Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews: Slovenia 2012 by OECD

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									GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE
OF INFORMATION FOR TAX PURPOSES



Peer Review Report
Phase 1
Legal and Regulatory Framework

SLOVENIA
      Global Forum
    on Transparency
      and Exchange
 of Information for Tax
Purposes Peer Reviews:
      Slovenia 2012
                    PHASE 1



                    October 2012
  (reflecting the legal and regulatory framework
                   as at June 2012)
This work is published on the responsibility of the Secretary-General of the
OECD. The opinions expressed and arguments employed herein do not
necessarily reflect the official views of the OECD or of the governments of its
member countries or those of the Global Forum on Transparency and Exchange
of Information for Tax Purposes.

This document and any map included herein are without prejudice to the status
of or sovereignty over any territory, to the delimitation of international frontiers
and boundaries and to the name of any territory, city or area.


  Please cite this publication as:
  OECD (2012), Global Forum on Transparency and Exchange of Information for Tax Purposes Peer
  Reviews: Slovenia 2012: Phase 1: Legal and Regulatory Framework, OECD Publishing.
  http://dx.doi.org/10.1787/9789264181892-en



ISBN 978-92-64-18187-8 (print)
ISBN 978-92-64-18189-2 (PDF)


Series: Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews
ISSN 2219-4681 (print)
ISSN 2219-469X (online)




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                                                                                                 TABLE OF CONTENTS – 3




                                            Table of Contents


About the Global Forum . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
   Information and methodology used for the peer review of Slovenia . . . . . . . . . . . 9
   Overview of Slovenia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
   Recent developments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14

Compliance with the Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

A. Availability of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
   Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
   A.1. Ownership and identity information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
   A.2. Accounting records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
   A.3. Banking information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
B. Access to Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
   Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
   B.1. Competent Authority’s ability to obtain and provide information . . . . . . . . 44
   B.2. Notification requirements and rights and safeguards. . . . . . . . . . . . . . . . . . 49
C. Exchanging Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
   Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .   51
   C.1. Exchange of information mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                        52
   C.2. Exchange of information mechanisms with all relevant partners . . . . . . . .                                       58
   C.3. Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .       59
   C.4. Rights and safeguards of taxpayers and third parties. . . . . . . . . . . . . . . . . .                             61
   C.5. Timeliness of responses to requests for information . . . . . . . . . . . . . . . . . .                             62




PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
4 – TABLE OF CONTENTS

Summary of Determinations and Factors Underlying Recommendations. . . . 65

Annex 1: Jurisdiction’s Response to the Review Report . . . . . . . . . . . . . . . . . . 69
Annex 2: List of All Exchange-of-Information Mechanisms in Force . . . . . . . 70
Annex 3: List of All Laws, Regulations and Other Material Consulted. . . . . . 75




                    PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
                                                                          ABOUT THE GLOBAL FORUM – 5




                             About the Global Forum

           The Global Forum on Transparency and Exchange of Information for Tax
       Purposes is the multilateral framework within which work in the area of tax
       transparency and exchange of information is carried out by over 100 jurisdic-
       tions, which participate in the Global Forum on an equal footing.
            The Global Forum is charged with in-depth monitoring and peer review of
       the implementation of the international standards of transparency and exchange
       of information for tax purposes. These standards are primarily reflected in the
       2002 OECD Model Agreement on Exchange of Information on Tax Matters
       and its commentary, and in Article 26 of the OECD Model Tax Convention on
       Income and on Capital and its commentary as updated in 2004. The standards
       have also been incorporated into the UN Model Tax Convention.
           The standards provide for international exchange on request of fore-
       seeably relevant information for the administration or enforcement of the
       domestic tax laws of a requesting party. Fishing expeditions are not author-
       ised but all foreseeably relevant information must be provided, including
       bank information and information held by fiduciaries, regardless of the
       existence of a domestic tax interest or the application of a dual criminality
       standard.
           All members of the Global Forum, as well as jurisdictions identified by
       the Global Forum as relevant to its work, are being reviewed. This process
       is undertaken in two phases. Phase 1 reviews assess the quality of a jurisdic-
       tion’s legal and regulatory framework for the exchange of information, while
       Phase 2 reviews look at the practical implementation of that framework.
       Some Global Forum members are undergoing combined – Phase 1 and
       Phase 2 – reviews. The ultimate goal is to help jurisdictions to effectively
       implement the international standards of transparency and exchange of infor-
       mation for tax purposes.
            All review reports are published once adopted by the Global Forum.
           For more information on the work of the Global Forum on Transparency and
       Exchange of Information for Tax Purposes, and for copies of the published review
       reports, please refer to www.oecd.org/tax/transparency and www.eoi-tax.org.




PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
                                                                               EXECUTIVE SUMMARY – 7




                                 Executive Summary

       1.      This report summarises the legal and regulatory framework for trans-
       parency and exchange of information in Slovenia. The international standard,
       which is set out in the Global Forum’s Terms of Reference to Monitor and
       Review Progress Towards Transparency and Exchange of Information, is
       concerned with the availability of relevant information within a jurisdiction,
       the competent authority’s ability to gain timely access to that information,
       and in turn, whether that information can be effectively exchanged with its
       exchange of information (EOI) partners.
       2.       Slovenia is one of the states of former Yugoslavia and gained inde-
       pendence on 25 June 1991. Its economic development has been strong since
       its accession to the European Union in 2004. Slovenia has a fully developed
       tax system including an income tax based on taxation of worldwide income
       of residents.
       3.      Comprehensive registration requirements exist for entities in Slovenia,
       which must register in different registers but limited liability companies and
       entrepreneurs can now carry out certain registration requirements at a “one-
       stop-shop” created by the government. The Court Register and Tax Register
       contain full ownership information on limited liability companies, general
       and limited partnerships and economic interest groupings. The share registers
       of public limited companies and partnerships with share capital are kept by
       the Central Securities Clearing Corporation (CSCC), which was specifically
       created for that purpose. The central register of the CSCC also includes infor-
       mation on the owners of bearer shares, which may be issued by both public
       limited companies and limited partnerships with share capital. No owner-
       ship information is available on foreign companies with sufficient nexus to
       Slovenia, in particular having their place of effective management there.
       Similarly, ownership information on foreign partnerships carrying on business
       in Slovenia or deriving taxable income is not consistently available.
       4.       Although the concept of a trust is not recognised in Slovenia, residents
       may act as a trustee or trust administrator of a foreign trust. The combination
       of the obligations under AML/CFT legislation and the general tax obligations
       to maintain and submit information to the Slovene tax authorities permit that



PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
8 – EXECUTIVE SUMMARY

     information regarding the settlors, trustees and beneficiaries of foreign trusts
     is available to the Slovene authorities. The Register of Foundations contains
     information on the founders and persons authorised to represent all founda-
     tions. As foundations may only be established for beneficial or charitable
     purposes, they may not be created to benefit named individuals or solely
     members of a family.
     5.        A general obligation to keep accounting records is in place in respect
     of all relevant entities and arrangements. Whilst obligations exist for all enti-
     ties and arrangements to keep underlying documentation, these obligations are
     worded in a general way and do not go into detail regarding the type of under-
     lying documentation to be kept, which may lead to an uneven application. The
     retention period for accounting records under tax law, which applies to all
     relevant entities, is connected to the statute of limitations and is ten years.
     6.      The AML/CFT legislation ensures that all records pertaining to
     the accounts as well as to related financial and transactional information is
     required to be kept by Slovene banks. In addition, certain information on
     transaction accounts is available through a public register.
     7.      The access powers available to the Slovene tax authorities enable them
     to obtain information from legal entities and individuals carrying on business
     either automatically, by written request or through a visit of a tax officer to
     the business premises. When information must be obtained from individuals
     who do not carry on business, the tax authorities can do so by written request.
     The access powers are backed up by monetary penalties. There are no secrecy
     provisions, which would impede the effective exchange of information.
     8.       Slovenia has a network of information exchange mechanisms that
     covers 69 jurisdictions, including all relevant partners. Information can
     be exchanged under DTCs, TIEAs, the OECD/CoE Convention on Mutual
     Administrative Assistance in Tax Matters and EU instruments. The confi-
     dentiality of information exchanged with Slovenia is protected by obligations
     implemented in the information exchange agreements, complemented by
     domestic legislation, which provides for tax officials to keep information
     confidential. No enforcement measures are in place where confidentiality is
     breached of information that does not relate to a Slovene tax liability under
     an information exchange agreement other than a DTC.
     9.      Slovenia’s progress in the areas where recommendations have been
     made, as well as its actual practice in exchange of information with its exchange
     of information partners, will be considered in detail in the Phase 2 review of
     Slovenia which is scheduled to commence in the first half of 2013.




                  PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
                                                                                      INTRODUCTION – 9




                                        Introduction


Information and methodology used for the peer review of Slovenia

       10.     The assessment of the legal and regulatory framework of Slovenia
       was based on the international standards of transparency and exchange of
       information as described in the Global Forum’s Terms of Reference, and
       was prepared using the Methodology for Peer Reviews and Non-Member
       Reviews. The assessment was based on the laws, regulations and exchange of
       information mechanisms in force or effect as at June 2012, other information,
       explanations and materials supplied by Slovenia, and information supplied by
       partner jurisdictions.
       11.      The Terms of Reference (“ToR”) break down the standards of trans-
       parency and exchange of information into 10 essential elements and 31
       enumerated aspects under three broad categories: (A) availability of informa-
       tion; (B) access to information; and (C) exchanging information. This review
       assesses Slovenia’s legal and regulatory framework against these elements
       and each of the enumerated aspects. In respect of each essential element, a
       determination is made that either: (i) the element is in place; (ii) the element
       is in place but certain aspects of the legal implementation of the element need
       improvement; or (iii) the element is not in place. These determinations are
       accompanied by recommendations for improvement where relevant. A sum-
       mary of the findings against the elements is set out on pages 65-67 of this
       report.
       12.     The assessment was conducted by a team which consisted of two
       expert assessors and a representative of the Global Forum Secretariat: Mrs.
       Mônica Sionara Schpallir Calijuri, Head of Larger Taxpayer Unit, Federal
       Revenue Secretariat of Brazil; Ms. Helen O’Grady, Office of the Revenue
       Commissioners, Ireland; and Ms. Mary O’Leary and Mr. Mikkel Thunnissen
       from the Global Forum Secretariat. The assessment team examined the legal
       and regulatory framework for transparency and exchange of information and
       relevant exchange of information mechanisms in Slovenia.




PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
10 – INTRODUCTION

Overview of Slovenia

      13.      Slovenia is situated in South-Central Europe, bordering Italy to the
      west, Austria to the north, Croatia to the south and southeast and Hungary
      to the northeast. The land mass of Slovenia covers 20 273 square kilome-
      tres. The population of Slovenia is estimated to be 2.05 million 1 and the
      official language spoken is Slovene. In those municipalities where Italian
      or Hungarian national communities reside, Italian and Hungarian are also
      official languages. Slovenia’s capital is Ljubljana with approximately 272 000
      inhabitants 2.
      14.      Slovenia is one of the states of former Yugoslavia and gained inde-
      pendence on 25 June 1991. Slovenia’s economic development has been strong
      since its accession to the European Union in 2004. During the period 1995–
      2008, economic growth in Slovenia was stable, reaching an average slightly
      above 4%. However, since the global economic crisis, this rate has slowed and
      its growth rate in 2011 was -0.2%. Slovenia’s Gross Domestic Product (GDP)
      was EUR 35.6 billion in 2011. Agriculture, forestry, and fishing comprise
      a comparatively low 2.2% of GDP with other industries comprising 35.2%
      and services 62.6%. The main other industries include chemicals, electrical
      engineering, electronics, food processing, metal, motor vehicles, lumber,
      pharmaceuticals and textiles. Slovenia’s trading partners tend to be mainly
      other Eurozone countries, with its main trading partners being Germany,
      Austria, Italy, France and Croatia. 3
      15.      Outward Foreign Direct Investment (FDI) peaked in 2007 at
      USD 1 802 million. However, largely owing to the global economic crisis this
      has since decreased significantly and by 2011 was USD 112 million. The level
      of inward FDI in Slovenia is one of the lowest in the EU per capita and was
      last reported at USD 999 million in 2011. 4
      16.    Slovenia has been a member of the European Union (EU) since
      1 May 2004. It has also been a member of the Economic and Monetary Union
      since May 2004 and adopted the euro as its national currency on 1 January
      2007. Slovenia is a member of the World Trade Organisation (WTO), the
      North Atlantic Treaty Organisation (NATO), the United Nations (UN) and
      the Organisation for Economic Cooperation and Development (OECD).

