Slovenia Crypto Tax

In Slovenia, the application of taxes depends on the nature and structure of business activities that a company conducts. While individual crypto traders in Slovenia are facing new crypto-specific taxes, currently, the government doesn’t impose any taxes specific to crypto economic activities carried out by companies, and therefore they’re obligated to abide by general taxation rules which are harmonised with EU regulations and global taxation standards.

The Financial Administration of the Republic of Slovenia is the national authority responsible for the collection and administration of national taxes. This way it works to ensure social and economic security and protection of society, including prevention and elimination of prohibited activities. Moreover, it partners with international authorities to maintain fair taxation and attract foreign investments.

Slovenia is a member of the Organization for Economic Cooperation and Development (OECD) whose role is to develop standards and promote policies that improve the economies of the member countries. Slovenian crypto businesses should note that the ​​OECD has introduced a new international tax transparency framework, the Crypto-Asset Reporting Framework (CARF), the purpose of which is to raise and sustain crypto taxation and tax reporting standards. This will be implemented through automated tax reporting and taxpayer information sharing between international tax authorities. While some businesses might be exempt, crypto exchanges and transfer service providers are subject to the new rules.

Advantages of the Slovenian Tax System

To avoid the double taxation of taxpayers in two different countries, Slovenia has signed over 50 international agreements on the elimination of double taxation. It’s quite an extensive network that crypto businesses having a resident status in Slovenia can avail of. It’s worth noting that these agreements don’t stipulate granular details for taxation. Instead, they restrict the contracting countries’ taxation rights and the basis for taxation lies in the contracting countries’ domestic legislation. Overall, these double taxation agreements are instrumental in the promotion of international economic activities.

Another significant advantage of the Slovenian tax system is that Slovenian tax laws allow tax reliefs on the employment of disabled people, student apprenticeships, voluntary supplementary pension insurance, donations, and investments in research and development (R&D) activities.

As for the government’s support of R&D activities, the generosity of R&D tax incentives in Slovenia has increased over time and Slovenia is placed above the OECD average, which is a sign that Slovenia is open to innovation and is committed to ensuring that innovative businesses have room for growth. Slovenia provides R&D tax relief through a 100% R&D tax allowance on the volume of qualifying R&D expenses within the tax period.

Qualifying expenses include internal R&D activities within the company, and machinery and equipment acquisition costs. If there’s an insufficient tax liability, unused credits can be carried forward for five years. An upper ceiling now applies to the total reduction of the tax base due to tax reliefs and tax losses from previous tax periods, which can’t exceed 63% of the tax base in the current tax year.

Corporate Income Tax

In Slovenia, the standard Corporate Income Tax rate is 19% which applies to various types of income sourced during a tax period. For Slovenian tax residents, the tax is levied on their income sourced in Slovenia and abroad. Slovenian tax non-residents are taxed only on income sourced in Slovenia, including through permanent establishments (PEs) located in Slovenia. A company is considered a Slovenian tax resident if it has its registered office or place of effective management located in Slovenia.

Taxable income is any profits received from the company’s economic activities, reduced by qualifying deductible expenses that must be well-documented. If the revenue of the previous year doesn’t exceed the threshold of 50,000 EUR, such a company can decide to take a lump sum deduction equivalent to 80% of its annual revenue instead of actual expenses. For companies that employ at least one person on a full-time basis for at least five months, the threshold is 100,000 EUR.

Tax returns must be submitted to the tax authority by the 31st of March of the current year for the previous year’s economic activities if the company’s tax period corresponds with the calendar year. If the tax period instead is linked to the business year, tax returns are submitted within three months from the beginning of the current business year for the previous business year. Tax returns are submitted in electronic form through a dedicated electronic system, which is only available to those taxpayers who have a relevant digital certificate.

Withholding Tax

The standard rate of the Withholding Tax is 15%. The tax must be calculated and withheld on the payments made to recipients outside Slovenia by tax residents and non-residents on income sourced in Slovenia. Dividends, interest, copyrights, patents, and licences are subject to tax.

The Withholding Tax is also applicable to specific types of services (e.g., consulting, marketing, staffing, and administration), if the country where they were provided is included in the list published by the Ministry of Finance, and if that country’s Corporate Income Tax rate is below 12.5%.

In the case of special provisions in double taxation agreements, the rate might be reduced. Exemptions may apply if the Interest and Royalties Directive and the Parent-Subsidiary Directive permit. Also, the tax doesn’t apply to dividends paid to a parent company located in another EU member country if those dividends are exempt from tax when held by the recipient.

