Text file: 7676.txt
author: NJ
downvotes: 1
end consideration date: 2016-08-30
id: '7676'
number comments: 7
number views: 2789
proposal type: Competent authority response
response: "Response from the Ministry of Economic Development and Technology\nThe\
  \ Companies Act (hereinafter referred to as: ZGD-1; Official Gazette of the Republic\
  \ of Slovenia No. 65/09 - officially consolidated text, 33/11, 91/11, 32/12, 57/12,\
  \ 82/13 and 55/15), which is under the competence of the Ministry of Economic Development\
  \ and Technology, lays down the basic corporate status rules for the establishment\
  \ and operation of companies, sole proprietorships, associated persons, economic\
  \ interest groups, branches of foreign companies and their status transformation.\n\
  We would like to highlight in particular the solutions introduced by the penultimate\
  \ amendment to the Companies Act (Official Gazette of the Republic of Slovenia,\
  \ No. 82/13; hereinafter: ZGD-1H) and the measures taken under the latest amendment\
  \ to the Companies Act (Official Gazette of the Republic of Slovenia, No. 55/15;\
  \ hereinafter: ZGD-1I). The amendment to ZGD-1H established an electronic platform\
  \ for verifying the limitations on the establishment of companies and entrepreneurs\
  \ and on the acquisition of business shares.\nThe restriction on the establishment\
  \ of a company or sole proprietorship and the acquisition of business interests\
  \ applies to a person:\nwho has been sentenced to a final and binding prison sentence\
  \ in the Republic of Slovenia for a criminal offence against the economy, against\
  \ labour relations and social security, against legal transactions, against property,\
  \ against the environment, space and natural goods,\nwho is publicly listed in the\
  \ list of non-payers of wage and salary slips or in the list of non-payers pursuant\
  \ to the law governing the tax procedure,\nwhich holds, directly or indirectly,\
  \ more than 25 % of the capital of a capital company which is publicly listed in\
  \ the list of non-payers of salary and wage slips or in the list of non-payers pursuant\
  \ to the law governing the tax procedure.\nThe main purpose of the concept of restrictions\
  \ on the establishment and acquisition of business holdings is to prevent the establishment\
  \ of companies and sole proprietorships and the acquisition of business holdings\
  \ by commercially dishonest natural and legal persons.\nAt the same time, in order\
  \ to prevent abuses of the registration of the business address of one or more companies\
  \ or sole traders at an address without the authorisation or knowledge of the owner\
  \ of the building, the new regulation requires the subject of the registration,\
  \ when applying for registration, to attach a certified statement from the owner\
  \ of the building authorising the sole trader or company to operate at that address.\n\
  The amendment to ZGD-1I upgrades the concept of restrictions on the establishment\
  \ and acquisition of business shares, tightens the conditions under which the minimum\
  \ share capital of a company may be interfered with, introduces additional grounds\
  \ for dissolution of companies, strengthens the system of sanctioning infringements\
  \ and some other institutes.\nThe amendment introduces three new safeguards for\
  \ incorporation. According to the safeguard in Article 10a(3), a person who has\
  \ established a limited liability company or acquired a shareholding in a limited\
  \ liability company within the last three months and who is not more than three\
  \ months old cannot become a founder or a member of a limited liability company.\
  \ The restriction does not apply if the limited liability companies will comply\
  \ with the conditions relating to TRR, tax obligations and employment.\nA further\
  \ safeguard on the establishment and acquisition of business holdings relates to\
  \ the existence of circumstances linked to offences relating to wage labour and\
  \ undeclared work. A person cannot become a founder, partner or entrepreneur if\
  \ he has been fined at least twice in the last three years by a final decision of\
  \ the Labour Inspectorate of the Republic of Slovenia or the Financial Administration\
  \ of the Republic of Slovenia for an offence related to payment for work or an offence\
  \ related to undeclared work. The restriction is valid for three years from the\
  \ final date of the judgment or the offence. The measure aims to curb abuses in\
  \ the areas of non-payment of wages and undeclared work.\nThe last new safeguard\
  \ is linked to the existence of more than 50% ownership in the capital of a limited\
  \ liability company which has been removed from the court register without liquidation\
  \ under the law governing financial management, insolvency proceedings and compulsory\
  \ winding-up. The restriction shall apply for one year from the date of the company's\
  \ removal from the register. The aim is to indirectly make management more accountable\
  \ in the running of companies and, as a consequence, to prevent the ex officio cancellations\
  \ of companies to the same extent as before.\nThe CGD-li extends the safeguard in\
