Text file: 5862.txt
author: "Andrej \u010Cebokli"
downvotes: 2
end consideration date: 2014-06-04
id: '5862'
number comments: 3
number views: 2110
proposal type: Competent authority response
response: "Response from the Ministry of Finance\nThe taxation of gains on the disposal\
  \ of derivatives was introduced by the Law on the Tax on Gains on the Disposal of\
  \ Derivatives (Official Gazette of the Republic of Slovenia, No 65/08; hereinafter:\
  \ ZDDOIFI). The ZDDOIFI entered into force on 15 July 2008.\nThe rationale for the\
  \ drafting and adoption of the ZDDOFI was based on the Bank of Slovenia's Report\
  \ on Banking and Capital Market Developments of November 2007 and the Bank of Slovenia's\
  \ Financial Stability Report 2007, which found that Slovenian households were significantly\
  \ increasing their investments in derivative financial instruments (IFIs), among\
  \ which certificates were predominant. It was also found that the share of certificates\
  \ - structured financial instruments issued on individual shares of Slovenian blue-chips\
  \ and various indices - was also increasing, and thus their impact on prices on\
  \ the Ljubljana Stock Exchange. According to the Bank of Slovenia, the high price\
  \ growth was due, among other things, to the issuance of certificates on Slovenian\
  \ blue-chip shares. Similarly, the decline in share prices at the time was further\
  \ reinforced by the early maturity of certificates issued in Slovenian blue-chip\
  \ shares and by the sale of shares held by banks as collateral for their positions.\
  \ This increased volatility on the Slovenian capital market.\nAccording to the Bank\
  \ of Slovenia, the high interest of Slovenian households in IFIs at that time was\
  \ also due to the untaxed capital gains on IFIs. Under the capital income tax regime\
  \ at that time, interest, dividends and capital gains on the disposal of securities,\
  \ shares and investment coupons were subject to income tax, but not capital gains\
  \ on the disposal of IFIs and debt securities.\nIn view of the above, the aim of\
  \ introducing a tax on gains from the disposal of IFIs was to ensure greater tax\
  \ parity between the different types of financial investments made by individuals,\
  \ based on the principle that comparable income should be taxed approximately equally.\
  \ The aim was to have a positive impact on the Slovenian capital market, in particular\
  \ to reduce volatility on the market, by improving the tax treatment of gains from\
  \ the disposal of different financial instruments.\nThe tax on gains from the disposal\
  \ of IFIs was thus introduced as a new form of personal income tax separate from\
  \ income tax. It was stipulated that the tax would be paid at a proportional rate\
  \ of 25% (note that until the relevant provisions of the Act on Balancing Public\
  \ Finances (ZUJF) came into force, the rate was 20%). The tax rate, similarly to\
  \ the capital gains tax under the provisions of the current Income Tax Act, is reduced\
  \ every five years of holding the derivative or every five years from the conclusion\
  \ of the transaction and amounts to 15% after five years, 10% after ten years, 5%\
  \ after fifteen years and no tax is payable after twenty years. Notwithstanding\
  \ the above, in order to prevent speculative transactions which have directly or\
  \ indirectly affected the stability of the Slovenian capital market, it has been\
  \ decided that the tax on gains realised on the disposal of an IFI before the expiry\
  \ of 12 months of holding or 12 months from the conclusion of the transaction shall\
  \ be calculated and paid at a rate of 40 %.\nThe Ministry of Finance will consider\
  \ the proposals made to amend the tax legislation in the area of taxation of gains\
  \ from IFIs when preparing future amendments to the relevant legislation and will\
  \ take into account the findings of the supervision of the implementation of this\
  \ legislation, the capital market situation as well as the current public finance\
  \ framework when preparing any amendments and additions.\n "
response date: 2014-07-08
response due date: null
sent date: 2014-05-06
title: Tax reduction for IFIs
upvotes: 10
url: https://predlagam.vladi.si/predlog/5862
