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Sole proprietor (s.p.) income tax?

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senpablo

Hi,
I'm a freelance software developer, I'm currently living in Uruguay. I'm looking into moving to Slovenia and register as a sole proprietor (s.p.). It would be great to get some insight on how much income tax would I have to pay there.
I understand that if I earn less than 100,000 euro annually I can use normalized costs and pay only 4% tax. My business doesn't have any relevant costs. In case I earn more than 100,000 euro, then how much income tax would I have to pay?
Thanks

Birja

Hi,Ìý asÌý s.pÌý Ìýyou pay 3 typeÌý of taxes :

1.Ìý social contributions health and pensionÌý etcÌý Ìý38,2 %Ìý ÌýofÌý insurance baseÌý (level depend on your incomeÌý )
(contributions are obliagatoryÌý exceptÌý you have a proof you already pay them in some other country...but it could be complicated when you get sickÌý in any caseÌý you must have some health insurance otherwise cost of hospital rise into heavenÌý )

2.Ìý Ìý personalÌý income tax

OverÌý ÌýÌý Ìý Ìý Ìý Ìý ÌýToÌý Ìý Ìý Ìý Ìý Ìý
0Ìý ÌýÌý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý 8.021,34Ìý Ìý Ìý ÌýÌý Ìý Ìý Ìý Ìý Ìý Ìý Ìý16%
8.021,34Ìý ÌýÌý Ìý Ìý Ìý Ìý 20.400,00Ìý Ìý 1.283,41Ìý Ìý Ìý Ìý+27%Ìý Ìý overÌý 8.021,34
20.400,00Ìý Ìý 48.000,00Ìý Ìý 4.625,65Ìý ÌýÌý Ìý Ìý Ìý+34%Ìý Ìý overÌý 20.400,00
48.000,00Ìý ÌýÌý 70.907,20Ìý Ìý 25.535,16Ìý Ìý Ìý+39%Ìý Ìý over 48000
70.907,20Ìý ÌýÌý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý Ìý25.535,16Ìý Ìý Ìý+50%Ìý Ìý over 70.907,20

3, VAT taxÌý 22 %Ìý

But for your work are special conditions around VAT it is matter of discussion because it is quite complicated.


This is in short.Ìý IR

senpablo

So if I earn €99,000 I can use normalized expenses (Normiranec), then I'd pay annually €99,000 * 0.04 = €3960 (4% tax).
But if I earn €101,000 I can't use Normiranec (I'd have to use the progressive tax table), so I 'd have to pay €40581.56 (40% tax)?

Birja

Yes it would beÌý 4% , but dont forget social contributions whichÌý couldÌý ÌýbeÌý Ìýa very highÌý cost at this revenue
You can beÌý 'normiranec'Ìý up toÌý 300.000 eurÌý Ìý butÌý ÌýnotÌý with 80% of costs.Ìý
If you your income would be higherÌý ÌýyourÌý costÌý will be alwaysÌý 80.000Ìý EurÌý So this mean that theÌý max of cost is :Ìý Ìý80.000 eur

For example :Ìý you have income 150.000Ìý ÌýEurÌý your taxÌý base will beÌý 70.000Ìý EurÌý Ìý etc .Ìý Ìý
150000-80000Ìý =Ìý 70.000Ìý Ìý taxÌý =Ìý 14.000 Eur
If you have in nextÌý two yearsÌý all togetherÌý Ìý300.000 EurÌý youÌý can't be normiranec anymore.

So this yearÌý you canÌý have 150.000 eurÌý andÌý nextÌý 140.0000 you canÌý caontinue as normiranec.
Than if yur partner is doing same bussinesÌý (wife)Ìý Ìý Ìý etc.Ìý ( conectedÌý person)Ìý the income of both partners sum togheterÌý for purposesÌý of taxation. ButÌý ifÌý you diffrentÌý doÌý busseines both can keepÌý separate taxation.Ìý Ìý

This is new fromÌý 1.1.2018.
regards

senpablo

Thanks a lot for the explanations. How much would I have to pay in social contributions if I earn:
a) 50.000 eur?
b) 100.000 eur?

Birja

Maximum isÌý 2. 118,71 EurÌý ÌýMontlyÌý Ìý but is changing all he timeÌý , depend on average payroll in SloveniaÌý Ìý Ìý, i should make calculation it is pretty comlicastedÌý , regards

senpablo

If I earn 50.000 eur, how much is the insurance base?
Thanks

Birja

= minÌý Ìý363,20Ìý ÌýmontlyÌý Ìý at 50000Ìý income
Ìý Ìýaprox 580Ìý ÌýmontlyÌý atÌý Ìý 100 .000Ìý incomeÌý

butÌý this is changingÌý accordingÌý toÌý ÌýtheÌý ÌýmanyÌý otherÌý Ìý circumstancesÌý
so calculationÌý isÌý aproximating.Ìý
comeÌý hereÌý and have aÌý ÌýlookÌý
only the movingÌý Ìýto slovenia will be veryÌý hardÌý .Ìý a lotÌý ofÌý bureaucracy
thenÌý hardÌý Ìý weatherÌý Ìý
but not everythingÌý ÌýbadÌý
someÌý things areÌý very goodÌý
i just don't wantÌý to give you an illusion , just a realisticÌý picture
dontÌý forgetÌý onÌý VATÌý Ìý identificationÌý Ìý :)Ìý
it is not so easy as it seems

if you decideÌý toÌý move i wouldÌý be gladÌý of your responceÌý

good luckÌý ir

senpablo

Thanks a lot for the detailed info and the advice :)
I travelled in Slovenia last december with my wife and it was cold, but we really liked it anyway. I'm polish so I hope it won't be too complicated to settle in Slovenia.
About VAT, I export software development services to companies in the US, so VAT would be 0.
Do social contributions include public health insurance for my wife too or only for me? We don't have kids.
Thank you!

Birja

Public insurance can include also your family membersÌý Ìýbut i dont know how will be the case with y wife...guess she is not slovenian .Ìý If you plan to be developer only for thirdÌý countries (out of EU)Ìý this is
TrueÌý but in EUÌý ÌýitÌý isÌý ÌýFalse ...so everything is relative.

regards ir

senpablo

I really appreciate your explanations, thanks a lot :)
I hope we can move to Slovenia soon, such a beautiful country!

Omar Vector

Hello

I know this quite old post, but it really helped me to understand more about SP and Tax system.

Not sure if would be anyone still following up with the post bec I want to ask a question about insurance.

If I have a private insurance here in slovenia, do I still have to pay Insurance and social contributions

SimCityAT

-

SimCityAT

Omar Vector wrote:

Hello


If I have a private insurance here in slovenia, do I still have to pay Insurance and social contributions


Answer to your question Yes, you still have to pay.

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