  \ relation to non-filers of returns under the law governing tax procedure. Under\
  \ the ZGD-1I, the restriction applies to persons who have been published in the\
  \ list of non-returners in the last 12 months. The safeguard also applies to persons\
  \ with a direct or indirect shareholding of more than 25% in the capital of limited\
  \ liability companies.\nThe Ministry of Economic Development and Technology believes\
  \ that the measures will help to reduce the incidence of unfair business practices\
  \ in the establishment, transfer of business shares, interference with the share\
  \ capital of companies, as well as practices related to the withdrawal of natural\
  \ persons from the ownership of companies and cross-ownership of companies.\nIn\
  \ line with all the above, the Ministry of Economic Development and Technology considers\
  \ that the provisions of the current legislation (ZGD-1) are appropriate and do\
  \ not need to be amended or supplemented.\n Response from the Ministry of Finance\n\
  The Ministry of Finance considers that the deletion of business entities from the\
  \ business register for non-payment of contributions would give the deleted entities\
  \ additional opportunities for tax abuse and evasion. Deletion does not guarantee\
  \ that the deleted entity will not operate in the black. Expungement presents a\
  \ potential opportunity for a higher tax gap - tax non-compliance by unregistered\
  \ taxable persons. However, such an erasure could constitute an impermissible interference\
  \ with free economic initiative, which enjoys constitutional protection.\nAbove\
  \ all, the proposed measure would be to the detriment of insured workers, who could\
  \ end up in situations where they would not benefit from social security entitlements.\
  \ Taking into account Article 50 of the Constitution of the Republic of Slovenia\
  \ (right to social security), it is necessary to pursue solutions that do not affect\
  \ the constitutional rights of insured workers to social security. It is clear from\
  \ Article 50(2) of the Constitution that compulsory health, pension, invalidity\
  \ and other social insurance, which are regulated by the State and whose operation\
  \ is also ensured by the State, form an integral part of these human rights. Thus,\
  \ the State must endeavour to establish a system that will ensure the effective\
  \ exercise of the insured person's rights.\nFor years, the Ministry of Finance,\
  \ including the Financial Administration of the Republic of Slovenia (\"FURS\"),\
  \ has been examining ways to improve the collection of social security contributions,\
  \ making proposals for changes to the legislation that would limit circumvention\
  \ of the law and improve the efficiency of the collection of these contributions.\
  \ In order to increase the efficiency of tax and contribution collection, certain\
  \ measures have been taken in recent years, as follows: simplification of tax procedures,\
  \ extension of the powers of tax inspectors, reform of the tax information system\
  \ (e-DIS), electronic transactions by taxpayers, agreements and arrangements for\
  \ the implementation of electronic data exchange between authorities (G2G), internal\
  \ redeployment and redirection of human resources towards substantive control, establishment\
  \ of the Tax Inspection Project for Social Security Contributions, aimed at encouraging\
  \ taxpayers to correctly and timely calculate and pay social security contributions,\
  \ access by a natural person (employee) via the eTaxes system to data relating to\
  \ compulsory social security contributions (thus enabling a natural person to check\
  \ on an ongoing basis whether his employer is complying with his obligations in\
  \ terms of social security contributions calculated and paid). Natural persons who\
  \ do not have access to eTaxes can also submit a paper enquiry regarding the contributions\
  \ levied and paid. The FURS publishes a monthly list of employers who do not submit\
  \ the REK form for the payment of wages (Article 20 ZDAVP-2). Measures to improve\
  \ the collection of social security contributions include the inclusion of mobile\
  \ units in the control procedures and the reorganisation linked to the merger of\
  \ the Customs and Tax Administrations of the Republic of Slovenia into the FURS.\n\
  The Ministry of Finance and the FURS note that the problem of non-payment of compulsory\
  \ social security contributions cannot be prevented solely by the FURS performing\
  \ the tasks set out in the regulations under the competence of the Ministry of Finance.\
  \ The calculation and payment of social security contributions, and consequently\
  \ the supervision of the calculation and payment of contributions, is complex and\
  \ complicated. The first step in the control process is to establish whether the\
  \ income has been paid. The complexity of the whole system of calculation, payment\
  \ and control of social security contributions is mainly influenced by the complex\
  \ system of social insurance schemes, each of which determines the insured persons,\
  \ the bases and the persons liable for social security contributions in its own\
  \ field (both health and pension and invalidity insurance). This complexity results\
