Reduce Your Transfer Pricing Risk in Slovenia

On 1 January 2005, new provisions of the Slovenian CIT Act came into effect, which introduced transfer pricing legislation in line with OECD Transfer pricing guidelines. Requirements to keep supporting transfer pricing documentation were introduced at the same time. This is governed by Article 365 of the Slovenian Tax Procedure Act. New provisions reflect the accession of Slovenia into the EU and the modernization of tax legislation, and follow a general trend of tightening regulations relating to transfer pricing documentation. As a result of the taxpayer’s failure to provide documentary evidence on transfer pricing to the Slovenian tax authorities, penalties of up to EUR 25.000 may be imposed. Other adjustments of tax base and penalties are also possible.

This shows the vital importance of effective and efficient documenting and benchmarking of intra-group transfer pricing policies and practices, for organizations seeking to protect themselves from revenue authority scrutiny and from potential financial consequences.