Text file: 9655.txt
author: ds1
downvotes: 1
end consideration date: 2019-01-02
id: '9655'
number comments: 2
number views: 685
proposal type: Competent authority response
response: "Response from the Ministry of Finance\n\nPrior to 2006, personal income\
  \ tax in Slovenia was payable on all income earned by individuals, regardless of\
  \ where it was received, at progressive tax rates and subject to tax deductions.\
  \ With effect from the 2006 tax year, Slovenia moved away from this concept of synthetic\
  \ or global personal income tax on all personal income. A system was introduced\
  \ whereby certain income is subject to income tax at a proportional rate without\
  \ taking into account tax deductions - ceded taxation. Such taxation generally applies\
  \ to capital income or passive income such as interest, dividends, capital gains.\
  \ At the end of 2012, the amendment to the ZDoh-2L also introduced the ceded taxation\
  \ for rental income (it became applicable as of 1 January 2013). The amendment to\
  \ the law thus provided that rental income is subject to income tax at a proportional\
  \ rate (25%), the same as previously applied to capital income, and no longer at\
  \ progressive rates.\n\nWith regard to the costs of investment in the property,\
  \ we would like to clarify that, in accordance with Article 77(1) of the Income\
  \ Tax Act, the taxable amount of rental income is the normalized cost of 10% of\
  \ the income (rent). However, in accordance with Article 77(2) of the same Article,\
  \ the taxpayer may claim the actual costs of maintenance of the property, which\
  \ maintains the use value of the property, which are borne by the taxpayer himself\
  \ in respect of the property rented out to the taxpayer. In this way, the rental\
  \ income is reduced by those costs, which also reduces the taxable amount. The cost\
  \ of the maintenance is thus already reflected in the individual's tax liability.\
  \  \n\nThe current tax treatment of rental income follows the principle of equal\
  \ tax treatment, as individuals who derive rental income from renting out property\
  \ (whether in Slovenia or outside Slovenia) and who are in substantially the same\
  \ situation are treated in the same tax treatment. The proposal to determine the\
  \ rate of taxation of rental income on the basis of the location of the property\
  \ departs from this principle, as it is based on a differentiating circumstance\
  \ (location) which would result in individuals with such income who are in a substantially\
  \ similar situation being treated differently without a rational and realistic reason.\
  \ The proportional tax rate taxes all rental income in the same way, with the absolute\
  \ amount of an individual's tax liability depending on his tax base on the rental\
  \ income (NB the 'quality' of the property and its location may also affect the\
  \ amount of income). A higher tax base thus represents a higher absolute amount\
  \ of an individual's tax liability and vice versa.\n\nFor the above reasons, we\
  \ are not in favour of the proposal to tax rental income at different rates (depending\
  \ on the location of the property). Such partial interventions in the income tax\
  \ system are also not appropriate from a systemic point of view, as they interfere\
  \ with the neutrality of the tax system."
response date: 2019-02-05
response due date: null
sent date: 2018-12-12
title: tax reduction
upvotes: 17
url: https://predlagam.vladi.si/predlog/9655