1.    October 2011 estimate by the Republic of Slovenia, www.vlada.si/en.
2.    See footnote 1.
3.    The data in this paragraph is derived from data as published by the Republic of
      Slovenia, www.vlada.si/en and the Statistical Office of the Republic of Slovenia,
      www.stat.si.
4.    Data drawn from the United Nations Conference on Trade and Development
      (UNCTAD), available at www.unctadstat.unctad.org.


                    PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
                                                                                      INTRODUCTION – 11



       Legal system
       17.      The basis for the Slovene system of Government is to be found in its
       Constitution, which was adopted on 23 December 1991. Slovenia is a demo-
       cratic republic and a social state governed by law. Pursuant to the separation
       of powers doctrine, the authority of the state is based on the separation of
       legislative, executive and judicial powers, with a parliamentary system of
       government. The National Assembly (being the highest legislative authority),
       comprised of 90 deputies with elections held every four years, is regarded as
       the Slovene Parliament. However, the National Council, the representative
       body for a number of interest groups such as employers, farmers and local
       interests, also exercises some minor legislative powers (making the system of
       government as recognised by the Constitutional Court of Slovenia as ‘incom-
       pletely bicameral’).
       18.      Slovenia has inherited a civil legal system owing to its once form-
       ing part of the Austrian-Hungarian Empire. The Constitution is the state’s
       supreme law and all laws passed must be in conformity with the Constitution.
       All laws passed must also be in conformity with generally accepted prin-
       ciples of international law and with all treaties that have been ratified by
       the National Assembly. Treaties once they are ratified and published are
       directly applicable (s. 8 of the Constitution). The National Assembly rati-
       fies treaties by a majority of votes cast by those deputies present. (s. 86 of
       the Constitution). Judicial power in Slovenia is exercised by the courts. All
       courts in Slovenia are regular courts. They are independent in the exercise
       of their functions and they must operate in accordance with the Constitution,
       and the rule of law. The court system consists of courts with both general and
       special jurisdiction. Courts with general jurisdiction include 44 local courts,
       which are courts of first instance for both criminal and civil matters within
       their jurisdiction. There are 11 regional courts which are the courts of first
       instance for both criminal and civil matters when the jurisdiction of the local
       courts is exceeded and 4 higher courts which are courts of appeal from both
       the local and regional courts. The Supreme Court is the highest court with
       37 judges who are elected by the National Assembly. Appeals from all lower
       courts are made to the Supreme Court. Special courts comprise four labour
       courts and a social court (which rule on labour-related and social insurance
       disputes), and the Administrative Court, which deals with administrative
       matters and has the status of a higher court. There is also a Constitutional
       Court which upholds the constitutionality and legality of the legislative acts
       as passed by the National Assembly.




PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
12 – INTRODUCTION

      Financial sector
      19.     Although a large portion of the Slovene economy remains in state
      hands, in recent years a certain amount of privatisation has been seen in
      the banking sector. The financial sector is mainly regulated by the Banking
      Act, the Financial Instruments Market Act, the Investment Funds and
      Management Companies Act and the Insurance Act.
      20.      As at June 2012, Slovenia had 20 banks (one of them is currently
      in the process of liquidation), 3 savings banks and 3 branches of foreign
      banks. Banks in Slovenia are supervised by the Bank of Slovenia whose
      competences are set out in the Bank of Slovenia Act. The Bank of Slovenia
      acts in a supervisory role, ensuring that banks apply the standards set by and
      recommendations of the competent national and international institutions
      and setting out rules for the safe and sound operation of banks. The Bank of
      Slovenia exercises this control by reviewing reports and other documentation
      of banks to which it has direct access and the imposition of control meas-
      ures. The Slovene stock exchange is regulated by the Financial Instruments
      Market Act. Investment funds and management companies are regulated
      by the Investment Funds and Management Companies Act which are all
      in line with the EU capital markets legislation most notably the Markets in
      Financial Instruments Directive and Undertakings for Collective Investment
      in Transferable Securities Directive (UCITS). As at June 2012, there were 23
      brokerage companies, 10 investment funds management companies and 1
      stock exchange market (Ljubljana Stock Exchange) in Slovenia.
      21.      Capital markets are supervised by the Securities Market Agency the
      task of which is to maintain a safe, transparent and efficient market in financial
      instruments. By exercising control over the brokerage companies, those banks
      engaged in investment services, management companies, investment funds,
      mutual pension funds and publicly traded companies, it aims to achieve a level
      playing field for efficient operation of a market in financial instruments.
      22.      The core elements of Slovenia’s Anti Money Laundering (AML) regime
      are set out in the Slovene Criminal Code, the Prevention of Money Laundering
      and Financing of Terrorism Act (PMLTFA) and some sector specific laws.
      Pursuant to the PMLTFA, service providers are required to carry out customer
      due diligence (CDD) when establishing a business relationship by establishing
      and verifying the identity of their customer and the beneficial owner. Supervision
      of these obligations lies primarily with the Office for Money Laundering
      Prevention, although for specific sectors the supervisor of that sector (such as the
      Bank of Slovenia in respect of banks) also has supervisory powers.




                    PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
                                                                                      INTRODUCTION – 13



       Business registration
       23.      The Business Register is the central database of all businesses within
       Slovenia which carry out profit and non-profit activities, in their own right
       or as the branch of a foreign company. The register is maintained and admin-
       istered by the Agency of the Republic of Slovenia for Public Legal Records
       and Related Services (AJPES). The business register is directly connected
       to the Court Register, therefore all data entered into the Court Register are
       immediately entered into the business register. The Court Register is kept
       as a computerised database by the competent court, but is also administered
       by AJPES. To facilitate the process of registration “a one stop shop” system,
       called “point VEM”, was created in 2009. Point VEM enables entrepreneurs
       or members of a limited liability company to perform certain actions that
       they are obliged to perform under law in one place. Services provided include
       amongst others: registration of companies, entry of companies onto the court/
       business register, registration of company changes, strike-off of companies,
       registration of tax data, registration for VAT purposes, obtaining permis-
       sion to set up a small business and registration of workers for social security
       purposes. Foreign persons are also able to register as a sole proprietor or
       company on the provision of foreign identity documents and the provision of
       a valid Slovene tax number.

