Harmful Tax Practices – 2017 Peer Review Reports on the Exchange of Information on Tax Rulings

Slovenia

Slovenia has met all aspects of the terms of reference (ToR) for the calendar year 2017 (year in review) and no recommendations are made.

Slovenia can legally issue three types of rulings within the scope of the transparency framework.

In practice, Slovenia has issued eight past rulings; for the period 1 April 2016 - 31 December 2016, Slovenia issued no future rulings; and for the year in review, Slovenia issued one future ruling within the scope of the transparency framework.

Peer input was received from one jurisdiction in respect of the exchanges of information on rulings received from Slovenia. It was positive, noting that information was complete, in the correct format and indicating that co-operation with Slovenia had been positive.

Introduction

1199.  This peer review covers Slovenia’s implementation of the BEPS Action 5 transparency framework for the year 2017. The report has four parts, each relating to a key part of the ToR. Each part is discussed in turn. A summary of recommendations is included at the end of this report.

A. The information gathering process

1200.  Slovenia can legally issue the following three types of rulings within the scope of the transparency framework: (i) cross-border unilateral advance pricing agreements (APAs) and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles;1 (ii) permanent establishment rulings; and (iii) related party conduit rulings. In Slovenia, rulings are issued by different financial offices, namely the General Financial Office, Special Financial Office and Regional Financial Offices, except for APAs that are issued only by the General Financial Office.

Past rulings (ToR I.4.1.1, I.4.1.2, I.4.2.1, I.4.2.2)

1201.  For Slovenia, past rulings are any tax rulings within scope that are issued either: (i) on or after 1 January 2014 but before 1 April 2016; or (ii) on or after 1 January 2010 but before 1 January 2014, provided they were still in effect as at 1 January 2014.

1202.  In the prior year peer review report, it was determined that Slovenia’s undertakings to identify past rulings and all potential exchange jurisdictions were sufficient to meet the minimum standard. Slovenia’s implementation in this regard remains unchanged, and therefore continues to meet the minimum standard.

Future rulings (ToR I.4.1.1, I.4.1.2, I.4.2.1)

1203.  For Slovenia, future rulings are any tax rulings within scope that are issued on or after 1 April 2016.

1204.  In the prior year peer review report, it was determined that Slovenia’s undertakings to identify future rulings were sufficient to meet the minimum standards. The prior year peer review report noted that it was not clear that potential exchange jurisdictions were able to be identified in all cases, but noted that Slovenia’s updated rulings process was in place as of 1 January 2017 which remedied this issue and no recommendations were made.

1205.  Under the new process in place as of 1 January 2017, all rulings and APAs issued after 1 January 2017 are registered in the centralised documentation database of the Financial Administration and are attributed a special identification number (code). The code allows for the ruling or APA to be identified and tracked though the system. The Financial Administration also created a special template, similar to the Annex C in the 2015 Action 5 Report (OECD, 2015), to be completed for any ruling or APA being issued, that requests relevant information on the taxpayer and potential exchange jurisdictions. The template is available on the intranet site of the Financial Administration. In this way, Slovenia notes that it is ensured that information on all issued rulings/APAs is always obtained and thus ensures that information is collected on potential exchange jurisdictions.

Review and supervision mechanism (ToR I.4.3)

1206.  In the prior year peer review report, it was determined that the General Financial Office’s review and supervision mechanisms were sufficient to meet the minimum standard. In 2017, the General Financial Office issued instructions on the updated process for identification of future rulings and APAs issued as of 1 January 2017 and the creation of the special template to capture all information relevant under Action 5. In addition, a check is performed to ensure that all issued rulings have been reported to the General Financial Office. Slovenia also indicates training was provided for handling future rulings issued in 2017.

Conclusion on section A

1207.  Slovenia has met all of the ToR for the information gathering process and no recommendations are made.

B. The exchange of information

Legal basis for spontaneous exchange of information (ToR II.5.1, II.5.2)

1208.  Slovenia has the necessary domestic legal basis to exchange information spontaneously. Slovenia notes that there are no legal or practical impediments that prevent the spontaneous exchange of information on rulings as contemplated in the Action 5 minimum standard.

1209.  Slovenia is a party to international agreements permitting spontaneous exchange of information, including (i) the Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol (OECD/Council of Europe, 2011) (“the Convention”), (ii) the Directive 2011/16/EU with all other European Union Member States and (iii) double tax agreements in force with 59 jurisdictions. 2

Completion and exchange of templates (ToR II.5.3, II.5.4, II.5.5, II.5.6, II.5.7)

1210.  Slovenia uses the EU central directory deployed by the European Commission to exchange information on rulings and APAs among the EU Member States as well as non- EU Member States. The process for the completion and exchange of templates has been updated to incorporate the use of the central directory.

1211.  The officials handling different aspects of the exchange of information process are attributed specific user profiles and access rights to the intranet application shared by the different financial offices. The same officer who issues a ruling is required to complete a template available on the intranet which contains all information on rulings as requested in Annex C of the Action 5 report (OECD, 2015). This information template is then reviewed by an official of the General Finance Office (“DAC3 ruling encoder”) who checks whether the ruling is in scope of Action 5 and DAC3 and verifies that all conditions for exchange are met. For those rulings which are relevant to non-EU Member States, the Annex C template is prepared for exchange and it is also entered into the EU central directory by the DAC3 ruling encoder. The information is reviewed by another official of the General Finance Office (“DAC3 ruling reviewer”). Once reviewed, the information template is then sent to the Competent Authority to submit the information on the ruling or APA for exchange, in the OECD XML or Annex C format. The information on ruling or APA is exchanged in a week or two after the ruling or APA information is received by the personnel responsible for the exchange of information.

