OASIS
ORGANIZATION OF ADVOCATES SPECIALISING IN INTERNATIONAL SERVICES
SLOVENIA 2010/2011
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ORGANIZATION OF ADVOCATES SPECIALISING IN INTERNATIONAL SERVICES SLOVENIA 2010/2011
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SLOVENIA DEVELOPMENTS 2010/2011 Goran Kanalec, Kanalec Juzina Attorneys Slovenian legal developments in 2010/2011 in majority are still under the impression of the ongoing economic global crisis and as such, a part of the so called exit crisis strategy legislation that aims at improvement of the market situation and recovery from the downfall. In public, the most controversial topic have been the intended changes of labour market and social security legislation, whereas in economic legislation the adopted changes regard measures for protection against and improvement of unhealthy market conditions.
LABOUR MARKET AND SOCIAL SECURITY LEGISLATION The labour market and social security legislation, in particular the pension and disability insurance, were widely and heatedly discussed in public last year which has been reflected in this year’s successive referendums regarding the proposed legislation changes. Series of referendums are also a reflection of the weak position of the Slovene government which from April 2011 has merely a minority in the Slovenian Parliament. Among adopted acts concerning labour market and social security the only act which has been accepted by the public has been the LABOUR MARKET REGULATION ACT which has ensured more rights for employment seekers (the most important has been a more favourable regulation of the entitlement to unemployment allowance) and new active employment policy measures, such as job sharing and job rotation. The rest of the labour acts adopted or amended last year – MINI JOBS ACT, which would regulate temporary forms of work in a more flexible way, PREVENTION OF ILLEGAL WORK ACT, which would inter alia forbid gratuitous mutual aid if person performs such work as an economic activity and the new PENSION AND DISABILITY INSURANCE ACT which raises the retirement age, have all been a subject of referendums. Mini Jobs Act already failed to pass the referendum in April 2011, the other two referendums will follow in June 2011.
In May 2010, Slovenia adopted a new Public Sector Integrity Act. Newness; v Anti-Corruption Commission
- New structure and duties of the Commission – the Commission is now a minor offence authority; - Commission’s Opinions of Principle are now serviced to a person under consideration to give its reply report.
v Mandatory anticorruption clause in contracts with public sector Contracts concluded with public sector of more than 10.000,00 EUR value without a mandatory anticorruption clause with legally prescribed text, are void. A public body is (upon recognition of a corruption act in a contractual relationship) obliged to start the invalidity proceeding of such contract.
v Protection of identity of the notifier If a corruption notification has been given in good faith, the Commission must not seek or reveal the identity of the notifier.
v Supervision of assets The Anticorruption Commission supervises the property status of subjects of public sector and keeps a register thereof. The Act has expanded the circle of persons responsible to report to the Commission about the increase of property during the execution of their public function. (!) Additionally, notwithstanding the restrictions laid down by the law on protection of personal data and tax secrecy, the data on income and property of persons under obligation and persons responsible for public procurement shall be publicly available in the part relating to the income and property acquired in the period of the holding of public office or activity and one year after the cessation thereof.
In April 2011, the Constitutional Court withheld the execution of the aforementioned provision until it decides whether such rule represents an excessive intrusion of privacy as persons responsible for public procurement (that is for giving out orders, evaluation of bids, examination of tender documentation, propose the selection of the tenderer,…) are not public persons and the purpose of income and property reporting, which is transparency, can be achieved also if the change of property is known merely to the Anti-Corruption Commission and not also to the general public.
v Lobbying Lobbying activities may only be performed by a domestic or foreign natural person entered in the register of lobbyists in the Republic of Slovenia which is kept by the Commission and is publicly available. The persons lobbied can accept a contact with a lobbyist only after they have verified that such person is in the register, whereas lobbyist shall need to specify the purpose and objection of lobbying. Lobbyist shall report about their work to Anti-Corruption Commission. There are sanctions prescribed for wrongful lobbying (a written admonition, a ban on lobbying and deletion from the register).
ACT ON PREVENTION OF LATE PAYMENTS In March 2011 Slovenia has already implemented the Directive 2011/7/EU of the European Parliament and of the Council of 16 February 2011 on combating late payment in commercial transactions. Beside prompt implementation of the provisions of the Directive, the Act of Prevention of Late Payments has - with practically zero vacation legis - set down some even stricter rules to assert payment discipline:
v Determination of the absolute maximum payment period to 120 days Relative maximum payment period can exceed 60 calendar days (30 days for public authorities) if expressly agreed in the contract and provided it is not grossly unfair to the creditor. The absolute maximum payment period is not determined within the Directive, however, the Slovene Act on Prevention of Late Payments has set it at 120 calendar days.
v Multilateral off-set Act on Prevention of Late Payments defines multilateral off-set (compensation) as a form of terminating reciprocal financial obligations. However, from a legal point of view, a multilateral off-set should not be confused with the (bilateral) off-set as regulated by The Code of Obligations. The multilateral off-set is missing the reciprocity – the contracting parties are not simultaneously one versus other debtor and creditor which is a condition for an off-set and a legal consequence of an off-set – extinction upon encounter. Act on Prevention of Late Payments introduces: - voluntary multilateral off-set, in which debtors may participate if they desire to; - compulsory multilateral off-set, which has been introduced in Slovenia already in years 1991 – 1994.