       Taxation and international cooperation
       24.      The Constitution grants the Government the right to impose taxes.
       The tax year is the calendar year, but in the case of legal entities the tax year
       can be different from the calendar year and instead may be equal to account-
       ing year of the business. The tax system in Slovenia consists of three main
       categories of taxes: direct taxes on income, direct taxes on property and indi-
       rect taxes.
       25.      Corporate income tax is regulated by the Corporate Income Tax
       Act. All legal persons carrying out commercial activities and which have
       their registered head office or place of effective management in Slovenia
       (including companies, partnerships, investment funds, banks, insurance
       companies, and other legal persons) are subject to corporate income tax on
       their worldwide income. Non-residents (legal persons which do not have their
       headquarters in Slovenia or their place of effective management in Slovenia)
       are subject to corporate income tax only on that part of their income that has
       its source in Slovenia. Certain legal persons engaged in non-profit activities
       are exempt from corporate income tax such as institutes, associations, foun-
       dations, religious communities, political parties or trade unions.
       26.    The corporate income tax rate is 18% (gradually reducing to 15% by
       2015) with a special rate of 0% applying to investment funds, pension funds



PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
14 – INTRODUCTION

      and insurance companies for pension plans, where certain conditions are ful-
      filled. The special rate of 0% applies also to venture capital companies which
      are established under the Venture Capital Companies Act. Companies with
      income liable to 0% must submit a separate tax return in respect of that part
      of their activity.
      27.      Individuals resident in Slovenia are subject to personal income tax in
      respect of their worldwide income. Non-resident individuals are only liable
      to personal income tax on income derived from Slovenia. Personal income
      tax is regulated by the Personal Income Tax Act which distinguishes between
      six categories of income: income from employment, business income, income
      from basic agriculture and forestry, rental income and royalties, income from
      capital, and other income accruing to persons liable to tax in Slovenia. Tax
      on interest, dividends and capital gains is paid according to a flat income tax
      rate of 20% (rising to 25% in 2013) with reduced rates for capital gains where
      certain criteria are fulfilled. All other income (usually referred to in Slovenia
      as “active income”) is paid during the tax year in the form of advance tax
      payments at progressive rates ranging from 16% to 41%. Any such advance
      tax payment is treated as a final tax for a non-resident, whilst for residents it
      is treated as a prepayment of tax.
      28.     Slovenia has 54 Double Taxation Conventions (DTCs) and 2 Tax
      Information Exchange Agreements (TIEAs) in place with its main trading
      partners since gaining its independence in 1991. It has also signed the OECD/
      CoE Convention on Mutual Administrative Assistance in Tax Matters. Finally,
      Slovenia exchanges information with other EU member states under various
      EU instruments.

Recent developments

      29.      A new EU Mutual Assistance Directive (EU Council Directive 2011/16/
      EU) was adopted by the European Council on 15 February 2011 and will come
      into force on 1 January 2013. Slovenia is currently preparing to transpose the
      new Directive into its domestic legislation, which is envisaged to be finalised
      in the course of 2012.




                    PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
                               COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION – 15




                      Compliance with the Standards




A. Availability of Information



Overview

       30.      Effective exchange of information requires the availability of reliable
       information. In particular, it requires information on the identity of owners
       and other stakeholders as well as information on the transactions carried out
       by entities and other organisational structures. Such information may be kept
       for tax, regulatory, commercial or other reasons. If such information is not
       kept or the information is not maintained for a reasonable period of time, a
       jurisdiction’s competent authority may not be able to obtain and provide it
       when requested. This section of the report describes and assesses Slovenia’s
       legal and regulatory framework on availability of information.
       31.      Companies and partnerships (including economic interest groupings)
       formed in Slovenia must register in the Court Register and Tax Register.
       Full ownership information on limited liability companies and partnerships
       is available in these registers. In respect of public limited companies and
       limited partnerships with share capital, their share registers are maintained
       by the Central Securities Clearing Corporation, specifically established for
       that purpose. These registers contain information on the owners of both reg-
       istered and bearer shares. Foreign companies must also be registered when
       establishing a branch in Slovenia or when they are managed and controlled
       in Slovenia. However, no ownership information has to be provided upon
       registration, nor is such information available otherwise. Similarly, owner-
       ship information on foreign partnerships carrying on business in Slovenia or
       deriving taxable income is not consistently available. Nominee shareholders


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16 – COMPLIANCE WITH THE STANDARDS: AVAILABILITY OF INFORMATION

      acting by way of business must identify the person for whom they act as a
      legal owner under AML/CFT legislation.
      32.     Although the concept of a trust is not recognised in Slovenia,
      residents may act as a trustee or trust administrator of a foreign trust. The
      combination of the obligations under AML/CFT legislation and the general
      tax obligations to maintain and submit information to the tax authorities,
      permit that information regarding the settlors, trustees and beneficiaries of
      foreign trusts is available to the Slovene authorities. It can therefore be con-
      cluded that Slovenia has taken reasonable measures to ensure that ownership
      information is available in respect of trusts.
      33.     The Register of Foundations contains information on the founders
      and persons authorised to represent the foundation of all foundations. As
      foundations may only be established for beneficial or charitable purposes,
      they may not be created to benefit named individuals or solely members of a
      family.
      34.       A general obligation to keep accounting records is in place in respect
      of all relevant entities and arrangements. Whilst obligations exist for all enti-
      ties and arrangements to keep underlying documentation, these obligations
      are worded in a general way and do not go into detail regarding the type of
      underlying documentation to be kept, which may lead to an uneven applica-
      tion. It is therefore recommended that Slovenia clarifies its legal requirements
      to keep all underlying documentation. The retention period under tax law,
      which applies to all relevant entities, is connected to the statute of limitations,
      which is ten years. In respect of individuals who act, not by way of business,
      as a trustee of a foreign trust, the retention period for records is five years.
      35.     The AML/CFT legislation ensures that all records pertaining to
      the accounts as well as to related financial and transactional information is
      required to be kept by Slovene banks. In addition, certain information on
      transaction accounts is available through a public register.
      36.      Enforcement provisions are in place in respect of the relevant obliga-
      tions to maintain ownership and identity information for all relevant entities
      and arrangements. The effectiveness of the enforcement provisions which are
      in place in Slovenia will be assessed as part of its Phase 2 review.




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A.1. Ownership and identity information
 Jurisdictions should ensure that ownership and identity information for all relevant
 entities and arrangements is available to their competent authorities.


