Area: Finance
Competent authority: MF
EZU URL: .nan
Initiative ID: 569
Initiative accepted and completed: '2015-07-23'
Initiative classified in EZU: .nan
Initiative forwarded in response: '2015-05-20'
Initiative published: '2015-05-20'
Initiative submitted: '2015-05-14'
Response from the competent authority: 'Ministry of Finance''s response:Under the
  Income Tax Act, the taxable amount of business income is the profit determined as
  the difference between the income and the expenses incurred in carrying on the business.
  In general, the taxable amount is determined on the basis of the actual receipts
  and actual payments, the keeping of proper accounting records and the preparation
  of annual reports. Under certain conditions, however, a taxable person may choose
  to establish the tax base on the basis of actual revenue and normalised expenditure,
  on the basis of keeping certain simplified records.The system of establishing the
  tax base on the basis of actual revenue and normalised expenditure is an option
  open to taxable persons who are new to the business and to taxable persons with
  a small business (turnover from the business in the preceding tax year does not
  exceed 50 % of the taxable person''s taxable income).The above system means that
  the taxpayer may opt for an administratively simpler system in terms of tax compliance
  and for increased legal certainty in relation to the determination of the taxable
  amount, as well as for increased legal certainty in relation to the determination
  of the tax base, by increasing the legal certainty in relation to the determination
  of the taxable amount, provided that the taxpayer has had at least one full-time,
  at least five-month period of employment with the taxable person, in accordance
  with the law governing pension and invalidity insurance. The system of determining
  the tax base on the basis of standardised expenditure does not involve a purely
  flat-rate determination of the tax base and, consequently, of the tax liability,
  but only a partial flat-rate determination of the tax base. Only expenditure is
  fixed on a flat-rate basis, and even then only in relative terms, depending on actual
  income, at a rate of 80% of actual income. This means that the amount of the tax
  base and, consequently, of the tax liability, depends on the amount of the revenue
  actually generated.In view of the above-mentioned features of the current system
  of determining the tax base on business income, it can be concluded that the current
  system of personal income taxation is already aligned with the proposal. The level
  of the tax base and, consequently, the level of taxation is always also dependent
  on the level of revenue generated, and the correlation between the level of revenue
  and the tax base is even higher in the system of determining the tax base on the
  basis of normalised expenditure than in the system of determining the tax base on
  the basis of actual revenue and actual expenditure. In a system of tax base determination
  based on normalised expenditure, the higher the revenue, the higher the tax base,
  and vice versa, and the higher the income, the higher the tax base. The proposal
  also aligns the current system for determining the preliminary advance payment or
  advance payment of income tax on business income. The preliminary advance payment
  or advance payment of income tax on business income shall be determined for the
  tax year in an amount equal to the amount of the advance payment or advance payment
  of income tax according to the most recent income tax or advance payment of income
  tax on business income. The taxable person who commences an activity shall determine
  the preliminary advance payment of income tax or advance payment of personal income
  tax himself in relation to the amount of the estimated tax base of the tax year
  for which the preliminary advance payment of income tax or advance payment of personal
  income tax, as the case may be, is to be determined. It may also set it at zero.
  The provisional advance or advance payment of income tax shall be paid in monthly
  instalments if the amount of the transitional advance or advance payment of income
  tax exceeds EUR 400. If it does not exceed that amount, it shall be paid in three-monthly
  instalments. The taxpayer may also request a change in the transitional income tax
  advance if the tax base for the current tax year differs from the tax base for the
  preceding tax year.On this basis, we consider that the current regime of taxation
  of income from business activities with income tax is also appropriate for taxpayers
  who only carry out business or earn income on a seasonal basis.Response of the Ministry
  of Labour, Family, Social Affairs and Equal Opportunities:The Ministry of Labour,
  Family, Social Affairs and Equal Opportunities (MLSAE), in relation to the petition,
  would like to start by explaining that the parent company law, which regulates the
  status-law aspect of the institution of a "sole proprietorship" (hereinafter: sole
  proprietorship), does not provide for the so-called "sole proprietorship". "Taking
  into account the uniform regulation of self-employed persons in the Companies Act,
  the Pension and Disability Insurance Act (Official Gazette of the Republic of Slovenia,
  No. 96/12, 39/13, 99/13 - ZSVarPre-C, 101/13 - ZIPRS1415, 44/14 - ORZPIZ206, 85/14
  - ZUJF-B and 95/14 - ZUJF-C, hereinafter referred to as "ZPIZ-2") follows the legislation
  of the home country and classifies as compulsorily insured persons persons who in
  the Republic of Slovenia (or abroad registered in a special register) independently
  carry out a gainful activity or other permitted activity (so-called self-employed
  persons) (Article 15 of ZPIZ-2). Under the ZPIZ-2, these persons are covered by
  insurance for full-time.   We further explain that the regulation of compulsory
