Problems encountered with Fire Brigade Tax rate increase in Slovenia

Slovenia’s Fire Brigade Tax (FBT) has changed.

The rate increased from 5% to 9%. This came into effect on 1 October 2022. The first submission deadline followed on 15 November 2022.

Unfortunately, the transition has been plagued by problems. We discuss some issues and how Sovos is approaching them.

Slovenia’s new tax return

We had anticipated that the tax return would remain unchanged, with the premium reduction at 20% and the standard at 100% carrying over from the previous version. Instead, the Slovenian tax authorities overhauled the return entirely. This included:

With the combinations, a return could include up to 30 different lines, but the return only includes four – one for each combination.

This layout suggests that the tax authority wishes to combine policies with the same rates, e.g., 100% and 9%.

This differs from previous returns.

Previously each class of business had a separate line. Sovos has contacted the tax authority about the most compliant way to complete this.

Telephone number information on tax return

Some aesthetic changes caused unexpected issues.

Telephone numbers now have a set number of boxes instead of an open line.

This change doesn’t accommodate longer phone numbers. For example, a UK phone number doesn’t fit.

This requires clarification from the tax authorities:

Postcodes also have the same issue.

As frustrating as these issues are, there is a more significant frustration.

The amount of time between the new return’s publishing and the first submission deadline The new return was published online roughly three weeks before the deadline.

This was a very short turnaround to upload the returns to the systems and solve any problems that may have arisen, as well as informing clients about any new information that may be required here.

Fortunately, no new information was required. Short deadlines to comply with new tax return requirements are a frequent problem we encounter.

Conflicting information about Slovenia’s new Fire Brigade Tax return

Guidance from the tax authority has been inconsistent at best.

For example, the law passed in May 2022 stated the following:

The new Fire Brigade Tax rate would apply to the cash received date. The 9% rate applies to any premiums generated after 1 October 2022.

However, guidance on the official Slovenian tax authority website stated that if the inception date for the policy was before 1 October, the 5% rate would still apply. This is regardless of when the premium was collected. This applies until the policy is renewed. At this point, the 9% rate is applied. This is a significant conflict. It’s potentially millions of euros difference in the amount due. Don’t forget the countless corrections required to balance the books.

As well as being issued late, multiple tax return versions were published online. Only one had the updated tax rate included. The return disappeared from the website and was replaced by the original return.

The English translation and other versions haven’t been updated – this is still the case even after the deadline.

Finally, the guidance on the tax authority’s website states it’s mandatory to submit the FBT returns online through the tax authority portal.

However, official communications from the tax authority directly informed us at Sovos that submissions were required by email only.

Again, this is a significant conflict. Submitting returns through the wrong channel would result in the tax authority declaring the submission late and levying fines.

Next steps with Slovenia’s new tax return

We have communicated all these issues to the Slovenian tax authority. We haven’t received a response yet, but we will update this blog as soon as we have more information.

Sovos has a wealth of experience that enables us to solve issues that arise and ensure our customers remain compliant with the latest tax requirements.

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