Area: Finance
Competent authority: MF
EZU URL: .nan
Initiative ID: 529
Initiative accepted and completed: '2015-04-16'
Initiative classified in EZU: .nan
Initiative forwarded in response: '2015-04-03'
Initiative published: '2015-04-03'
Initiative submitted: '2015-04-03'
Response from the competent authority: 'Response from the Ministry of Finance:The
  Labour Relations Act (Official Gazette of the Republic of Slovenia, No 21/13 and
  78/13; hereinafter: ZDR-1) regulates employment relationships, which are concluded
  by means of an employment contract between an employee and an employer. The ZDR-1
  regulates the employment relationship and the rights and obligations arising from
  it. The ZDR-1 provides for remuneration for work and, in this context, Article 130(1)
  requires the employer to provide the employee with reimbursement of the costs of
  transport to work. The employment relationship is therefore subject to a special
  regime laid down in the ZDR-1 as the systemic regulation governing employment relationships.The
  subcontract is a civil law contract, laid down in the Code of Obligations (Official
  Journal of the Republic of Slovenia, No 97/07 - Official Consolidated Text; hereinafter:
  ''the OZ''). Article 619 of the OZ provides that, by means of a subcontract, the
  subcontractor undertakes to carry out a specific transaction and the principal undertakes
  to pay the subcontractor for that performance. The Income Tax Act (Official Journal
  of the Republic of Slovenia, No. 13/11 - Official Consolidated Text, 24/12, 30/12,
  40/12 - ZUJF, 75/12, 94/12, 96/13, 50/14 and 23/15; hereinafter: ZDoh-2), which
  regulates the taxation of income of natural persons, also regulates the taxation
  of income from employment.The Income Tax Act (Official Journal of the Republic of
  Slovenia, No. 13/11 - Official Consolidated Text, 24/12, 30/12, 40/12 - ZUJF, 75/12,
  94/12, 96/13, 50/14 and 23/15; hereinafter: ZDoh-2), which regulates the taxation
  of the income of natural persons, regulates the taxation of employment income. Any
  dependent contractual relationship entered into by a natural person in the performance
  of physical and intellectual work, including the provision of services and the creation
  or performance of a work of authorship, irrespective of its duration, is considered
  to be employment (Article 35(2) ZDoh-2). According to Article 36(2) of the Income
  Tax Code, income from employment is considered to be 1) income from an employment
  relationship and 2) income from another contractual or other relationship.In defining
  income from employment, the tax legislation follows the law regulating employment
  relationships and determines the tax treatment of the said income. Income from an
  employment relationship also includes reimbursement of work-related expenses (Article
  37(3)(1) ZDoh-2). Article 44(1)(3) of the Income Tax Code provides that reimbursements
  of work-related expenses, including transport costs to and from work, are not to
  be included in the taxable amount of income from an employment relationship, up
  to a certain amount. The income tax base for income from an employment relationship
  is the income from the employment relationship less the compulsory social security
  contributions which the employee is obliged to pay under special regulations (Article
  41(1) ZDoh-2).Under ZDoh-2, income received under a subcontract is considered income
  from another contractual relationship. Income from another contractual relationship
  includes any individual income for work or services rendered (Article 38(1) ZDoh-2).
  The taxable amount of such income is the individual income less the compulsory social
  security contributions payable by the employee under the special rules and the standardised
  expenses of 10% of the income. In addition to the normal costs, the actual costs
  of transport and accommodation incurred in connection with the performance of work
  or services may also be claimed, on the basis of supporting documents and up to
  a certain amount (Article 41(4) ZDoh-2). A resident taxable person may claim actual
  expenses in an objection to the informative income tax calculation, whereas a non-resident
  taxable person may claim them within seven days of the payment of the income (Article
  289 of the Tax Procedure Act (Official Journal of the RS, No 13/11 - official consolidated
  text, 32/12, 94/12, 101/13 - ZDavNepr, 111/13, 25/14 - ZFU, 40/14 -ZIN-B and 90/14);
  hereinafter referred to as "ZDavP-2").As a result, any income received under a subcontract,
  including that part of the income which may relate to the reimbursement of work-related
  expenses, is taxable as income from another contractual relationship. The category
  of reimbursement of work-related expenses in such relationships is not provided
  for by law (as is the case for employment relationships) and can therefore only
  be the subject of a contractual agreement between the parties entering into a contractual
  relationship with each other under the provisions of the CC, rather than a specific
  statutory treatment in tax law. However, in order to comply with the principle of
  approximately equal tax treatment of taxable persons in approximately equal economic
  circumstances, the tax legislation provides for a solution whereby taxable persons
  who obtain agreements from other contractual relationships (and incur certain costs
  in connection with the obtaining of such income) are granted a reduction of 10%
  of the tax base (normal costs) when determining their tax liability on an annual
  basis, and are also allowed to claim actual costs (in an objection to an informative
  calculation of personal income tax) insofar as they exceed the amount of the normal
  costs.On the basis of the above, we would like to clarify that the Income Tax Code-2
  and the Income Tax Code-2 do not provide for a right to reimbursement of expenses
  in the case of a subcontracting arrangement and therefore reimbursement of expenses
  in the proposed manner would be contrary to the provisions of the Income Tax Code-2
  and the Income Tax Code-2. However, it should be noted that it should be verified
  whether, in view of the economic and legal substance of the relationship, a subcontract
  is the appropriate legal basis, or whether it may not be an employment relationship
  under the ZDR-1 and an employment contract should be concluded under the ZDR-1.'
Text file: 529.txt
Title: Travel expenses of an external collaborator
URL: https://www.stopbirokraciji.gov.si/pobuda/?st=529
