tax office lecture

REPUBLIC OF SLOVENIAMINISTRY OF FINANCE

TAX ADMINISTRATION OF THE REPUBLIC OF

SLOVENIA

PRESENTATION OF THE TAX ADMINISTRATION

OF THE REPUBLIC OF SLOVENIA

07 June 2013



SLOVENIA

BRIEF STATISTICAL INFO ON SLOVENIA

REPUBLIC OF SLOVENIA:

Independent since 1991 EU Member since 1 May 2004 EMU Member since 1 January 2007 Area 20,273 km2

Number of inhabitants (1 January 2013) 2,058,821 GDP per capita (2013) 17,244 EUR Member of OECD since 2010

Source: Statistical Office of the Republic of Slovenia, May 2013



SLOVENIA

EXTERNAL TRADE

In 2012 Slovenia

exported goods worth EUR 14,5 billion - 2012; imported goods worth EUR 15,7 billion - 2012;

had a trade balance deficit worth EUR 1,2 billion.

Source: Statistical Office of the Republic of Slovenia, May 2013



SLOVENIA

EXTERNAL TRADELargest business partners (2012)

Imports (in 1,000 EUR)

Italy 4,052,341 Germany 4,038,528 Austria 2,579,380Croatia 942,455 India 208,959

Exports (in 1,000 EUR)

Germany 4,455,617 Italy 2,377,958 Austria 1,731,477 Croatia 1,343,328 India 80,729



SLOVENIA

THE BASIC PRESENTATION OF TAX ADMINISTRATION

Tax administration is a constituent of the Ministry of Finance

•General Tax Office

•Special tax Office

•15 Tax Offices with 41 branches

In the context of rationalization on 1 July the Tax Administration will close down forty one branches throughout Slovenia and transformed them into a tax office, which should be open for residents two days a week.



SLOVENIA

THE TASKS OF THE SLOVENE TAX ADMINISTRATION• assessment, • collection, • supervision and enforcement of taxes and other duties on the basis

of the laws and other regulations and international agreements,• since 1.1.2013 supervision of gaming activitiesTASKS OF GENERAL TAX OFFICE

- Organisation of the work of the Tax Offices- Direct supervision over the work of Tax

Offices- Managing of the Tax register- Providing uniform implementation of tax

legislation- Providing uniform implementation of tax audit

procedure and tax enforcement- Conducting tax investigation and developing

methods and techniques for preventing fiscal evasion and avoidance

- Training of Tax Administration’s employees- Informing the public- Co-operation with state’s bodies- International co-operation and exchange of

information

TASKS OF GENERAL TAX OFFICE

- Organisation of the work of the Tax Offices- Direct supervision over the work of Tax

Offices- Managing of the Tax register- Providing uniform implementation of tax





information


- Organisation of the work of the Tax Offices- Direct supervision over the work of Tax Offices- Managing of the Tax register- Providing uniform implementation of tax





information


- Organisation of the work of the Tax Offices- Direct supervision over the work of Tax Offices- Managing of the Tax register- Providing uniform implementation of tax





information



SLOVENIA

DIVISION OF REGIONAL TAX OFFICES

GENERAL TAX OFFICE and SPECIAL TAX OFFICE



SLOVENIA

HUMAN RESOURCES



SLOVENIA

HUMAN RESOURCESThe Slovenian Tax Administration has 2.421 employees (2012)



SLOVENIA

LEVEL OF EDUCATION



SLOVENIA

WEB TAX ADMINISTRATION

• Substantially upgraded knowledge base –

virtual assistant tax named VIDA

220,188 answers in 2012

• Web-site contains all current answers

to the questions taxpayers at all tax areas

31,295 written responses to the questions of taxpayers



SLOVENIA

NUMBER OF TAXPAYERS ENTERED INTO TAX REGISTER

Number of taxpayers on 31 December 2012:

Number of individuals 2,590,456

Number of individuals,

performing business activities 90,915

Number of legal entities 128,338

In total 2,809,709



SLOVENIA

TAX SYSTEM IN SLOVENIA

Taxes in Slovenia are divided into:

•Direct taxes on income•Direct taxes on property•Indirect taxes



SLOVENIA

INCOME TAX FOR INDIVIDUALS

Personal income tax rate

If the net annual taxable amount is (in euro)

Income tax amount is (in euro)

above to

7.840,53 16 %

7.840,53 15.681,03 1.254,48 + 27 % nad 7.840,53

15.681,03 3.371,42 + 41 % nad 15.681,03



SLOVENIA

GOVERNMENT AND OTHER REVENUES COLLECTED BY THE TAX ADMINISTRATION

Type of revenue Realisation 2012 (in EUR) Realisation 2011 (in EUR)

Tax revenues 10.430.524.252 10.599.310.058

Non-tax revenues 65.783.048 69.156.117

Transfer revenues 485.508.825 496.974.046

Total government revenues 10.981.816.125 11.165.440.220

Unallocated -5.546.818 13.406.389

Total government revenues + unlocated 10.976.269.307 11.178.846.609

Other 0 116.344

IN TOTAL 10.976.269.307 11.178.962.953



SLOVENIA

TAX REVENUES

Type of revenue Realisation 2012 (in EUR) Realisation 2011 (in EUR)

