requirement?

The deadline for filing is the same as the deadline for filing the annual corporate income tax return, i.e. 3 months after the end of business year.

4. Does this obligation apply to all taxpayers, or only to certain categories (e.g. taxpayers with turnover or assets exceeding a particular threshold)?

It applies only to taxpayers with transactions with related party(ies) exceeding the given threshold.

5. What is the penalty for failing to meet this requirement on time?

The penalty, levied based on the severity of the offence, is EUR 1,500 to EUR 15,000 for micro and small legal entities, EUR 3,200 to 30,000 for medium and large legal entities and up to EUR 4,000 for the responsible person in the entity.

6. Any other relevant aspect not addressed above?

No.