Slovenia: Tax relief for investment in digital and green transition

From 1 January 2022, all corporate taxpayers and sole entrepreneurs (except those using flat rate tax expenses to determine their tax base) are entitled to so-called tax relief for investment in digital and green transition. The legal base for it is set out in Article 55c of the Corporate Income Tax Act (slo. ZDDPO-2) and Article 65a of the Income Tax Act (slo. ZDoh-2). The specific descriptions and conditions are published in the Regulation on the application of tax relief for investments in the digital and green transition (Official Gazette of the Republic of Slovenia, No. 60/22) (hereinafter: The Regulation).

The relief is primarily intended to encourage EU companies to act responsibly in order to achieve the 2050 climate neutrality goal. The amount of the tax relief is 40% of the investment in the year of purchase, up to a maximum of the allowed taxable base. All tax reliefs together cannot reduce positive tax base for more than 63%.

The tax relief is mutually exclusive with the Tax relief for investment in R&D (Art. 55 ZDDPO-2) and the Tax relief for investment - Art. 55a (ZDDPO-2) in case the same asset or investment is involved.

The relief is not applicable to investments financed by subsidies from the national, municipal or European budgets. If the investment is only partly financed by subsidies, the relief may be applied to the extent to which the investment is financed by own resources. Own resources also include credits or loans.

The (rest of) relief for green and digital transition cannot be carried forward, which is different from the so-called Tax relief for investment - Art. 55a, which can be carried forward to the next 5 business years, but has the limitation on the holding period of the assets, which is minimum 3 years.

The taxable person submits the form for the tax relief to the tax authority together with the corporate income tax return (DDPO) or the sole entrepreneur income tax return (DDD).

The specific investments in the digital and green transition are described in more detail under this link.