Compulsory multilateral off-set When a delay occurs the debtor must report its financial obligation electronically in the first round of a compulsory multilateral off-set. The debtor does not have to report a financial obligation: - insured by an instrument for insurance of payments, - related to a litigation in front of a competent court or an execution procedure.
The rest of the due financial obligation which debtors could not offset in the first round of the compulsory multilateral off-set may be paid in different ways, including a re-entry of the financial obligation in a multilateral off-set.
When debtors enter a financial obligation into a compulsory multilateral off-set, they lose the right to object to an order on fiscal execution in accordance with the provision of the Tax Procedure Act regarding the objection of debtor’s debtor.
The prescribed fine for debtors who do not enter their financial obligation in compulsory multilateral off-set is up to 10.000 EUR for business entities and up to 5.000 EUR for responsible persons of business entities.
The Agency of the Republic of Slovenia for Public Legal Records and Related Services as a temporary administrator of multilateral off-sets system will execute compulsory multilateral off-set once per month - first compulsory multilateral off-set has already been executed on April 15th, 2011.
v Introduction of a public register for bills of exchange protested due to non-payment
Even though the Bill of Exchange Act is already familiar with the register of protested bills of exchange kept by the Chamber of Notaries of Slovenia, the Act gives the new register additional quality – public and available data on the register’s administrator’s webpage (so called “black list” – publicly published bills of exchange protested due to non-payment, which is an opposite approach to that proposed by the Directive – publication of the list of fast payers). The newly introduced register is without prejudice to the bills of exchange management areas the Haag conventions have tried to internationally unify and therefore does not violate Slovenian international obligations. The register of bills of exchange protested due to non-payment will be established three months after the law enforcement, i.e. June 16th, 2011.
TAX LEGISLATION
VALUE ADDED TAX ACT AMENDMENT
v Exemption at the import of goods if the goods are going to another Member State
The amendment lays down conditions for exemption from VAT on imports followed by the supply or transfer of goods within the Community. This is a simplified procedure for taxpayers who are without a place of establishment in Slovenia according to which such taxpayers at the time of importation of goods into Slovenia are not required to pay VAT on imported goods if they can prove that the goods shall be conveyed to the recipient in another Member State. According to the general legislation such taxpayers would be charged VAT on imported goods and could claim a deduction of VAT and request its reimbursement after the VAT account. With the supply or transfer of goods to another Member State thus they could rely upon exemption from VAT on the supply of goods to another Member State.
Important! To rely upon the exemption such importer must prove, at the time of importation, to the competent customs authority that the imported goods are intended to be transported or dispatched from Slovenia in another Member State. v Joint and several liability of the buyer
Buyers can be jointly and severally liable for VAT payment beside suppliers where objective circumstances show that buyers knew or should have known that they are taking part in a transaction intended to avoid paying VAT. PERSONAL INCOME TAX ACT AND CORPORATE INCOME TAX ACT The amendment to the laws on personal income tax and corporate income tax introduces a new incentive for employment prospects while increasing general tax relief for investment in research and development.
Moreover, the Personal Income Tax Act and Corporate Income Tax Act have increased the general relief for investment in research and development with the current 20 % to 40 % of the amount of investment in research and development.
TAX PROCEDURE ACT v Assurance of payment discipline of taxable persons Due to late payment of a tax instalment, all consequential instalments fall due on the day that the unpaid instalment was due. v Interest Until now, only taxable persons who were unduly or too much taxed could claim interest to their tax paid. Now, interests can be claimed even if a claim for refund has been unduly rejected by the tax authorities. Interest on debt securities of companies for non-residents will no longer be taxed, while for the residents a different way of collecting the tax is prescribed. This will reduce the cost of issuing debt securities and to facilitate access to finance.
FINANCIAL OPERATIONS, INSOLVENCY PROCEEDINGS AND COMPULSORY DISSOLUTION ACT
Amendment of the Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act brings changes with regard to the increase of efficiency of procedures, improvement of the creditor status, possibility of fresh capital flow in companies that are in an insolvency proceedings and better organization of the work of official receivers in insolvency proceedings.
v Capital increase of the insolvent company by its creditors In 4 months after the beginning of the compulsory composition of the insolvent company, the Creditor Board can decide to increase the capital of its debtor with new contributions of capital. v Improvement of status of creditors and creditor board The Creditor Board can set its meetings outside of the seat of the court where the insolvency proceeding is in course. v Deletion of one year unpaid taxes from the prior claim list This will increase the amount of bankrupt estate for the benefit of the creditors. v Changes in organization of official receivers - Establishment of the Chamber of Official Receivers that will continuously educate receivers, give them recommendations for good practices; - Determination of disciplinary liability and procedure against official receivers; - Bankruptcy procedures of bigger legal persons can be conferred only to official receivers with more than two years of practice. v Possibility of civil debtor of bankruptcy to start business as an entrepreneur or private undertaking
The court can decide to allow “fair” civil debtors of bankruptcy to start a business if it can be evaluated with more than 50 % probability that they did not intentionally cause their insolvency and that they shall not do business with loss of profit. Against payment of fee, the court can upon debtors’ proposal allow also an exemption of plant and machinery supplies of material and other debtors’ property except real estate from a bankruptcy mass to enable them their business.
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Organization of Advocates Specialising in International Services
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