Act Amending the Personal Income Tax Act (ZDoh-2M)

Recent amendments to the Personal Income Tax Act were primarily triggered by harmonisation with the amended relevant system of laws (Pension and Disability Insurance Act and the Employment Relationship Act), and acquis of the European Union. In addition, the amended Act eliminates the unconstitutional provision granting the special personal tax relief to cross-border migrants. The main changes brought about by the amendment are as follows:

• Figures referred to income tax brackets and amounts of tax reliefs will no longer be automatically adjusted for annual inflation, but will follow the price increases only if the latter exceeds a certain limit.
• The income tax base arising from other contractual relationship (work contract, contract for a copyrighted work) may now be reduced also for the mandatory social security contributions. Namely, as of January 1st 2014, all persons, who perform their duties under other contractual relationship and are not compulsorily insured under any other basis must make contributions for mandatory pension and disability insurance. Therefore, in such cases, the contributions paid will decrease the tax base.
• From January 1st 2014 onwards the severance resulting from termination of a fixed-term employment, defined as the right arising from the employment and disbursed under the conditions and in the amount as set out by the Employment Relationship Act, will not be included in the tax base to the amount of three average monthly salaries in Slovenia
• Special tax relief, which was recognized to residents, cross-border labour migrants, who received income from a foreign employer as the result of an employment relationship, or employment abroad, has been abolished.
• The amendment is broadening the scope of reliefs to which a resident of an EU Member State or EEA is entitled to, if they earn a substantial portion of their total taxable income in Slovenia. They will, inter alia, be able to claim tax relief for voluntary supplementary pension insurance.

As a result of the new provisions of the Pension and Disability Insurance Act, under which the collective voluntary supplementary pension insurance may be taken up by the insured engaged in gainful or other self-employment, the tax reliefs taken into account in the calculation of prepayment of income tax on income earned from business activities now include a relief for voluntary supplementary pension insurance.