1212.  Slovenia indicates that it has relied on the guidelines in the XML Schema and User Guide for the exchange of information on rulings for the year in review and the prior year by including a short summary of the ruling which includes relevant information that could help the receiving tax administration to assess potential base erosion and profit shifting risks. In the future, Slovenia intends to incorporate the FHTP internal suggested guide in its rulings processes.

1213.  For the year in review, the timeliness of exchanges is as follows:

 

Past rulings in the scope of the transparency framework	Number of exchanges transmitted by 31 December 2017	Delayed exchanges
		Number of exchanges not transmitted by 31 December 2017	Reasons for the delays	Any other comments
	N/A	N/A		No past rulings had to be exchanged with new members of the IF that joined in 2017 and as such no additional exchanges on past rulings were required.
Future rulings in the scope of the transparency framework	Number of exchanges transmitted within three months of the information becoming available to the competent authority or immediately after legal impediments have been lifted	Delayed exchanges
		Number of exchanges transmitted later than three months of the information on rulings becoming available to the competent authority	Reasons for the delays	Any other comments
	1	0	N/A
Total	1	0

 

Follow up requests received for exchange of the ruling	Number	Average time to provide response	Number of requests not answered
	0	N/A	N/A

Conclusion on section B

1214.  Slovenia has met all of the ToR for the exchange of information process and no recommendations are made.

C. Statistics (ToR IV)

1215.  The statistics for the year in review are as follows:

 

Category of ruling	Number of exchanges	Jurisdictions exchanged with
Rulings related to preferential regimes	N/A	N/A
Cross-border unilateral advance pricing agreements (APAs) and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles	0	N/A
Cross-border rulings providing for a unilateral downward adjustment to the taxpayer’s taxable profits that is not directly reflected in the taxpayer’s financial / commercial accounts	N/A	N/A
Permanent establishment rulings	Included in de minimis	N/A
Related party conduit rulings	0	N/A
De minimis rule	1	N/A
IP regimes: total exchanges on taxpayers benefitting from the third category of IP assets, new entrants benefitting from grandfathered IP regimes; and taxpayers making use of the option to treat the nexus ratio as a rebuttable presumption	N/A	N/A
Total	1

D. Matters related to intellectual property regimes (ToR I.4.1.3)

1216.  Slovenia does not offer an intellectual property regime for which transparency requirements under the Action 5 Report (OECD, 2015) were imposed.

Summary of recommendations on implementation of the transparency framework

 

Aspect of implementation of the transparency framework that should be improved	Recommendation for improvement
	No recommendations are made.

References

OECD (2017), BEPS Action 5 on Harmful Tax Practices – Terms of Reference and Methodology for the Conduct of the Peer Reviews of the Action 5 Transparency Framework, OECD/G20 Base Erosion and Profit Shifting Project, OECD, Paris. www.oecd.org/tax/beps/beps-action-5-harmful-tax-practices-peer-review-transparencyframework.pdf.

OECD (2015), Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris. https://doi.org/10.1787/9789264241190-en.

OECD/Council of Europe (2011), The Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol, OECD Publishing, Paris. http://dx.doi.org/10.1787/9789264115606-en.

Notes

← 1.  Slovenia introduced an APA program starting on 1 January 2017 that involves all transfer pricing issues.

← 2.  Parties to the Convention are available here: www.oecd.org/tax/exchange-of-tax-information/convention-on-mutual-administrative-assistance-in-tax-matters.htm. Slovenia also has bilateral agreements with Albania, Armenia, Austria, Azerbaijan, Belgium, Belarus, Bosnia and Herzegovina, Bulgaria, Canada, China (People’s Republic of), Croatia, Cyprus, Czech Republic, Denmark, Estonia, Finland, Former Yugoslav Republic of Macedonia, France, Georgia, Germany, Greece, Hungary, Iceland, India, Iran, Ireland, Isle Of Man, Israel, Italy, Kazakhstan, Korea, Kosovo, Kuwait, Latvia, Lithuania, Luxembourg, Malta, Moldova, Netherlands, Norway, Poland, Portugal, Qatar, Romania, Russia, Serbia, Montenegro, Singapore, Slovak Republic, Spain, Sweden, Switzerland, Thailand, Turkey, Ukraine, United Arab Emirates, United Kingdom, United States and Uzbekistan.

Note by Turkey: The information in this document with reference to “Cyprus” relates to the southern part of the Island. There is no single authority representing both Turkish and Greek Cypriot people on the Island. Turkey recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable solution is found within the context of the United Nations, Turkey shall preserve its position concerning the “Cyprus issue”.

Note by all the European Union Member States of the OECD and the European Union. The Republic of Cyprus is recognised by all members of the United Nations with the exception of Turkey. The information in this document relates to the area under the effective control of the Government of the Republic of Cyprus.