Deductible LTD – what is it and type of taxation

Deductible LTD - what it is and type of taxation

Deductible Ltd (limited liability company) and service activities

Deductible Ltd is same as every other type of company. The difference from others is the type of taxation. In essence, a deductible Ltd does not pay tax on its profits, but on a base of deductible expenses. To be precise, these are 80 % of revenue, but with limits if the Ltd does not have employees. Moreover, the tax rate is 19 %. Does this help you? Do you want to open Ltd? You can consult our business or tax advisors to help you with the process. If you want to find out more, you can call us on +386 40 530 718 (Viber/WhatsApp) or email us at

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Tax base – based on actual costs

Most companies calculate their tax liability on the basis of the profits they make. That is the positive difference between total revenue (operation, financial) and total expenses (operation, financial). All categories are properly determined by taking into account the but also the the tax legislation. If a company makes a loss, or if its expenses are higher than its income, it generally does not pay tax. However, the profits or losses do not directly affect the tax calculation. Do you know if deductible Ltd fits your business idea? Do you consider to open one? Need more information about taxes in Slovenia? Don’t hesitate to contact us!

For example, this is the usual calculation of taxes with actual costs:

  • Revenue €80,000
  • Expenditure €70,000
  • Operating profit €10,000
  • Investment tax credit €1,000
  • Tax base €9,000
  • Tax (19%) €1,710

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Tax base – based on deductible expenditure

Those companies that do not make significant costs and expenses in their operations generally consider the tax option. The deductible Ltd is definitely more suitable for service activities without significant investments. For instance, these include consultancy activities, e-learning, design, IT services. Moreover, in other activities a deductible Ltd is not the appropriate type because of the different tax base on costs of material or goods. You can keep the status of a deductible Ltd if it does not go above €150,000 for a single year. Moreover,  the maximum expenditure is €80,000 if there is one fully insured person in the deductible Ltd for at least five months. Otherwise, a deductible Ltd without employees can go up to €40, 000 of deductible expenses.

Example of tax calculation when deductible expenditure are taken into account:

  • Income €80,000
  • Actual costs and expenses €50,000
  • Operating profit €30,000
  • Deductible expenditure (80,000 * 80%) €64,000
  • Tax base €16,000
  • Tax (19%) €3,040

And don’t forget to check out our free salary calculator!

Forecast of changes for deductible s.p., but not for Ltd

Last but not least, there is an announcement for changes for next year regarding the taxation of deductible s.p. In that case, it is better to think about opening Ltd. Do you find this information useful? Still have dilemmas? Don’t worry! You can easily contact our tax advisors about this option! For more information, just call us on +386 40 530 718 (Viber/WhatsApp) or email us at Our experts at DATA will be happy to help you. We have respectable experience of 30 years. We help and guide new entrepreneurs start their business in Slovenia! Also, you can follow our Facebook profile to find more about our work!

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