       Companies (ToR A.1.1)
       37.     The Companies Act (CA) is the central piece of legislation governing
       the establishment of and further arrangements with respect to companies.
       Under the CA, the following types of companies may be incorporated:

                d.o.o.): companies formed by a contract between one or more persons
                that become members upon the formation of the company. A company
                may have a maximum of 50 members and must have a subscribed
                capital of at least EUR 7 500. Members are not liable for the liabilities
                of a limited liability company. As at 31 March 2012 there were 60 242
                limited liability companies registered in Slovenia.

                by one or more persons that shall adopt the company’s articles of
                association. The capital is divided into shares and the minimum
                amount of the capital stock is EUR 25 000. The shareholders are not
                liable to creditors for the obligations of the company. As at 31 March
                2012 there were 898 public limited companies registered in Slovenia.

                – k.d.d.): companies in which at least one person is liable for the
                liabilities of the company with all his assets (general partner) while
                the limited shareholders who have a share in the subscribed capital
                are not liable for the liabilities of the company to creditors. As at
                31 March 2012 there were two limited partnerships with share capital
                registered in Slovenia.
       38.     As Slovenia is a member of the EU, it is also possible to establish an
       SE (Societas Europaea) 5, a European public limited liability company, under
       the CA. The rules that apply to public limited companies apply to SEs as well,
       unless indicated otherwise. 6 As at 31 March 2012, no SEs were registered in
       Slovenia.



5.     See Council Regulation (EC) No. 2157/2001 of 8 October 2001 on the Statute for
       a European company (SE).
6.     Articles 5 and 10 of Council Regulation (EC) No. 2157/2001 of 8 October 2001
       on the Statute for a European company (SE).


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      39.     In addition, the Cooperatives Act provides that cooperative enti-
      ties may be established in Slovenia. These entities must have at least three
      members and their purpose must be to promote the economic benefit of
      their members. Information on the members of a cooperative entity must be
      entered in the Court Register and the Tax Register in the same fashion as for
      limited liability companies (ss. 3 and 4 Court Register Act and s. 45(1) Tax
      Administration Act). As at 31 March 2012 there were 338 cooperative entities
      registered in Slovenia.
      40.      A company obtains legal personality upon its entry in the Court
      Register (s. 5(1) CA). An application for registration must be submitted within
      15 days of the fulfilment of the conditions for entry in the register, i.e. when
      all other (legal) formalities for setting up a specific type of company are
      finalised (s. 47(3) CA). The registration procedures are regulated by the Court
      Register Act in conjunction with the CA. As explained in the Introduction, a
      “one stop shop” system has been created to assist limited liability companies
      and entrepreneurs starting a business fulfil certain legal obligations (regis-
      tration in different registers, obtaining of licenses etc.) either online or at the
      VEM office. Not all services are available online and in certain cases these
      must be performed at the VEM or a notary’s office. In all other cases the
      formation of a company is carried out at a notary’s office.

      Limited liability companies
      41.     The contract by which a limited liability company (LLC) is formed
      is made between all the members. It can be concluded in the form of a notary
      record or a special form as determined by the minister with responsibility for
      the economy (s. 474(1) and (6) CA). This contract must state (s. 474(3) CA):
          (a) the name, surname and address or the registered name and registered
              office of each of the members;
          (b) the registered name, registered office and activity of the company;
          (c) the amount of the share capital and of each subscribed contribution, and
              the members who invested each subscribed contribution and their share;
          (d) the duration of the company if it is formed for a fixed period; and
          (e) any obligations which the members have towards the company other
              than payment of the subscribed contribution and any obligations
              which the company has towards the members.
      42.       The shares of the members can be disposed of only through a con-
      tract in the form of a notary record (s. 481(3) CA), and such disposition is only
      valid after the person who has acquired the shares has reported and demon-
      strated this to the manager of the LLC (s. 482(1) CA).



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       43.     Registration of an LLC in the Court Register is required to obtain
       legal personality (s. 5(1) CA). An application for the first entry in the Court
       Register must contain the registered name, the activity, the registered office
       and other data determined by law (s. 47(1) CA). Section 478(1) CA requires
       the registration application to be accompanied by the original contract of
       members or a verified copy, which as stated above contains identification
       data on all members, as well as a separate list of members and their sub-
       scribed contributions.
       44.      The Court Register Act (CRA) contains provisions confirming that
       the information to be submitted by an LLC upon registration includes the
       contract of members (ss. 28(1) and 28(a)(1)) and, with respect to the members,
       the following data (s. 4(1)(6)):
           (i) identification data (name, address and identification number, see
               s. 2(b) CRA);
           (ii) type and extent of liability for the obligations of the LLC; and
           (iii) date of entry and, if applicable, date of strike-off.
       45.      In general, any change in the registered information must be reported
       for entry in the Court Register within 15 days of its occurrence (s. 48 CA).
       With respect to the contract of members or the list of members, changes
       must be reported within three days (s. 478(2) CA). Failure to register and to
       register any changes is punishable with a fine of between EUR 16 000 and
       EUR 62 000 on the company and between EUR 1 000 and EUR 4 000 on the
       individual responsible for the failure (s. 685(1)(3) and s. 685(2) CA).

       Public limited companies
       46.      All shares in a public limited company must be in “book-entry” form
       (s. 182 CA), meaning that there is no physical (written) share but the company
       will meet all obligations to the person that is entered in the central register
       of securities as the legal owner of the share (s. 2(1) Book Entry Securities
       Act (BESA)). This central register is held by the Central Securities Clearing
       Corporation created for that purpose and consists of a computerised database
       into which the rights derived from book-entry securities, the holders of these
       rights at any given time and any third-party rights with respect to the securi-
       ties are recorded (s. 3 BESA). Section 85(2) BESA specifically gives the tax
       authorities the right to obtain a printout of the information about individual
       holders of securities.
       47.      The ‘Operation Rules’ as issued by the Central Securities Clearing
       Corporation prescribe the rules on maintaining the central register including
       an accurate definition of the types of securities, how they are to be admin-
       istered, a description of the types of entry in the central register, and more


