On October 23rd 2019, National Assembly of the Republic of Slovenia passed the new Personal Income Tax Act (Zdoh-2V) which brings several changes to taxation of individuals. One of the changes is an increase in the tax on capital gains, dividends and interest from 25% to 27,5%.
The tax increase will impact the following income for resident individuals:
- Capital gains
- Dividends
- Interest
This change also impacts the withholding tax rate on dividends and interest paid to financial intermediaries who are not the beneficial owners of income, since according to legislation, withholding tax shall be charged, deducted and paid according to the rate defined under that taxation act which defines a higher rate of withholding tax on income paid.
The tax increase will impact the following income paid via foreign financial intermediaries:
- Dividends
- Interest on corporate bonds
The following income payments are impacted:
- Payments made to foreign financial intermediaries without the Authorised Foreign Intermediary status.
- Payments made to foreign financial intermediaries with the Authorised Foreign Intermediary status who do not disclose beneficial owners of the income.
Impact on foreign investors: Withholding tax rate on income paid to undisclosed beneficial owners via foreign financial intermediaries increases from 25% to 27,5%.The new tax rate will be applicable as of January 1, 2020.