Executive Summary
General Requirements
- The arm’s length principle is codified in Article 16 of the Corporate Income Tax Act (CITA-2) and is interpreted using the OECD Transfer Pricing Guidelines.
- Regulations apply to both cross-border and domestic transactions between associated enterprises, with associated status triggered by a 25% or greater direct or indirect ownership interest.
- Domestic transactions are subject to transfer pricing documentation requirements if one party is in a beneficial tax position, such as having tax losses or a 0% tax rate.
- Associated enterprises also include entities where one party controls business decisions through a contract or where familial ties up to the second degree exist between controlling individuals.
Documentation Requirements
- Slovenia mandates a three-tiered documentation framework consisting of a Master File, a Local File, and a Country-by-Country (CbC) Report.
- Transfer pricing documentation must be prepared contemporaneously within three months of the end of the financial year to support the annual tax position.
- Taxpayers must disclose detailed related-party transaction volumes in Annexes 15 and 16 of the annual corporate income tax return.
- Documentation must be finalized by the time the corporate income tax return is due, although it is typically only submitted to the tax authority upon a formal request during an audit.
Results of Non-Compliance
- Failure to submit requested documentation in the prescribed manner can result in fines of up to EUR 30,000 for medium and large entities and up to EUR 4,000 for the responsible person.
- If transfer prices fall outside the arm’s length range, the tax authorities generally adjust the results to the median value of the range.
- Non-compliance with the arm’s length principle may lead to adjustments being treated as hidden profit distributions, which are subject to a 15% withholding tax.
- Inadequate documentation increases the risk of an unfavorable shift in the burden of proof, allowing authorities to disregard the taxpayer’s methodology during an audit.
Country Specific Information
- The thin capitalization rule was abolished as of 1 January 2025 and replaced by an interest limitation rule that caps net borrowing costs at the higher of EUR 3 million or 30% of EBITDA.
- Safe harbor interest rates for related-party loans are determined annually by a Rulebook issued by the Ministry of Finance.
- Audit priorities emphasize permanent establishment profit distribution, royalty payments, and limited-risk entities carrying forward significant tax losses.
- While documentation may be prepared in English, the tax administration reserves the right to request a translation into Slovenian within a minimum 60-day deadline.
Compliance Table
| Document | Deadline | Language | Thresholds, Scope & Penalties |
| Local File | Must be ready by tax return deadline (3 months post-FY); submit on request within 30–90 days. | Slovenian (English may be submitted but translation can be demanded). | Threshold: No materiality threshold, but transactions <EUR 50,000 are exempt from detailed reporting in tax return. Scope: Cross-border and relevant domestic. Penalty: Up to EUR 30,000. |
| Master File | Must be ready by tax return deadline (3 months post-FY); submit on request within 30–90 days. | Slovenian (English usually accepted but translation can be demanded). | Threshold: Mandatory for all entities in scope of TPD. Scope: Global group overview and transfer pricing system. Penalty: Up to EUR 30,000. |
| CbC Notification | 31 March (filed as an appendix to the annual corporate income tax return). | Slovenian. | Threshold: Entities of groups with consolidated revenue >= EUR 750M. Penalty: Up to EUR 30,000 for the entity and EUR 4,000 for the person. |
| CbC Report | 12 months from the end of the reporting financial year. | English or Slovenian. | Threshold: Ultimate parent of MNE group with consolidated revenue >= EUR 750M. Penalty: Up to EUR 30,000 for the entity and EUR 4,000 for the person. |
| Other (Annex 15/16) | 31 March (submitted with the annual corporate income tax return). | Slovenian. | Threshold: Cumulative annual turnover with a single related party > EUR 50,000. Scope: Detailed summary of related-party dealings. Penalty: General CIT return penalties. |
Disclaimer: This information is obtained from secondary sources and is included for informative purposes. It should be confirmed by a local advisor.
