Tax deductions for limited companies – what can you claim?

Tax deductions for limited companies - what can you claim?

Tax deductions for limited companies is a hot topic this month since tax returns for 2022 are in process. Still, what tax deductions can you claim for 2022? Also, do you own an Ltd in Slovenia? Maybe you want to open a business? Contact us and schedule a meeting with our experts today! Eventually, if you have any dilemmas, you are in the right place. We will explore everything you need to know about taxes in Slovenia and much more! In either case, stay with us as we explore the conditions! Or call us on +386 40 530 718 (Viber/WhatsApp) for more information!

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Tax deductions for limited companies – DDPO 2022

In essence, you can claim tax deductions for Ltd companies within the deadline of the 2022 corporation tax return (DDPO 2022). In fact, this means that accountants have one of the busiest times of the year right now. Do you find this helpful? Perhaps you need professional accounting services? We at DATA have a special accounting team!

Which can you claim?

To illustrate, the Corporate Income Tax Act (ZDDPO-2) defines the tax deductions for companies. These include:

  • Research and development investment allowance (100% of the funds);
  • Investment allowance (40% of the cost of the asset);
  • Employment allowance (45% or 55% of the employee’s salary);
  • Allowance for investment in digital and green transition (40 % of the amount);
  • Disability employment allowance (50 % or 70 % of the employee’s salary);
  • Allowance for practical work in vocational training (up to a maximum of 80% of the average monthly salary of employees in the Republic of Slovenia);
  • Allowance for donations.

Moreover, the total of all tax deductions for an Ltd cannot exceed 63% of the taxable amount. In practice, this means that an Ltd always pays tax on at least 37% of its tax base (taxable profits). As a general rule, tax deductions are mutually exclusive and you cannot use them to the extent that budgetary resources finance the investment. Does this interest you? In spite of this, do you have a business in Slovenia? Want to know more? We offer free webinars! For that purpose, we recommend individuals to prepare before registration procedure! Just contact us and find out more!

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Investment allowance

Investment tax deductions is the most frequent method for tax reliefs. In this case, the taxable person can claim a reduction of 40%  of the amount he/she invests (in equipment or assets). However, you cannot claim it for furniture and office equipment (except computer) and motor vehicles. There are some exceptions though. Those are hybrid or electric cars; or EURO VI vehicles. Do you want to invest in Slovenia? What is your business idea? On the whole, do you see Slovenia as your future business adventure? If the answer is yes, don’t hesitate to call us on +386 40 530 718 (Viber/WhatsApp)!

Example of an investment

To continue with some examples. So, let’s say a person buys in 2022 a computer that costs EUR 1,800 plus VAT. The date of purchase was 24.6.2022. In brief, under Article 33 ZDDPO-2, the taxable person sets the maximum depreciation rate for the asset at 50 per cent. Then, the investment tax allowances parallel the preparation of tax returns. While the depreciation is a monthly process. Of course, depreciation also reduces the taxable amount for corporation tax purposes. Eventually, the taxable person will be able to reduce his taxable amount by €1,170.

Review of the tax deductions base due to the investment:

purchase 24.6.2022 in EUR
Computer with monitor 1.800
Depreciation rate 50 %
Annual depreciation/cost 900
Monthly depreciation/cost 75
Depreciation cost 2022 450
Investment allowance 2022 (40 %) 720


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