New VAT changes are proposed in Slovenia

On April 16th 2021 some new VAT changes were proposed in Slovenia. The main goal of proposed changes is to abolish as much administrative obstacles as possible for domestic and foreigner taxable persons, such as:

  • abolishing obligation of prior notification, which has to be submitted by persons other than public law entities in order to obtain exemptions for certain activities in the public interest,
  • implementation of Article 194 of VAT Directive,
  • implementation of possibility of giving the invoice to the final consumer only on his demand,
  • changing the form of VAT return,
  • abolishing the obligation regarding submitting all issued and received invoices together with first VAT return after VAT registration and
  • some simplifications for farmers.

In addition to the mentioned changes, one of most expected change is the right of VAT deduction for electric passenger cars. Such change will definitely be one of most welcomed after Slovenia joined EU.

However, other restrictions regarding VAT deduction within “stand still” clause will still remain. A taxable person shall still not deduct VAT for example on other passenger cars, yachts, boats intended for sport and recreation and aircraft, together fuels, lubricants, spare parts and services which are closely linked thereto, unless they are used for certain economic activities. Restrictions for VAT deduction will also remain for entertainment expenses (where entertainment expenses shall include only the costs of entertainment and amusement during business and social contacts) and expenses for meals (including drinks) and accommodation expenses, except expenses incurred by a taxable person in connection with these supplies in the ordinary course of his business. If the proposal is adopted, VAT for electronic passenger cars will be possible for cars not exceeding 80.000 EUR and free of carbon dioxide.

Most of the mentioned changes shall apply from 1 January 2022.

mag. Aleksandra Heinzer