  \ in an increased administrative burden for taxpayers in both the calculation and\
  \ payment of benefits and the reporting of those benefits to the tax authority,\
  \ and in more time-consuming and complex monitoring by the tax authority.\nAccording\
  \ to the Ministry of Finance, one of the most important measures to rationalise,\
  \ increase transparency and thus more effectively control the calculation and payment\
  \ of social security contributions is to unify the insured, the bases and the persons\
  \ liable to pay social security contributions in the social insurance system. In\
  \ view of the above, the solution to the problem primarily requires changes in the\
  \ parent areas, i.e. in the Law on Pension and Disability Insurance and the Law\
  \ on Health Care and Health Insurance (these are areas under the competence of the\
  \ Ministry of Labour, Family, Social Affairs and Equal Opportunities and the Ministry\
  \ of Health).\nAccording to the Ministry of Labour, Family, Social Affairs and Equal\
  \ Opportunities, activities are already underway to harmonise the insurance bases\
  \ and insurance bases, as a special working group on the harmonisation of the common\
  \ insurance bases and insurance bases for all social insurances was established\
  \ at the Ministry of Labour, Family, Social Affairs and Equal Opportunities already\
  \ in 2014, which is expected to partially address the issues raised in this context.\
  \ This issue will be addressed in more detail in the context of the preparation\
  \ of the White Paper, which is in its final phase.\n Response from the Ministry\
  \ of Justice\nTo begin with, we consider that paid social contributions represent\
  \ an important value both from the point of view of the individual worker and from\
  \ the point of view of society or the stability of the functioning of the intergenerational\
  \ social security system. Its legal protection is tailored accordingly. Legal protection\
  \ from the perspective of the individual worker has already been presented by the\
  \ Ministry of Labour, Family, Social Affairs and Equal Opportunities in its reply\
  \ to one of the petitioner's previous petitions, which the petitioner has reproduced\
  \ in the present petition. Among other things, the worker has a mechanism of enforced\
  \ recovery (enforcement); also on the basis of pay slips as authentic documents.\n\
  The legal order is such that the contributions paid also constitute a legally protected\
  \ asset from the point of view of society. The Criminal Code (hereinafter: CC-1;\
  \ Official Journal of the Republic of Slovenia, No 50/12, 6/16, 54/15 and 38/16)\
  \ provides the legal basis for the offence of violation of the fundamental rights\
  \ of workers (Art. 196 CC-1) and the offence of violation of social security rights\
  \ (Art. 202 CC-1). On the basis of the above, the CC-1 criminalizes both the non-payment\
  \ of social security contributions and the non-payment of pension and invalidity\
  \ insurance contributions. In other words, the legal order, on the one hand, provides\
  \ for the criminal law treatment and sanctioning of offenders who have already infringed\
  \ the rules on the payment of contributions and, on the other hand, has a deterrent\
  \ effect on potential offenders in the context of the general prevention of criminal\
  \ law norms.\nV 196. Article 196 of the CC-1 provides that whoever knowingly fails\
  \ to comply with the provisions on the conclusion of an employment contract and\
  \ the termination of an employment relationship, wages and other remuneration arising\
  \ from the employment relationship, working hours, breaks, rest periods, annual\
  \ leave or absence from work, the protection of women, young people and the disabled,\
  \ the protection of workers due to pregnancy and parenthood, the protection of older\
  \ workers, the prohibition of overtime or night work or the payment of the prescribed\
  \ contributions, and thereby deprives or restricts a worker or jobseeker of a right\
  \ to which he is entitled, shall be punishable by a fine or imprisonment for up\
  \ to one year. If the act results in the unlawful termination of the employment\
  \ relationship, the unjustified non-payment of three consecutive wages or the loss\
  \ of a right deriving from unpaid contributions, the offender shall be liable to\
  \ imprisonment for a term not exceeding three years. Article 202 of the CC-1 provides\
  \ that whoever knowingly fails to comply with the social security regulations and\
  \ thereby deprives or restricts a person of an entitlement to which he or she is\
  \ entitled, shall be liable to a fine or to imprisonment for a term not exceeding\
  \ one year.\nWorkers' wages and social contributions also receive special legal\
  \ treatment in cases where the employer is unable to pay all creditors due to insolvency\
  \ (e.g. permanent illiquidity). These situations are governed by insolvency proceedings\
  \ which, in the case of bankruptcy proceedings, result in the liquidation of the\
  \ company (sale of assets) with a view to the simultaneous and proportional payment\
  \ of creditors' claims, including unpaid contributions. Ultimately, bankruptcy means\
