19. 1. 2016

Changes in Personal Income Tax Brackets – valid as of 1 January 2016

On 15 December 2015 the National Assembly enacted amendments to the Fiscal Balance Act (ZUJF) that determine a different threshold between the second Personal Income Tax (PIT) bracket and the third PIT bracket for fiscal years 2016 and 2017.

With this measure the threshold between the 27% PIT bracket (the second bracket) and the 41% PIT bracket (the third bracket) increased from an annual net tax basis of EUR 18,960.28 to EUR 20,400.00 (the annual net tax basis equals the annual gross income reduced by social security contributions, expenses, and tax allowances).

Simultaneously, the abovementioned Act prolongs the application of the fourth PIT bracket (50% taxation), which was introduced in 2013 as a temporary measure to address the economic crisis and was originally due to be abolished at the end of 2015, for (at least) two years.

Therefore, the PIT brackets from 1 January 2016 until 31 December 2017 shall be the following (bold font indicates changes compared to 2015):

 
If the annual net tax basis amounts to (in EUR) the PIT shall amount to (in EUR)
from to
8,021.34 16%
8,021.34 20,400.00 1,283.41 + 27% above 8,021.34
20,400.00 70,907.20 4,625.65 + 41% above 20,400.00
70,907.20 25,333.60 + 50% above 70,907.20

According to the Slovenian Government, the annual net tax basis amounting to EUR 20,400.00 corresponds to approximately 1.5 times the average salary in Slovenia. The increase in the threshold between the second and the third PIT brackets is expected to benefit 12% of all taxpayers (approximately 114,700 persons) in 2016 and 2017, who shall (with the same annual income) pay less personal income tax compared to 2015.

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