Capital Gains Tax

The standard Capital Gains Tax is 25%, and it’s levied on interest, dividends, and other income. The tax on capital gains is treated as a final tax for taxpayers, irrespective of their residence status. Interest received up to the amount of 1,000 EUR from bank deposits with banks or savings banks registered in Slovenia or another EU country isn’t subject to tax.

The rate of capital gains decreases in accordance with the length of the holding period, and it varies as follows:

• For a holding period from 0 to 5 years – 25 %
• For a holding period from 5 to 10 years – 20%
• For a holding period from 10 to 15 years – 15%
• For a holding period greater than 15 years – 0%

Value-Added Tax

The standard Slovenian VAT rate is 22% and generally applies to all products and services sold in Slovenia. The VAT Act is aligned with the EU directives and is part of the EU’s common VAT system. Startups often don’t need to immediately register for VAT, and the threshold for VAT registration in Slovenia is 50,000 EUR. However, it doesn’t apply to taxable foreign persons. Non-EU companies are required to appoint a fiscal representative who becomes liable for paying VAT when the business turnover exceeds 50,000 EUR within the previous 12 months. VAT returns are submitted for each tax period separately, even in the case of no transactions.

When it comes to the VAT treatment of specific crypto products and services, the Slovenian tax authority is yet to provide comprehensive guidance. Nevertheless, since Slovenia is a member of the EU, it’s clear that such cryptoassets as Bitcoin can be exchanged without VAT in the EU, following the decision of the Court of Justice of the European Union (CJEU). This is because crypto transactions are put in the same bucket as transactions relating to traditional currency, banknotes, and coins used as legal tender.

Payroll Contributions in Slovenia

Every crypto company that employs people in Slovenia is responsible for withholding, filing, and remitting various payroll contributions to the government on their employees’ behalf. The payroll frequency is monthly, with the payment of salaries usually made on the last working day of each month.

The Personal Income Tax is progressive, and the rates vary as follows:

• If the taxable income doesn’t exceed 8,755 EUR – 16%
• If the taxable income is between 8,755 EUR and 25,750 EUR – 26%
• If the taxable income is between 25,750 EUR and 51,500 EUR – 33%
• If the taxable income is between 51,500 EUR and 74,160 EUR – 39%
• If the taxable income exceeds 74,160 EUR – 50%

Employers are obligated to make the following payroll contributions on the basis of the salaries of their employees:

• Pension – 8.85%
• Health insurance – 6.56%
• Unemployment – 0.06%
• Work injury – 0.53%
• Parental leave – 0.10%

Employees are obligated to make the following payroll contributions:

• Pension – 15.50%
• Health insurance – 6.36%
• Unemployment – 0.14%
• Parental leave – 0.10%

If you wish to successfully and sustainably run your crypto business in this crypto-friendly European jurisdiction, our team of dedicated and quality-focused legal consultants here at Regulated United Europe (RUE) will be delighted to provide you with tailored, value-added support in optimising your taxes in accordance with applicable legislation. Moreover, we also offer comprehensive Slovenian crypto company formation, crypto licensing, and financial accounting services. Contact us now to schedule a personalised consultation.

Also, lawyers from Regulated United Europe provide legal support for crypto projects and help with adaptation to MICA regulations.

Slovenia Crypto Tax 2024

In 2024, Slovenia continues to be at the forefront of European regulation and taxation of cryptocurrencies, offering one of the most progressive and innovative regulatory frameworks. The country, known for its efforts to create an enabling environment for the development of blockchain technologies and cryptocurrencies, is taking steps to further strengthen its status as a center of crypto innovation.

Regulation of Cryptocurrencies

In Slovenia, regulation of cryptocurrencies is carried out by several authorities, depending on the nature of the activities related to cryptoassets. The main regulator in the financial services sector is the Bank of Slovenia, which, in cooperation with the Securities Market Agency, supervises cryptocurrency transactions in terms of their compliance with financial legislation, as well as anti-money laundering and anti-terrorist financing regulations.