Taxes on income and profit 2.661.882.949 2.733.871.017

Social security contributions 5.232.873.659 5.287.058.761

Taxes on payroll and workforce 25.622.525 28.751.187

Taxes on property 232.995.891 215.078.306

Domestic taxes on goods and services 2.276.882.006 2.337.581.048

Other taxes 267.222 -3.030.261

TAX REVENUES 10.430.524.252 10.599.310.058



SLOVENIA

INTERNATIONAL TAXATIONDouble Taxation Convention (DTC)

Slovenia currently has DTCs in force with 51 countries. DTCs concluded by Slovenia follow the OECD Model Tax Convention on

Income and Capital with some modifications.

Slovenia also concluded DTC with India. It is in force in both countries since 2004.

Double taxation shall be eliminated in both countries by ordinary credit method: Slovenia (or India) shall allow as a deduction from the tax on the income of its resident, an amount egual to the income tax paid abroad.

With India we had very good cooperation in the international tax matters. Until now there was no specific or problem in the international taxation.



SLOVENIA

THE TAXATION METHOD FOR LEGAL ENTITIES

Legal persons and individuals performing business activities settle their tax obligations as a rule under the principle of self-taxation:

taxpayer calculates tax in the tax settlement by him/herself

submits the tax settlement to the tax authority within prescribed time limits and in the prescribed form fulfils its tax obligations with payment of tax within the prescribed time limit



SLOVENIA

PROCESSING OF SETTLEMENTS Till 1 January 2009 it was possible to submit settlements

in the paper form on the storing media in the electronic form

After 1 January 2009 settlements can be submitted only in the electronic form.

Support applications for submission/receiving/transfer into the background are prepared in a way that the data, which are entered into the settlement by the taxpayer, are systematically checked in accordance with calculation and logical built-in controls, set in advance:

Detected critical errors: the system doesn’t allow the taxpayer to submit the settlement!

Detected non-critical errors: the system submits a warning to the taxpayer!



SLOVENIA

RELIEF FOR SMALL AND MEDIUM COMPANIES

There is no special tax relief for small and medium

companies, but these companies may receive

subsidies from the state.

Subsidies are as a rule intended for encouraging development programmes in small and medium companies, for investments into research and development.

Companies may receive subsidies on the basis of tender application and meeting tender requirements.



SLOVENIA

RELIEF FOR SMALL AND MEDIUM COMPANIES

Relief for investments into specific equipment and intangible long-term fixed assets (30 % of investments, max 30,000 €)

Relief for investments into research and development (20 %)

Additional regional relief for investments into research and development

Possible reduction of the tax base for previous tax loss

Relief for employment of the disabled

Relief for donations

Relief for additional pension insurance



SLOVENIA

VAT IN SLOVENIA TAXABLE PERSON in Slovenia is any person who, independently,

carries out any economic activity in any place, whatever the purpose or result of that

Transactions subject to VAT are: The supply of goods for consideration within the territory of the

Republic of Slovenia by a taxable person in the course of his/her economic activity

The IC acquisition of goods for consideration within the territory of Slovenia

The supply of services for consideration within the territory of Slovenia by a taxable person in the course of his/her economic activity

The importation of goods



SLOVENIA

TAX RATES GENERAL RATE: 20 % of the taxable amount (on 1.7.2013 it will be

increased 22 %) the same rate for the supply of goods and for the supply of

services

REDUCED RATE: 8.5 % of the taxable amount for the supply of goods and services (on 1.7.2013 9,5 %): foodstuffs for human and animal consumption medical equipment books transport of passengers and their personal luggage Import of works of art the use of sporting facilities flats, housing and other facilities intended for permanent residence



SLOVENIA

EXEMPTIONSEXEMPTIONS FROM VAT:

export

intracommunity supply

insurance and reinsurance transactions

interest

preschool education, school education, vocational education and retraining

hospital and medical care and closely related activities undertaken by public health institutes

health care provided by health workers as part of a freelance health care activity



SLOVENIA

NUMBER OF VAT TAXPAYERS Legal persons Individuals Domestic Foreign 1 month 3 months 6 months Exporter Total taxpayers

31.12.2006 46.323 44.107 89.904 526 50.658 16.446 23.326 929 90.430

31.12.2007 44.133 43.030 86.567 596 38.341 48.822 0 921 87.163

31.12.2008 46.880 45.528 91.741 667 42.191 50.217 0 917 92.408

31.12.2009 49.053 46.985 95.308 730 43.231 52.806 0 886 96.038

31.12.2010 51.155 47.815 98.214 756 44.933 54.037 0 0 98.970

31.12.2011 53.556 48.334 100.984 906 45.966 55.924 0 0 101.890

31.12.2012 48.001 54.760 101.641 1.120 45.292 57.469 0 0 102.761



SLOVENIA

VIES VAT Information Exchange System

Links together national VAT databases Electronic means of transmitting information between MS relating to:

Exempt intra–Community supplies VAT registration of companies registered in the EU

At the moment the system connects 27 EU Member States

The control point of the goods flow, which was previously carried out by the customs authority, is taken over by the computer-supported VIES system

the Member States believe that VIES is the basic element for the possibility of controlling the flow of goods after 1993



SLOVENIA

VAT REFUND TO TAXABLE PERSONS, NOT ESTABLISHED IN SLOVENIA

The taxable person who is not established in Slovenia has under the conditions, the right to a VAT refund, charged for goods or services, which have been supplied to him by other taxable persons on the territory of Slovenia, or charged at the import of goods into Slovenia.

