On 11 March 2022, the National Assembly of the Republic of Slovenia adopted amended Personal Income Tax Act (ZDoh-2Z), which was published in the Official Gazette of the Republic of Slovenia no. 39/2022. The Act entered into force on 22 March 2022 and has been in force since 1 January 2022 inclusive.

Main changes

Tax unburden of employment income

• Increase of general tax relief

Over the next five years, general tax relief will gradually increase by an additional EUR 1,000 per year. Thus, in 2022, instead of the current EUR 3,500 it will amount to EUR 4,500 and up to EUR 7,500 in 2025.

• Relief of high earning individuals by reducing the tax rate in the top tax bracket from 50% to 45%

Individuals with a tax base of over EUR 6,000 per month or over EUR 72,000 per year will be taxed 5% less than before.

• Motivation of employees through looser provisions related to company bonus payment

Company bonus payment is to be paid out in cash or in benefits in kind. Most of the conditions to attain less tax burdened bonus are annulled, among them, the condition of a one-off payment in the tax year is also abolished. However, the condition that the right to payment is defined in the collective agreement or in the general act of the employer is maintained.

The possibility of a higher net payout is introduced by choosing more favorable tax-free amount. In general, the amount of tax-free part of the company bonus maintains at 100% of the average monthly salary of employees in Slovenia, while the novelty allows the possibility of tax-free company bonus of up to 100% of the average monthly salary of the employee, including salary compensations, for the last 12 months, if this option is more favorable.

• Reduction of benefit in kind for private use of personal electric vehicle to zero

Tax relief on capital income

• The personal income tax rate on capital income (interest, dividends and capital gains) is reduced from 27.5% to 25%.
• The ownership period after which personal income tax is not due on capital gains upon alienation is lowered to 15 years, instead of the current 20 years. As per new regulation, personal income tax rate on capital gains is reduced every five years of capital ownership and is now:
  • up to five years of ownership: 25%
  • after five years of ownership: 20%
  • after ten years of ownership: 15%
  • after fifteen years of ownership: 0%

Tax relief on rental income

• The personal income tax rate on rental income is also reduced, from 27.5% to 15%, as well as the percentage of flat-rate costs that reduce tax base from 15% to 10%.