  pension and invalidity insurance for self-employed persons and the consequent obligation
  to pay contributions under this title was the result of the social dialogue conducted
  during the adoption of the ZPIZ-2, which entered into force on 1 January 2013. The
  social dialogue process highlighted the burdens of self-employed persons and ways
  to reduce these burdens while promoting entrepreneurship. Thus, in Article 145,
  the ZPIZ-2 regulated for insured persons who do not receive a salary (in addition
  to self-employed persons, this category of insured persons also includes partners
  who are also managers and farmers) a modified way of determining the insurance base
  on which contributions for pension and invalidity insurance are paid. The amended
  method of determining the insurance bases means that the insurance bases under the
  ZPIZ-2 are no longer determined in such a way that they are classified according
  to the profit into one of the eight insurance classes, as was the case under the
  previous law (hereinafter: ZPIZ-1), but the insurance base is determined individually
  according to the insured person''s established profit. At the same time, the ZPIZ-2
  introduced a special feature in the determination of the profit for the purpose
  of determining the insurance base only for self-employed persons, which is intended
  not only to promote entrepreneurship, but also to preserve entrepreneurship and
  to promote competitiveness and innovation of self-employed persons in the labour
  market. This innovation in the area of contributions means that only the self-employed
  are allowed to "discount" their profits for the purposes of establishing the insurance
  base. Thus, self-employed persons could have their profits reduced by 30% in 2014,
  by 28% in 2015 and by 25% after the end of the transitional periods (2016 and onwards),
  which means that self-employed persons can pay lower contributions than other insured
  persons who also do not have a salary (e.g. partners and farmers). The ZPIZ-2 also
  introduced a new relief for "new" self-employed persons, the so-called "new" self-employed
  persons. A new "partial exemption from the contribution of the insured person and
  the contribution of the employer". Self-employed persons are thus exempted from
  paying the "insurer''s" and the "employer''s" contribution of 50% of the amount
  of the contribution during the first 12 months of their business activity after
  their "first" entry in the business register or in another register or register,
  and 30% of the amount of the contribution during the following 12 months.It should
  be mentioned that ZPIZ-2 also continues to exempt, in the same way as ZPIZ-1, s.p.s.
  - s.p. from paying the "insurer''s" and the "employer''s" contribution.allows for
  a reduction of the insured base if the insured person considers that the insured
  base does not correspond to the expected profit for the current year. In order not
  to jeopardise the continuation of the business, the insured person may, in accordance
  with Article 145(10) of the ZPIZ-2, pay contributions from the insured base reduced
  by a maximum of 20%, but at least from the minimum insured base, in the future.
  In the light of the above, we consider that the ZPIZ-2 already provides for benefits
  which reduce the burden on self-employed persons in the legal form of a s.p. as
  known under the law governing companies. At the same time, it should also be borne
  in mind that "contributions from pension and invalidity insurance", as a withholding
  tax, are fundamentally different in their legal nature and purpose from taxes, since
  the insured person, as a result of the contributions paid, exercises or is granted
  rights under the system when an insured event (e.g. disability) occurs. Since the
  pension system is a pay-as-you-go system, financed by the revenue from the contributions
  collected, any reduction in the contributions collected would result in a deficit
  in the pension coffers, with a concomitant increase in the need to cover the funds
  from solidarity or the State budget.Response from the Ministry of Health:It can
  be inferred from the foregoing that the initiative deals with sole proprietorships
  (s.p.), which are engaged in an activity that, in the opinion of the petitioner,
  is not equally attractive or profitable (does not generate profits) throughout the
  year. Sole proprietors are compulsorily insured under Article 15(5)(1) of the Law
  on Health Care and Health Insurance (Official Gazette of the RS, No. 72/06 - Official
  consolidated text, 114/06 - ZUTPG, 91/07, 76/08, 62/10 - ZUPJS, 87/11, 40/12 - ZUJF,
  21/13 - ZUTD-A, 63/13 - ZIUPTDSV, 91/13, 99/13 - ZUPJS-C, 99/13 - ZSVarPre-C, 111/13
  - ZMEPIZ-1, and 95/14 - ZUJF-C; hereinafter: ZZVZZ) or are engaged in the activity
  as a secondary occupation (they are covered by compulsory insurance under the employment
  relationship). Regardless of the basis of insurance, all persons liable to pay monthly
  contributions must do so on the assumption that they are engaged in gainful employment.The
  Ministry of Health has previously taken the position that an activity which has
  a statutory time limit for its exercise is subject to a contribution for compulsory
  health insurance only for the time during which the activity is actually carried
  out (e.g., for the period during which the person is engaged in the activity, the
  person is liable to pay a contribution for compulsory health insurance for the period
  during which the person is actually engaged in the activity). However, since the
  specific initiative does not concern a statutory limitation of the duration of the
  activity, but rather so-called seasonal activities, which are carried out for profit
  only for part of the year, the initiative is not justified.'
Text file: 569.txt
Title: Relief for seasonal entrepreneurs
URL: https://www.stopbirokraciji.gov.si/pobuda/?st=569
