Transfer Pricing
Country Summary
Slovenia

This document summarizes the transfer pricing requirements and regulations in Slovenia. Slovenia is a member of the EU and OECD and aligns its transfer pricing (TP) legislation with OECD guidelines. It has implemented Country-by-Country Reporting (CbCR) requirements as per BEPS Action 13, but certain concepts like master file and local file are not yet codified. Instead, Slovenia follows the EU’s Code of Conduct on TP documentation.

Overview:

Slovenia’s Transfer Pricing Regulations

Slovenia, an EU and OECD member, follows OECD TP guidelines and has adopted certain BEPS Action 13 provisions, such as CbCR requirements. While it hasn’t incorporated master file and local file concepts into law, it adheres to EU Code of Conduct on TP documentation.

Laws & Regulations

References to OECD/EU/Local Rules: Slovenia’s Corporate Income Tax Act incorporates the arm’s length concept. The Rules on Transfer Prices apply OECD TP Guidelines to asset transfers and inter-company services for determining taxable person’s revenues and expenses.

Definition of Related Party: The Corporate Income Tax Act defines related enterprises based on ownership and control thresholds or divergent transaction terms between related and unrelated entities.

Nature of Transfer Pricing Documentation: Slovenia has CbCR requirements resembling the OECD format. However, detailed financial and IP information isn’t explicitly demanded.

Tax Havens & Blacklists: Slovenia maintains a list of non-cooperative jurisdictions in alignment with the EU.

Advance Pricing Agreement (APA): Taxpayers can request unilateral, bilateral, or multilateral APAs if specific conditions are met.

Audit Practice: Several factors increase the likelihood of undergoing a TP review in Slovenia, including losses for consecutive years, irregular net profit ratios, and transactions with related entities in tax havens.

Transfer Pricing Documentation

Level of Documentation: Slovenia adopted BEPS Action 13 requirements, with the rules applying since 2016. Less complex enterprises, including SMEs, face less stringent documentation requests compared to larger and complex enterprises.

Industry Analysis: Identifying value drivers in the relevant industry offers insights into common profitability levels.

Company Analysis: Detailed descriptions of the local entity’s management structure, business strategy, and involvement in business restructurings or intangibles transfers are essential.

Functional Analysis: This involves assessing significant activities, responsibilities, tangible and intangible assets, and risks related to intercompany transactions.

Choice of Transfer Pricing Method: Slovenia follows the “best-method rule” introduced by the OECD, giving preference to traditional transactional methods when equally reliable.

Economic Analysis – Benchmark Study: Slovenia accepts pan-European benchmarks, with the comparable market price as the median statistics.

Inter-company (IC) Legal Agreement: Legal agreements have a lower ranking since the OECD 2017 Guidelines emphasized the “conduct of parties.”

Production Process for TP Relevant Returns, Documents, Forms, and Financials: The chart demonstrates filing requirements, formats, deadlines, notification needs, and language requirements for CIT, master file, local file, CbCR, local forms, annual accounts, and segmented P&L documentation.

Notification Requirement: There’s a notification requirement for ultimate parent entities to be included in the corporate income tax return.

Record Keeping: Information not available.

Penalties and Interest Charges: Penalties for non-compliance can reach up to EUR 30,000 for legal entities and EUR 4,000 for responsible individuals, with annual interest ranging from 2% to 9%.

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