India and Slovenia don’t have a signed reciprocity treaty. VAT refund to taxable persons established outside the Community shall be granted only on condition of reciprocity.



SLOVENIA

INTERNATIONAL COOPERATION AND EXCHANGE OF INFORMATION

Tax Administration exchanges information with the competent authorities of the Member States of the EU.

Exchange of information on VAT for 2012TYPE OF EXCHANGE RECEIVED SENT TOTAL Exchange on request 396 297 693 Spontaneous information 43 36 79 Automatic exchange 14.014 7.067 21.081 New means of transport 14 226 240 VAT refunds 4.267 6.678 10.945 Potential Missing Traders 6.468 0 6.468

Termination of VAT ID 3.133 4 3.137

Allocation VAT ID numbers 124 159 283

Distance selling 8 0 8



SLOVENIA

IMPORTANT PROJECTS IN 2013

1. New Tax Information System – Impletation of the ERP system (SAP)

2. The merger of tax and customs administration

3. Tax avoidance and 38. article

4. Horizontal Monitoring



SLOVENIA

TAX INFORMATION SYSTEM – IMPLETATION OF THE ERP SYSTEM (SAP)

• Contract was signed 25.3.2010 with IBM as implementator on SAP platform (2 subimplementators)

• We went live in October 2011 in the following areas :– Master data– Tax Payer Accounting– Enforcement– VAT (18 business processes)– Misdemeanour– CRM– Outbound correspondence (300 forms)– Data warehouse– 12 migrations of data, 80 interfaces

• 2400 employees (nearly all the employees) of tax administration use the system (training was very important, during August and September 2011 several hundred workshops have been organized)



SLOVENIA

THE PROJECT – PRACTICAL EXPERIENCE

In tender you have to demand for some of supplier’s staff that they have

experiences with big projects in tax area or (and) public sector area

You have to demand a person, experienced in solution (not necessary tax area),

who assures unique technical solution in the whole project (system architect)

Majority of staff must have experience in project, where solution was used

First financial results: in the first 7 months enforcement was higher than planned

for 62 mil. EUR, what means 17 mil. EUR more money. We believe that to the

end of the year we assure more than 30 mil. EUR additional money in the budget

(value of the project is 25 mil. EUR !)

Other result : we reduce number of people dealing with payments (ca. 30

people), they can perform other tasks (i.e. desk audit, enforcement…)



SLOVENIA

THE MERGER OF TAX AND CUSTOMS ADMINISTRATION

This year should be taken the necessary legal basis that will allow the merger.

Integration project should be on 1.1.2014.



SLOVENIA

TAX AVOIDANCE AND 38. ARTICLE

New paragraph 38 of the Law on Tax Procedure provides that a taxpayer may not use such a program or device that allows you to delete, correct or change any of the original data format, without the original record, and any subsequent changes to the data stored on your device or on another medium used for electronic data processing.

Furthermore, the new ninth paragraph 38 of the Law on Tax Procedure provides that a manufacturer or supplier of a computer program or electronic device not taxpayers provide or allow the use of a computer program or electronic device at the time of sale or transfer of the application, by default allows you to delete, correct or modify any original record stored in the device or on other media without the retention of initial information and any subsequent changes.



SLOVENIA

HORIZONTAL MONITORING (HM)

The background and reasons for introduction of HM in Slovenia

•Strategic guidelines of the Slovenian Tax Administration – Strategic business plan 2010-2013

•Findings of studies, researches and guidelines of international organizations (IOTA, FISCALIS, OECD)

•Best practice : Dutch model of horizontal monitoring



SLOVENIA

HORIZONTAL MONITORING (HM)First activities

•Two-day public presentation in March 2010, separate for large taxpayers and banks with Dutch colleagues

•Public invitation for all large taxpayers which would like to participate in a pilot project in May 2010

•Meetings with CEOs of all registered taxpayers in June, July and August 2010

•Cooperation with chambers and interest associations

•Participation of Tax Administration in several conferences and debates



SLOVENIA

HORIZONTAL MONITORING (HM)Goals of the pilot project

•To answer the following question:

“Is the Slovenian tax environment appropriate for establishing such a system of horizontal monitoring to all taxpayers who are willing to voluntarily comply and to disclose their risks and to establish effective systems of internal controls for tax purposes?”

•Setting tax standards or recommendations

•To improve relations between tax authorities and taxpayers



SLOVENIA

SLOVENIA'S PARTICIPATION IN INTERNATIONAL ORGANIZATIONS

OECD since 2010

IOTA since 1997

and other informal organizations

V6

B6



SLOVENIA

THANK YOU FOR YOUR ATTENTION

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