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Clarification issued by the Tax Administration (DURS)

Daily subsistence allowance (per diem) received by employees working for foreign employers

2014-05

In June, a clarification was published on the DURS website regarding the tax treatment of daily subsistence allowance that cross-border migrant workers (Slovenian residents) working abroad for a foreign employer receive as reimbursement of costs for business trips.

Pursuant to Article 45 of the Personal Income Tax Act, a Slovenian tax resident earning employment income abroad may claim a reduction in the tax base for costs for meal and transportation allowance. If a taxable person, in addition to their wage receives reimbursement of costs relating to business trips, the general rule on tax-free income referred to in Article 17 of the Personal Income Tax Act, pursuant to which the provisions on income excluded from the tax base relate to both income sourced to Slovenia and to income sourced abroad, is applied.

Therefore, if the taxable person, in addition to their wage, receives reimbursements of costs relating to business trips (e.g. per diem) from their foreign employer, these are not included in the tax base under the terms and to the amount specified by the Decree on the Levels of Reimbursed Work-Related Expenses and of Certain Income Not to be Included in the Tax Base.

Authors

Picture of Sasa Sodja
Saša Sodja
Attorney-at-Law
Ljubljana