  \ the dissolution of the economic entity (employer) and its removal from the commercial\
  \ register or the court register. With regard to the petitioner's proposal, we consider\
  \ that the mere removal of a company (employer) from the register of companies on\
  \ the ground that it does not pay its employees' contributions does not resolve\
  \ the issue of the repayment of employees as creditors.\nInsolvency proceedings\
  \ are proposed proceedings and not formal proceedings to be initiated by the court\
  \ of its own motion. The regime in the Act on Financial Management, Insolvency Proceedings\
  \ and Compulsory Winding-up (hereinafter referred to as ZFPPIPP; Official Journal\
  \ of the Republic of Slovenia, No 13/14 - Official consolidated text, 10/15 - corrected,\
  \ 27/16, 31/16 - dec. of the US and 38/16 - dec. of the US) on the one hand, contains\
  \ levers that force the debtor's authorities, upon the occurrence of its insolvency,\
  \ to start as soon as possible the implementation of the measures prescribed in\
  \ Articles 33-41 of the ZFPPIPP. One of the obligations is that the company may\
  \ not make any payments or assume any new obligations, except for those necessary\
  \ for the company's regular operations (which includes regular payment of salaries\
  \ - Article 34(2) of the ZFPPIPP). If the financial restructuring of the debtor\
  \ in the compulsory arrangement procedure is unlikely to be successful, the management\
  \ must file a full petition for the opening of insolvency proceedings within three\
  \ days (see Art. 38 of the ZFPPIPP). Article 42(42) and (42) of the ICAPL, the members\
  \ of the management and supervisory boards are liable to creditors for damages suffered\
  \ as a result of their failure to obtain full payment in the insolvency proceedings,\
  \ including for the reason that, after the insolvency situation arose, they failed\
  \ to take timely action in connection with the filing of the petition for compulsory\
  \ administration or bankruptcy proceedings. Since the amendment to the ZFPPIPP-C\
  \ (Official Gazette of the RS, No 52/10), in addition to liability for damages,\
  \ the ZFPPIPP also provides for liability for an offence in these cases, with a\
  \ prescribed fine ranging from EUR 2,000 to EUR 10,000 (see Article 489a of the\
  \ ZFPPIPP).\nOn the other hand, the current regime allows creditors to effectively\
  \ file a petition for the opening of insolvency proceedings against an insolvent\
  \ debtor. Particularly with regard to the position of employees, an amendment to\
  \ ZFPPIPP B (Official Journal of the RS, No 59/09) in 2009 introduced an irrebuttable\
  \ legal presumption of insolvency. According to Article 14(4) of the ZFPPIPP, a\
  \ debtor, i.e. an employer, is permanently illiquid and thus insolvent if it is\
  \ more than two months in arrears:\nby paying wages to employees up to the minimum\
  \ wage; or\nthe payment of taxes and contributions which the payer is liable to\
  \ levy or pay at the same time as it pays the wages to the workers,\nand such a\
  \ situation persists on the day before the opening of the insolvency proceedings.\n\
  Since the entry into force of the amendment to the ZFPPIPP-E (Official Journal of\
  \ the RS, No 47/13) (2013), employees are also exempted from making an advance payment\
  \ for the purpose of filing a petition for the opening of insolvency proceedings\
  \ against their employer on this ground (Article 233(6) of the ZFPPIPP). The legal\
  \ regime takes into account that the norms also apply to people who are less skilled\
  \ in law. Therefore, since the entry into force of the ZFPPIPP (since 2008), it\
  \ has been possible, in a systemically coherent manner, to have an insolvency representative\
  \ at the expense of the employees under the conditions set out in point 231(4) of\
  \ the Act. Article 4(4) of the ZFPPIPP also gives the Public Guarantee, Maintenance\
  \ and Disability Fund of the Republic of Slovenia the right to file a petition for\
  \ the commencement of bankruptcy proceedings, i.e. also against an employer who\
  \ is more than two months in arrears in the payment of wages up to the minimum wage\
  \ or in the payment of taxes and contributions that the payer is obliged to calculate\
  \ or pay at the same time as the payment of wages.\nClaims arising from unpaid contributions\
  \ are treated as a priority in insolvency proceedings, i.e. they are paid out of\
  \ the debtor's assets before unsecured ordinary claims in insolvency proceedings,\
  \ but are not affected by the insolvency order in insolvency proceedings. Until\
  \ this year, only unpaid contributions in the last year before the insolvency proceedings\
  \ were in this position, whereas after the latest amendment to the ZFPPIPP-G (Official\
  \ Gazette of the RS, No 27/16), according to Article 21(2) of the ZFPPIPP, this\
  \ is the case for all unpaid contributions in insolvency proceedings (not only for\
  \ the last year and not only in insolvency proceedings)."
response date: 2016-10-11
response due date: null
sent date: 2016-08-01
title: Removal of a legal person from the register for non-payment of contributions
upvotes: 25
url: https://predlagam.vladi.si/predlog/7676