Taxation of Cryptocurrencies

Taxation of cryptocurrencies in Slovenia in 2024 is characterized by the following basic principles:

• Capital Gains : Individual investors who receive income from the sale of cryptocurrencies are subject to capital gains tax. Tax rates may vary depending on the length of ownership of the asset and the amount of profit.
• Income from Mining : Income received from mining cryptocurrencies is considered taxable income and is subject to taxation in accordance with the general rules of taxation of income of individuals and legal entities.
• VAT : According to the position of the European Court, transactions with cryptocurrency considered as a means of payment are exempt from VAT. This rule also applies in Slovenia, making transactions with cryptocurrencies more attractive for business.
• Corporate Income Tax : Companies engaged in cryptocurrency activities must include income from these activities in their general tax base and are taxed at the general corporate rate.

Tax Innovations

Slovenia continues to explore opportunities to further simplify the taxation of cryptocurrencies, including introducing clearer criteria for determining tax liabilities and simplifying the process of declaring income from cryptoassets. The key is to strive for a fair and transparent tax system that promotes growth and innovation in the cryptocurrency space.

Conclusion

In 2024, Slovenia establishes itself as one of the leading countries in taxing and regulating cryptocurrencies, offering a clear and understandable regulatory framework. This approach not only contributes to the development of the crypto industry at the national level, but also attracts foreign investors looking for a stable and friendly jurisdiction for their activities in the field of cryptocurrencies and blockchain. Slovenia continues to demonstrate how effective regulation and sound tax policies can promote innovation and economic growth.

How do I pay taxes on crypto in Slovenia in 2024?

In 2024, taxation of cryptocurrency income in Slovenia continues to be a hot topic among cryptocurrency investors and users. The Slovenian tax system provides specific rules for declaring and paying taxes on income derived from trading and investing in cryptocurrencies. This article will provide a detailed overview of the procedures and requirements necessary to comply with Slovenia’s cryptocurrency tax laws.

Basics of cryptocurrency taxation in Slovenia

Slovenian legislation treats cryptocurrency revenues depending on the type of activity: either as capital gains (investments) or as income from business activities. An important aspect is how often and in what volumes transactions are carried out and whether they are the main source of income.

Tax on capital gains

If income from cryptocurrencies is treated as capital gains (i.e., derived from investments), it is taxable. The tax rate depends on the period of holding the asset:

• Gains realised on the sale of cryptocurrencies held for less than two years are taxed at the rates applicable to capital gains.
• Gains from the sale of cryptocurrencies after two years of ownership are not taxable.

Tax on income from business activities

If cryptocurrency trading is regular and generates a significant portion of income, such transactions may qualify as business activities. In this case, the income is subject to corporate income tax or personal income tax depending on the legal status of the taxpayer.

Declaration process

To pay taxes on cryptocurrency income in Slovenia you need to:

1. Determine the type of income (capital gains or business activity).
2. Calculate the amount of income or gain that is taxable.
3. Declare income in the tax return according to the type of income.

Tax rates

• Capital Gains Tax: The rate varies and depends on the taxpayer’s total income for the tax year.
• Tax on income from business activities: The corporate income tax rate is 19%. For individuals, the tax rate is determined according to their tax scale.

The importance of keeping detailed records

In order to successfully declare cryptocurrency income in Slovenia, it is crucial to keep detailed records of all transactions. This includes information on the date of purchase and sale, the value in euros at the time of the transaction, and the profit or loss realised. This approach will not only make the declaration process easier, but will also help to optimise tax liabilities.

Seeking professional help

Given the complexity of tax laws and the rapidly changing nature of the cryptocurrency market, seeking professional help is highly recommended. A tax advisor or auditor can provide up-to-date information on tax rates, exemptions and liabilities, as well as help with proper tax return preparation.

Keep abreast of changes in legislation

Tax laws are subject to change, especially in the area of cryptocurrencies, which continues to evolve. Consequently, it is important to stay up to date with the latest news and changes to the Slovenian tax code to ensure full tax compliance.

Conclusion

Slovenia’s approach to the taxation of cryptocurrency income reflects the country’s commitment to regulating digital currencies and ensuring fair taxation. Understanding and complying with tax obligations will help you avoid potential penalties and optimise your tax burden. Planning, attention to detail and the use of professional services will make the process of managing cryptocurrency assets more transparent and efficient.

Table with the main tax rates in Slovenia for 2024. This table includes information about the rates of personal income tax, corporate income tax, value added tax (VAT), and also mentions the tax rates applicable to income from cryptocurrencies.

These rates provide a general overview of the Slovenian tax system. However, it is important to remember that tax laws are subject to change and there may be specific conditions or deductions applicable to your situation.