Slovenia: Increase of R&D and investment allowances and decrease of CIT rate

Slovenia amended its Corporate Income Tax Act to increase R&D and investment allowances and decrease the CIT rate. The Amending Act entered into force on 27 April 2012, but shall apply as from 1 January 2012.

R&D allowance.
The tax relief for investments in R&D is increased from 40% to 100% of the amount invested in internal R&D activities and / or in the purchase of external R&D services. The R&D allowance can be deducted up to the tax base of the taxpayer and the unutilized amount can be carried forward to the next five tax periods. The regional R&D allowance is abolished, but taxpayers may still reduce their tax base with the unutilized regional R&D allowance carried forward, if it was claimed before 27 April 2012.

Investment allowance.
The tax allowance for investments is increased from 30% to 40% of the amount invested in equipment and intangible assets. The investment allowance can be deducted up to the tax base of the taxpayer and the unutilized amount can be carried forward to the next five tax periods. The scope of equipment, for which the investment allowance cannot be claimed remains unchanged (i.e. furniture and office equipment except computer equipment and certain motor vehicles). The scope of intangibles, for which the investment allowance cannot be claimed, is changed: goodwill and immovable property rights as well as similar rights shall not qualify for the allowance.

Gradual reduction of CIT rate.
The CIT rate is gradually decreased from 20% to 15%. Taxpayers will pay 18% CIT in 2012, 17% CIT in 2013, 16% CIT in 2014 and 15% CIT from 2015 onwards. Special attention should be paid to CIT advance payments: for the remaining months 2012 the CIT advance payments shall be calculated with a CIT rate of 18%. The Tax Procedure Act does not foresee what happens with already paid CIT advance payments calculated at the 20% CIT rate. Guidance from the tax authority is to be expected shortly.

Alenka Gorenčič
agorencic@deloitte.com

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