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      details on the system for recording orders for entries in the central register,
      matching, and making entries (s. 23 BESA). Section 82 of these Operation
      Rules prescribes the personal data that must be maintained on holders of
      securities, which includes the name, surname and address of natural persons,
      the registered name and seat of legal entities and the uniform identification
      name, registered name and seat of branches of legal entities. The person for
      whose benefit a book-entry share is entered in the central register is the legal
      holder (s. 16(2) BESA).
      48.       When issuing shares, the company delivers an issue order to the
      Central Securities Clearing Corporation containing details identifying the
      beneficiaries (s. 11 BESA). Any subsequent transfer on a regulated market
      (i.e. a stock market) or in a multilateral trading system (MTF) is recorded by
      the trading organiser or MTF operator via means of a notification entered in
      the central register (s. 22 BESA). This notification takes the form of a matched
      double-entry order giving details of both the seller/deliverer and purchaser/
      recipient. Any transfer of shares that arises outside the regulated market or
      multilateral trading system is made on the basis of an order of the seller and
      confirmation of the buyer, and the recording of such security transfers is car-
      ried out by the Central Securities Clearing Corporation (s. 6 of BESA).
      49.     The obligation that all shares in a public limited company must be in
      “book-entry” form was introduced when the CA entered into force in May
      2006. Public limited companies then had until 1 July 2007 (six months from
      the date of the introduction of the euro) to convert all their shares issued in
      written form into “book-entry” shares (s. 695(7) CA). Until the completion
      of such conversion public limited companies were required to keep their
      own share register of registered shares containing ownership information
      (ss. 235 and 236(3) CA). The rules for public limited companies to keep a
      share register are still included in the CA, but are now obsolete. It is clarified
      in section 65 BESA that the Central Securities Clearing Corporation shall
      keep a share register on behalf and for the account of the issuers of shares in
      “book-entry” form.
      50.      It should be noted that public limited companies are also required to
      register in the Court Register under section 3 CRA. However, public limited
      companies are exempt from registering information on its members in the
      Court Register (s. 4(3) CRA); as described above, this information is available
      in the central register kept by the Central Securities Clearing Corporation.

      Limited partnerships with share capital
      51.     Limited partnerships with share capital have at least one general
      partner and one or more shareholders. With respect to the shares and share-
      holders, the same rules apply as for public limited companies (s. 464(3) CA),



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       meaning that identity information on the shareholders will be available in the
       central register kept by the Central Securities Clearing Corporation.
       52.       Limited partnerships with share capital must register in the Court
       Register (s. 3 CRA). With respect to the general partner(s) registration is
       required of (i) identification data (name, address and identification number),
       (ii) the type and extent of liability for the obligations of the entity and (iii) the
       date of entry and, if applicable, date of strike-off (s. 4(1)(6) CRA). Any
       change in this information must be reported for entry in the Court Register
       within 15 days of its occurrence (s. 48 CA).

       Tax law
       53.      Under the Tax Administration Act (TAA) the Slovene tax authorities
       maintain the Tax Register. All legal entities registered in another Slovene
       register are entered in the Tax Register (s. 42(5) TAA). As all companies
       must be registered in the Court Register, they will also be entered in the Tax
       Register. Registration is done by the tax authorities ex officio on the basis of
       the information in the Court Register and other registers (s. 45(1) TAA). Some
       additional information relevant for tax purposes must be communicated sepa-
       rately to the tax authorities.
       54.      The list of information that should be included in the Tax Register
       includes the members of a legal entity (s. 41(2)(11) TAA). In respect of LLCs
       this information can be drawn from the Court Register and will therefore be
       included in the Tax Register as well. Public limited companies and limited
       partnerships with share capital do not have to register their members in the
       Court Register and this information is therefore also not directly available in
       the Tax Register. However, as described above, information on the members
       of these entities is available with the Central Securities Clearing Corporation.
       55.      Changes in the information registered with the Court Register will be
       obtained by the tax authorities ex officio from the other registers maintained
       in Slovenia if available, which is the regular procedure. Any other changes
       must be notified by the company within 15 days of their occurrence (s. 47
       TAA). Any failure to notify the tax office of changes within 15 days will be
       subject to a fine between of between EUR 210 and EUR 1200 (s. 51(2) TAA).

       Ownership information held by service providers
       56.     Section 4(1)(16)(l) of the Prevention of Money Laundering and
       Terrorist Financing Act (PMLTFA) includes persons who provide com-
       pany services, such as the formation of companies and the provision of a
       head office or administrative address, in the definition of “organisations”,
       which means that any person providing such services is subject to certain



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      obligations under the PMLTFA. Consequently, company service providers are
      required to carry out customer due diligence (CDD) when establishing a busi-
      ness relationship by establishing and verifying the identify of their customer
      and the beneficial owner (ss. 7 and 8 PMLTFA).
      57.     With respect to corporate entities, a beneficial owner is any natural
      person who owns directly or indirectly at least 25% of the shares or voting or
      other rights in the entity, or otherwise provides funds and can on that basis
      exercise control over or substantially influence management decisions con-
      cerning financing and business operations (s. 19(1) PMLTFA).
      58.      Establishing and verifying the identity of a company and its
      beneficial owners must be done by inspecting the original or certified docu-
      mentation from the Court Register or other public register (ss. 14(1) and 20(2)
      PMLTFA). Where such documentation is not sufficient other documents or
      statements must be obtained from the company (s. 20(3) PMLTFA). As the
      Court Register contains full information on the (legal) owners of LLCs, this
      information should be available to the service providers as well. Information
      on the ownership of public limited companies and limited partnerships
      with share capital is not available in the Court Register. It is therefore not
      guaranteed that service providers will have full ownership information on
      these entities available, as they are only required to identify the company’s
      beneficial owners owning at least 25% of the shares or voting rights in that
      company. However, as described above, this information is available in the
      registers kept by the Central Securities Clearing Corporation.
      59.      Service providers must keep the information obtained while conduct-
      ing CDD for a period of at least ten years after the termination of the business
      relationship or the completion of a transaction (s. 79(1) PMLTFA). This infor-
      mation must be regularly updated as part of the ongoing monitoring as well
      (s. 22 PMLTFA). Failure to carry out CDD or to maintain the documentation
      for at least ten years can lead to a fine of up to EUR 120 000, depending on
      the seriousness of the offence (ss. 91-93 PMLTFA).

      Foreign companies
      60.       Any foreign company that establishes a branch in Slovenia through
      which it pursues an activity with a view to making a profit must register in the
      Court Register (s. 676 CA and s. 3(2) CRA). The application for registration
      does not include the furnishing of ownership information, but must be accom-
      panied by, among other details, an extract from the register disclosing the
      content and date of registration of the parent company and a verified copy of
      the rules or articles of association (s. 677(2) CA). It would then depend on the
      law of the jurisdiction where the company was incorporated whether the reg-
      ister of the company’s articles of association contain ownership information.



