· 7 min read

Slovenia – Transfer Pricing (2025)

The arm’s length principle is embedded in Slovenian domestic law through the Corporate Income Tax Act, notably Article 16, which governs related-party transactions and transfer pricing. Further practical implementation and elaboration are set out in the Rules on Transfer Prices, which explain how to determine arm’s length remuneration, the methods to be used and comparability analysis (e.g. Section 1, Articles 1a to 6, and Sections 1 to 5, Articles 1a to 21). The OECD Transfer Pricing Guidelines (TPG, 2010) have been translated into Slovene and are used by taxpayers and the Financial Administration as a practical tool; the Financial Administration also publishes a practical booklet in Slovene providing additional guidance.

Arm’s length principle and the role of the OECD Guidelines

Slovenian law explicitly refers to the arm’s length principle and uses the OECD TPG as a practical reference for determining appropriate remuneration in controlled transactions. The Rules on Transfer Prices align with the TPG framework; the translated TPG and the Financial Administration booklet support consistent application by taxpayers and auditors.

The Corporate Income Tax Act defines an associated enterprise in Article 16(1). An associated enterprise is generally a taxpayer (resident or non-resident) or a foreign legal entity or foreign person without legal personality where there is a controlling relationship or significant participation. Specifically, the Act provides that an entity is associated if the taxpayer directly or indirectly holds at least 25% of the value or number of shares or equity holdings, or manages or controls voting rights of the foreign person; the same 25% threshold applies reciprocally where the foreign person holds such interest in the taxpayer. The same person or related individuals owning at least 25% in two parties simultaneously also creates association. Thus, the 25% ownership threshold is the explicit statistical trigger under Article 16(1). The law also recognises association by contractual control or where transaction terms differ from those that would be agreed between independent enterprises under comparable circumstances.

Methods and application criteria

The Corporate Income Tax Act, Article 16(5), enumerates the transfer pricing methods to be used, and these are developed in the Rules on Transfer Prices (Section 1, Articles 1a to 6). The methods included are the Comparable Uncontrolled Price (CUP), Resale Price, Cost Plus, Transactional Net Margin Method (TNMM) and Profit Split. Combination of methods is permitted where appropriate. The Rules adopt the “most appropriate method” approach for method selection (Rules on Transfer Prices, Section 1, Article 1a) rather than prescribing a strict hierarchy; the chosen method must reflect the specific facts and circumstances of the case.

Comparability and ranges

The Rules on Transfer Prices generally follow the OECD guidance on comparability analysis (Chapter III of the TPG) and specify how to evaluate comparables and when comparability adjustments are required (Section 2, Article 9). There is a domestic preference for local comparables when available, although the small size of the Slovenian market frequently limits the availability of reliable domestic comparables, necessitating the use of foreign comparables. The tax authority does not use secret comparables for transfer pricing assessments.

Slovenia permits use of an arm’s length range and statistical measures under Rules on Transfer Prices (Section 5, Article 21). If highly reliable figures within a range exist, the figure that best reflects the transaction’s facts and circumstances should be selected. If figures are not reliable, the interquartile range and the median should be used to determine the arm’s length price. Comparability adjustments are required where differences materially affect the comparison or improve reliability, consistent with Section 2, Article 9 of the Rules on Transfer Prices.

Documentation and reporting

Slovenia has implemented documentation requirements consistent with the Master File / Local File approach. Article 382 of the Tax Procedure Act contains general principles for preparing Master File and Local File documentation. Country-by-Country Reporting (CbCR) was introduced in the Tax Procedure Act (Articles 248b, 255i, 255j, 255k, 255l and 397) in 2016, and technical rules were included in the Rules on the Implementation of the Tax Procedure Act (Section 6, Articles 86.c to 86.g and Annex 21). The annual tax return contains annexes (e.g. Annex 16) that require certain controlled-transaction information to be reported. The Financial Administration’s booklet clarifies practical aspects of these documentation obligations.

Timing and language requirements are administered pragmatically: documentation should be prepared in advance of controlled transactions and made available to the tax authority upon request during an audit. Where immediate production is not possible, the tax authority will set a deadline for submission that cannot be less than 30 days nor exceed 90 days, depending on volume and complexity. Documentation may be submitted in a foreign language, but upon request a Slovene translation must be provided. Electronic storage of documentation is permitted. CbCR filing follows BEPS Action 13 standards.

