Entrepreneurs who do business in Europe often ask about the conditions to enter the VAT system. While we have already explained the subject in our previous articles, we wanted to emphasize the differences for entering the VAT system when there are several related parties.
Do you want to start a business in Slovenia? Are you also having trouble understanding what is best for the success of your business? Apply for our free webinar on company registration and business immigration!
Call our experts on +386 1 6006 270, Viber/Whatsapp +386 40 530 718 or write to us on [email protected]
Data d.o.o. has been offering support to foreign citizens with their business in Slovenia. In addition to company registration services, we also provide professional accounting services. Additionally, we also have specialized legal advisors that support business owners with every aspect of business Slovenian legislation. Also, you can follow us on Facebook.
What are related parties?
Related party is a term which the Slovenian legislation determined in the Corporate Income Tax Act (ZDDPO-2). Two entities are related parties if they are owned by the same natural or legal entity or their close family members with a share of at least 25%. A close family member can be a spouse, the ancestor or descendants or their spouses, brothers and sisters or half-brothers and half-sisters, and adopted children.
Are you considering opening a company in Slovenia and buying real estate? Apply for our free webinar on this topic here:
When do you have to regsiter for VAT?
The conditions do not necessarily have to be met cumulatively, so in order to enter the VAT system, the fulfillment of the conditions for each taxable person is determined separately:
- the taxpayer has exceeded or is likely to exceed the taxable turnover in the amount of 50,000 euros (for farmers, the cadastral income is important, which may not exceed 7,500 euros) in 12 months
- purchases of goods in other EU countries do not exceed 10,000 euros in the current calendar year
- the taxable person provides services for a client, company / entrepreneur with a valid VAT number, from another EU Member State
- the taxable person receives services for the client, company / entrepreneur with a valid VAT number, from another EU Member State
When are the conditions for entering VAT system with related parties met?
When the legislation determines the related parties, it can also influence whether just one of the related parties has to enter the VAT system or both. The tax office mostly checks if the related parties are not providing the same business activity. When they are offering similar services, you would need to prove that they are not related in terms to benefit from a better taxation system or avoid paying taxes.
We will explain these conditions on an example of related parties. A mother has opened a sole proprietorship and is renting real estate. In 12 months, she has 12.000€ turnover and is not registered for VAT. Her daughter opened an LTD company, where she owns more than 25% of the shares. She provides services of graphic design. Also, she enrolled to the VAT system as she has more than 70.000€ taxable turnover. In this case, the mother does not have to register for VAT purposes as the business activities they both provide are not similar. In case they would provide similar business activities, both would have to register for VAT purposes.
Are you wondering what are the most popular business activities in Slovenia? Apply for our free webinar where we will discuss this topic and the conditions for these businesses:
Are you planning to start your business in Slovenia? Contact DATA for full support!
Do not miss the unique opportunity to learn about business immigration and support of company DATA with business in Slovenia! Contact us to for more information. Send us an email to [email protected]. You can also call us on +386 1 6006 270, Viber/Whatsapp +386 40 530 718 or skype data.business7.
Leave a Reply
You must be logged in to post a comment.