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       61.      Foreign companies having their place of effective management in
       Slovenia are regarded as resident for tax purposes (s. 5(1) Corporate Income
       Tax Act). As such, they must submit an annual tax return to the tax authorities
       (ss. 356 and 358 of the Tax Procedure Act), but these tax returns do not require
       ownership information to be furnished.
       62.      All persons that are the subject of registration in the Court Register,
       including foreign companies establishing a branch in Slovenia as well as for-
       eign companies having their place of effective management in Slovenia, are
       entered in the Tax Register (ss. 42(5), 45(1) and 45(2) TAA). This is generally
       done by the tax authorities by taking the information from the Court Register.
       Some additional information must be furnished separately. Section 41(2)
       (11) TAA states that information about the members of a company shall be
       included in the Tax Register and the registration form does include fields
       to enter two members. However, the tax authorities do not rely on the reg-
       istration form for ownership information and take that information directly
       (ex officio) from the Court Register under section 45(1) TAA. As the Court
       Register does not contain ownership information on foreign companies, the
       Tax Register does not contain this information.
       63.      Companies formed outside of Slovenia are not required to provide
       ownership information on registration when setting up any kind of activity in
       Slovenia, and ownership information on such companies is also not otherwise
       available. It is therefore recommended that Slovenia ensures that ownership
       information on foreign companies with sufficient nexus with Slovenia (in
       particular having their place of effective management in Slovenia) is available
       in all cases. Slovenia has advised that as of June 2012 there were two foreign
       companies that have their place of effective management in Slovenia.

       Nominees
       64.     Any person acting (or arranging for another person to act) by way
       of business as a nominee shareholder for another person is considered to
       be a trust and company service provider under section 3(2)(6) PMLTFA.
       Consequently, such persons are required to carry out CDD when establishing
       a business relationship and identify the person(s) for whom they act as a legal
       owner in accordance with sections 7-17 PMLTFA. Documentation in respect
       of the CDD carried out must be maintained by the nominee for at least ten
       years after the termination of the business relationship with the person
       for whom they act (s. 79(1) PMLTFA). This information must be regularly
       updated as part of the ongoing monitoring as well (s. 22 PMLTFA). Failure
       to carry out CDD or to maintain the documentation for at least ten years can
       lead to a fine of up to EUR 120 000, depending on the seriousness of the
       offence (ss. 91-93 PMLTFA).



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      65.      A specific rule exists in respect of authorised brokerage companies 7.
      When they manage the shares of their clients through their own account,
      they must keep the following information on their clients: personal name, tax
      identification number, permanent or temporary address of a natural person
      or registered office and registered name of a legal entity (s. 247 Financial
      Instruments Market Act).
      66.      In addition, section 40(1) BESA provides for the registration of cer-
      tain third-party rights to book-entry shares, i.e. shares entered in the central
      register held by the Central Securities Clearing Corporation in respect of
      which the company will meet all obligations to the person that is entered
      as the legal owner of the share. Public limited companies and limited part-
      nerships with share capital must have shares only in this form. One of the
      third-party rights that can be registered is a beneficial interest in the shares,
      meaning the right to the payment of dividends or other returns yielded by the
      shares (s. 49 BESA). Upon registration of such beneficial interest, the name
      and address or registered office of the beneficiary is entered in the central
      register (s. 40(2) BESA).
      67.     If a person holds shares on behalf of another person as a nominee not
      by way of business, the above requirements do not prescribe the availability
      of ownership information unless this is registered with the Central Securities
      Clearing Corporation. As this group of nominee shareholders would primar-
      ily consist of persons performing services for free or in the course of a purely
      private non-business relationship, it is likely to be limited. A practical assess-
      ment of the matter will take place in the Phase 2 peer review of Slovenia.

      Conclusion
      68.     All companies incorporated in Slovenia must register in the Court
      Register and Tax Register. Legal ownership information on limited liability
      companies is available in these registers. In respect of public limited compa-
      nies and limited partnerships with share capital full ownership information
      is maintained by the Central Securities Clearing Corporation, specifically
      established for that purpose. Foreign companies must be registered when
      establishing a branch in Slovenia including having their place of effective
      management in Slovenia. However, no ownership information has to be pro-
      vided upon registration. Nominees acting by way of business must identify
      the person(s) for whom they act as a legal owner under AML/CFT legislation.


7.    A brokerage company is a legal entity with its registered office in Slovenia and
      which is not a bank the regular occupation or business of which is the provision
      of investment services for third parties or investment activities (s. 11 Financial
      Instruments Market Act).


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       Bearer shares (ToR A.1.2)
       69.     Section 175(1) CA provides that the shares of a public limited com-
       pany may be issued to bearer. This is therefore also possible in respect of the
       shares in a limited partnership with share capital (s. 464(3) CA).
       70.      The articles of association of the company must set out whether the
       issued shares are registered shares or bearer shares (s. 183(1) CA). Where the
       articles of association so provide, bearer shares may be converted into regis-
       tered shares, and registered shares may be converted into bearer shares, upon
       a request of the holder of the share (s. 184 CA). These rules do not ensure the
       availability of information on the owners of the bearer shares.
       71.      Ownership information on the shareholders of public limited com-
       panies and limited partnerships with share capital is available in the central
       register kept by the Central Securities Clearing Corporation (see also section
       A.1.1 – Public limited companies and Limited Partnerships with share capi-
       tal). The central register contains a designation of the share as a registered or
       bearer share (s. 4(1)(3) BESA). As at 31 December 2011, 28 companies had
       issued bearer shares. Irrespective of the form of the share, information on the
       holder of the share and on any transfer of the share is recorded (ss. 3, 6, 16
       and 22 BESA). The central register therefore contains full identity informa-
       tion on the owners of bearer shares.
       72.     Owners of bearer shares can enforce their rights (voting rights, enti-
       tlement to dividend etc.) towards the company by obtaining a certificate from
       the Central Securities Clearing Corporation stating the number of shares
       owned and their class, as well as an indication of the entitlement(s) in respect
       of which the certificate is issued (s. 67 BESA). This procedure ensures
       anonymity of the owner of the bearer share towards the company, while
       information on his/her identity is available in the central register and may be
       obtained by the authorities if necessary (see also Part B of this report).
       73.      As explained under A.1.1, the obligation that all shares in a public
       limited company or a limited partnership with share capital must be in
       “book-entry” form was introduced when the CA entered into force in May
       2006. Public limited companies then had until 1 July 2007 (six months from
       the date of the introduction of the euro) to convert all their shares issued in
       written form into “book-entry” shares (s. 695(7) CA). The procedure for con-
       verting issued shares into book-entry shares is described in section 68 BESA,
       which prescribes that the company must make a conversion decision and
       publish this decision within 15 days in daily newspapers in Slovenia, calling
       on any shareholders to deliver their shares to the Central Securities Clearing
       Corporation (ss. 68(2) and 68(3) BESA). The time limit for such conversion
       should not be less than 30 days or longer than 90 days (s. 68(3) BESA). On
       the day of publication of the conversion decision in the daily newspapers,



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      the shares which are the subject of this decision shall become void and may
      be used by their holders only as an identity document for exercising their
      conversion rights (s. 68(4) BESA). This means that any bearer shares issued
      before 1 July 2007 that have not been converted into book-entry shares, are
      now void, as the conversion right has ended 90 days after that date at the
      latest.