There is no specific penalty regime for transfer pricing documentation non-compliance; general tax penalties apply under Slovenian tax law.

Safe harbours, exemptions and materiality

Slovenia has simplification measures related to financial transactions in the form of safe harbour rules. The Corporate Income Tax Act includes a safe harbour in Article 19 allowing taxpayers to determine interest rates in related-party loans using a recognised method explained in the Rules on the recognised rate of interest. The calculation considers the officially published risk-free rate and applies mark-ups for currency, maturity and the borrower’s creditworthiness. Article 32 of the Corporate Income Tax Act provides a thin capitalization rule: if loans from a related party (defined as an entity holding more than 25% of shares, capital or voting rights in the taxpayer) exceed four times the taxpayer’s equity, the interest attributable to the excess debt is not tax-deductible. Taxpayers may submit evidence that the excessive loan would have been provided by an independent lender to preserve deductibility.

Slovenia was granted a derogation under the EU ATAD (Council Directive (EU) 2016/1164) until 1 January 2024, on the basis that its targeted national rule (Article 32) was considered equally effective compared with the ATAD EBITDA-based interest limitation rule.

Cost Contribution Arrangements

General guidance on Cost Contribution Arrangements is provided in the Rules on Transfer Prices (Section 7, Article 23), which outline the expected approach to structuring and documenting such arrangements for tax purposes.

APAs and MAP: procedures and timing

Slovenia provides administrative mechanisms to prevent and resolve transfer pricing disputes. These include enhanced engagement programs and the availability of Advance Pricing Agreements (APAs) — unilateral, bilateral and multilateral — allowing taxpayers to obtain certainty on transfer pricing methods and outcomes in advance. The Mutual Agreement Procedure (MAP) is available for resolving international transfer pricing disputes; specifics regarding timelines for APAs and MAPs are described in administrative guidance and the MAP profile published by Slovenia on the OECD website, but the country profile does not set out precise statutory timeframes for APA or MAP processing.

Penalties and other considerations

There are no transfer-pricing-specific penalties for failure to prepare documentation; general tax enforcement penalties apply. Transfer pricing adjustments that effectively reallocate profits are treated as hidden profit distributions and are subject to a 15% withholding tax under Articles 70 and 74 of the Corporate Income Tax Act, unless a lower treaty rate applies under a double taxation convention. Taxpayers are permitted to make year-end (year-end) upward adjustments to transfer prices in their tax returns; downward adjustments are not permitted unilaterally and should be addressed through MAP where cross-border issues arise.

Attribution of profits to Permanent Establishments

Slovenia has adopted the Authorised OECD Approach (AOA) for attributing profits to permanent establishments in a number of recent tax treaties that include the 2010 version of Article 7 of the OECD Model Tax Convention. Where older treaties contain the previous version of Article 7 (OECD MTC 2008) or equivalent provisions, those treaty provisions apply.

Conclusion

Slovenia’s transfer pricing framework is broadly consistent with the OECD Guidelines, combining statutory provisions in the Corporate Income Tax Act (notably Articles 16, 19 and 32) with operational rules in the Rules on Transfer Prices. The system emphasizes selection of the most appropriate method, permits use of ranges and statistical measures, mandates Master File/Local File and CbCR documentation, and offers administrative certainty via APAs and MAP. Key practical points include the 25% ownership threshold for related-party status, the thin capitalization rule limiting deductibility where related-party debt exceeds four times equity, and available safe harbours for interest rate determination.

References

For further information and access to the OECD country profile page: https://www.oecd.org/en/topics/sub-issues/transfer-pricing/transfer-pricing-country-profiles.html

Share:
Back to OECD
Disclaimer:

La información presentada en este perfil se ha generado tomando como base datos y contenidos publicados por la OCDE. Si bien se busca reflejar fielmente la información disponible, no se garantiza su exactitud ni exhaustividad y se recomienda consultar las fuentes originales de la OCDE para fines oficiales o de investigación.