On 4 October 2026, the Slovenian Government formally approved the state budgets for fiscal years 2025 and 2026, marking a significant milestone in the country’s fiscal planning. The budget package, prepared by the Ministry of Finance, incorporates a series of tax policy measures aimed at enhancing competitiveness, supporting green transition, and aligning with OECD Pillar Two guidelines. Key provisions include a reduction of the corporate income tax rate from 22% to 19%, the introduction of a digital services tax targeting large multinational enterprises, and expanded R&D tax credits to stimulate innovation. The budget also extends the temporary VAT reduced rate for energy products and introduces a new carbon pricing mechanism for industrial emitters. These measures are set to take effect from 1 January 2025, pending parliamentary ratification. The Ministry estimates that the tax package will reduce the overall tax burden on businesses by approximately €320 million annually, while the DST and carbon pricing are expected to generate €85 million in new revenues. The budget further includes provisions for the transposition of the EU’s DAC8 directive on crypto-asset reporting and the implementation of the global minimum tax under Pillar Two, effective for fiscal years starting on or after 31 December 2025.
Key Takeaways
- Corporate Tax Rate Cut: The headline corporate income tax rate will be lowered to 19%, bringing Slovenia in line with regional peers and improving the investment climate. The change applies to all resident companies and permanent establishments, with anti-avoidance rules to prevent profit shifting. The reduced rate will be complemented by a limitation on interest deductibility to 30% of EBITDA, in line with the EU Anti-Tax Avoidance Directive (ATAD).
- Digital Services Tax (DST): A new 3% DST will apply to gross revenues from digital advertising, online marketplaces, and user data monetization for companies with global revenues exceeding €750 million and domestic revenues above €5 million. The DST is designed as an interim measure until the OECD Pillar One framework is implemented. Taxable entities must register with the Financial Administration of the Republic of Slovenia (FURS) by 31 January 2025 and file quarterly returns. The measure includes a safe harbor for startups and SMEs meeting specific criteria.
- Enhanced R&D Incentives: The budget expands the existing R&D tax credit from 40% to 50% of qualifying expenditures, with a cap of €1 million per taxpayer annually. Additional super-deductions are available for green technology research and collaboration with universities. The definition of qualifying R&D expenditure is broadened to include software development for internal use and cloud computing costs directly linked to research activities. Companies must maintain detailed documentation to substantiate claims, subject to FURS audit.
- Carbon Pricing and Green VAT: A national carbon levy of €25 per tonne of CO2 equivalent will apply to industrial installations not covered by the EU ETS, phased in over three years. Simultaneously, the reduced VAT rate of 9.5% for electricity, natural gas, and district heating is extended until 31 December 2026 to mitigate energy cost pressures on households and SMEs.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement