Incentives

The  EU member states economies are considerbly driven by the grant aid which, at the same time,  is a tool of regional policy in addition to an adequate legal framework and a stable macroeconomic environment. For it’s regions Slovenia has developed an incentive system in order to boost foreign direct investment and consequently country's economic development. The system is based especially on the creation of new jobs, transfer of new technologies and know-how as well as on outsourcing opportunities.

The instruments of the government's pro-active investment policy are directed to the animation of the foreign investors who are already running operations in Slovenia to expand or upgrade their capacities. Nevertheless many cases show that foreign investors who have discovered this "right mix of qualities" are staying in the country longtermly and take every opportunity to expand their operations in Slovenia. 

 

More about the national incentive system

FISCAL INCENTIVES:

Corporate Tax:

General corporate tax rate has been set at 17% of taxable base.  

Corporate income tax by country, 2015

Source: Eurostat

 

Tax Reliefs for Investment:

Corporate income tax base can be reduced by:

  • either 40% of the amount invested in plant and equipment and/or intangible assets 

A taxpayer may carry forward the unused portions of allowance over the next five tax years after the investment, but not exceeding the tax base.

  • or 100% of the amount invested in R&D (only up to the taxable base).
      

Depreciation Allowances:

 The depreciation allowance on buildings and equipment is quite favourable. Depreciation and amortization may not exceed the level arrived at using straight-line depreciation and the maximum annual depreciation rates shown in table.

 

Maximum annual depreciation rates in 2016

Depreciation category

%

Building projects

3
(including investment real properties)

Parts of building facilities and parts of investment real properties

6

Equipment, vehicles and machinery

20

Computers and computr equipment

50
(computer equipment, software and hardware)

Long-term plantations

10

Breeding and working herds

20

Equipment and parts of equipment for research activities

33.3

Other investments

10

Source: Republic of Slovenia, National Assembly; Corporation Tax Act

Loss Carried Forward:

A taxpayer may carry forward the loss incurred in one accounting period by reducing the tax base but only up to the amount of the tax base for the fiscal period.

 

FINANCIAL INCENTIVES:

Regional aid map 2015-2020

The amount of financial incentives:

1.   In the area “a” of regional aid map is not more than:

  • 25 % of the eligible costs for large enterprises,
  • 35 % of the eligible costs for medium-sized enterprises, and
  • 45 % of the eligible costs for small-sized enterprises.

2.    In the area “c” of regional aid map the amount of financial incentives is not more than:

  • 15 % of the eligible costs until 31 December 2017 and 10 % from 1 January 2018 onward for large enterprises,
  • 25 % of the eligible costs until 31 December 2017 and 20 % from 1 January 2018 onward for medium-sized enterprises,
  • 35 % of the eligible costs until 31 Decem

 

OTHER INCENTIVES:

Regional development support programs for disadvantaged regions

The government has assigned a special status to four administrative regions where the unemployment has the highest rates. This way the regions can benefit from the temporary development support measures. The basic principle is equipping the viable enterprises by necessary skills for internationalisation in order to build their position on international markets.

 

Overview of development measures:

 

2016 - 2018

Corporation tax relief

70% of the invested amount for new start-up investments in plant and equipment, and in intangible assets

Corporation tax relief for employment

a tax base reduced by up to 70% of expense for a disadvantaged* employee (for at least 12 months employment)

Refund of social security contributions paid by the employer

16.1% of the gross wage of previous unemployed person

Local Incentives:

Municipalities in Slovenia and its regions may offer different forms of incentives, which are negotiated on a case-by-case basis. These incentives may include easy access to industrial sites, utility connections and holidays from local taxes.

 

Employment Incentives:

The Employment Service of Slovenia carries out a series of measures for encouraging employment through which it advises and finally supports employers that employ new workers.

Employers who intend to hire unemployed persons may apply for free training and retraining provided by local employment offices throughout Slovenia.

 

Benefits for investors in Podravje region:

The Government of Slovenia with the Decision on additional temporary measures to support the development problem area with a high unemployment in Maribor and its surroundings (Ur. L. RS 53/2013) established the following temporary additional development support measures - investment incentives to foreign investors in the period 2013-2018:
 

Measure 2:
Repayment of contributions paid to employer social security on the basis of Article 27 of the Act on balanced regional development.

Measure 3:
Tax relief for employment in Maribor with the general relief - reduction of the tax base by 70 percent of costs - based on Article 28 of the Act on Promotion of Balanced Regional Development.

Measure 4:
Tax relief - reduction of the tax base of 70 per cent of the invested amount for new initial investment in equipment and intangible assets - investing in Maribor and its surroundings on the basis of Article 28 of the Act on Promotion balanced regional development.

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