The Ministry of Finance has published proposed changes to the Slovenian Tax Procedure Act. The envisaged amendments bring a broad variety of important amendments regarding automatic exchange of information and elimination of administrative burdens.
The main significant change is the introduction of Advance Pricing Agreements (APA). Under the proposed regime for Advance Pricing Agreements under the Slovenian Tax Procedure Act, the taxpayer will be able to apply for a unilateral, bilateral or multilateral agreement. In order to negotiate an Advance Pricing Agreement, the taxpayer will have to file a written application with the tax authority; such petition will also need to specify all the necessary criteria that influence the determination of transfer prices.
The Advance Pricing Agreement could then be concluded under the following conditions:
- The taxpayer cooperates with the competent tax authority;
- The transaction that will be subject of the Advance Pricing Agreement will actually be carried out;
- The taxpayer and the competent tax authority agree on the substance of the agreement; and
- The term of the agreement and certainty of tax treatment of the transaction that is subject to the agreement is ensured.
In addition, the proposed regulation of the Advance Pricing Agreement under the Tax Procedure Act also defines the minimum terms that any concluded agreement shall contain:
- Methodology;
- Critical assumptions;
- Period of time to which the agreement relates; and
- Other criteria that may affect the determination of transfer prices and the method of implementation of the agreement.
All through the term of the Advance Pricing Agreement, the taxpayer shall notify the tax authority of any changes of the critical assumptions and necessary adjustments. Also in case of violation of obligations of the taxpayer or in the event of significant changes of the conditions, the agreement will be terminated. Any agreement, based on false, inaccurate or incomplete information provided by the taxpayer will be null and void.