      Partnerships (ToR A.1.3)
      74.     Partnerships are governed by the CA and referred to as “personal
      companies” (s. 3(3) CA). Like companies, they are legal persons and may
      therefore own property in their own name (s. 4 CA). Two main types of part-
      nerships can be distinguished:

              also referred to as an “unlimited company”, it is formed by two or
              more persons who are liable for the obligations of the partnership
              with all their assets (s. 76(1) CA). As at 31 March 2012 there were
              1 529 general partnerships registered in Slovenia.

              more persons where at least one of the partners (general partner) is
              liable for the liabilities of the company with all his assets and at least
              one other partner (limited partner) is not liable for the liabilities of
              the company (s. 135(1) CA). As at 31 March 2012 there were 719 lim-
              ited partnerships registered in Slovenia.

      Under a silent partnership, a person (the silent partner) contributes assets to
      another person’s business and obtains the right to participate in the profits of
      that business. This arrangement can be characterised merely as a contract.
      In contrast to general and limited partnerships, silent partnerships are not
      regarded as legal persons (s. 4(1) CA) and can therefore not hold property
      in their own name. They also do not carry on business as such and have no
      income or credits for tax purposes. Silent partnerships in Slovenia do not
      therefore fall within the ToR.
      76.      Finally, an economic interest grouping (EIG, in Slovene: gospodarsko
                                                                                      -
      neurs. The aim of an EIG is to facilitate and accelerate the activities carried
      out with a view to profit by its members and to improve and increase the
      results of these activities, but not to create a profit of its own (s. 563 CA).
      However, an EIG can, in addition to carrying out tasks for its members, carry
      out commercial operations for its own account (s. 565(2) CA). An EIG is con-
      sidered a legal entity in Slovenia and its members are liable for the obligations
      of the EIG with all their assets (s. 566(1) CA). As Slovenia is a member of


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       the EU, it is also possible to establish an EEIG (European Economic Interest
       Grouping). 8 The rules that apply to EIGs apply to EEIGs as well, where they
       are not specifically regulated by EU legislation (s. 577(2) CA). As at 31 March
       2012 there were 163 EIGs and 2 EEIGs registered in Slovenia.
       77.      Both general and limited partnerships as well as EIGs/EEIGs acquire
       legal personality upon registration in the Court Register (ss. 5(1), 565(1) and
       578(1) CA). The following particulars must be submitted upon registration
       (ss. 78 and 136 CA and ss. 4(1) and 5(5) CRA):
            (a) the registered name or business name of the partnership or EIG/EEIG;
            (b) the location of the head office and its business address;
            (c) the legal form;
            (d) the name, address (or registered office in case of a company) and the
                unique identification number 9 of each partner or member;
            (e) in case of a limited partner, the amount of the contribution to the
                capital of the partnership; and
            (f) the date of the partnership contract or EIG/EEIG founding contract
                and its duration if it is established for a fixed period.
       78.      In respect of partnerships, any change in the registered information
       must be reported for entry in the Court Register within 15 days of its occurrence
       (s. 48 CA). Failure to register and to register any changes is punishable with a
       fine of between EUR 16 000 and EUR 62 000 on the partnership and between
       EUR 1 000 and EUR 4 000 on the individual responsible for the failure (s. 685
       CA). In respect of EIGs/EEIGs, changes in the registered information must also
       be reported within 15 days (ss. 6 and 53(1) CRA). Failure to register and to reg-
       ister any changes may lead to a fine of EUR 1 600 on the EIG/EEIG and a fine
       of EUR 600 on the individual responsible for the failure (s. 53 CRA).

       Tax law
       79.      All legal entities registered in another Slovene register are entered in
       the Tax Register (s. 42(5) TAA). As all partnerships and EIGs/EEIGs must be
       registered in the Court Register, they will also be entered in the Tax Register.


8.     See Council Regulation (EC) No. 2137/85 of 25 July 1985 on the European Economic
       Interest Grouping.
9.     The unique identification number is: (i) for natural persons entered in the central
       population register: the personal identification number, (ii) for legal persons
       entered in the business register: the company registration number, and (iii) for
       other persons: the tax number (s. 1a(3) CRA).


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      Registration is done by the tax authorities on the basis of the information in
      the Court Register and other registers (s. 45(1) TAA). Some additional infor-
      mation relevant for tax purposes must be communicated separately to the tax
      authorities. The list of information that should be included in the Tax Register
      includes the members of a legal entity (s. 41(2)(11) TAA). In respect of part-
      nerships and EIGs/EEIGs this information can be drawn from the Court
      Register and will therefore be included in the Tax Register as well. Changes
      in the registered information will also be obtained by the tax authorities ex
      officio from the Court Register (s. 47 TAA).
      80.      Partnerships and EIGs/EEIGs are legal entities and not transparent
      for tax purposes. Therefore they are taxable in their own right (s. 3 Corporate
      Income Tax Act).

      Foreign partnerships
      81.      Any foreign partnership that establishes a branch in Slovenia through
      which it pursues an activity with a view to making a profit must register in
      the Court Register (s. 676 CA and s. 3(2) CRA). There is no specific require-
      ment to furnish ownership information upon registration, but the application
      must be accompanied by a verified copy of the rules or articles of association
      (s. 677(2) CA), which might include details on the identity of the partners.
      82.      If a foreign partnership carries on business in Slovenia or derives tax-
      able income, it will be required to submit a tax return (s. 356 TPA). However,
      this tax return does not have to contain information on all the partners as the
      partnership is taxable in its own right. Ownership information on foreign
      partnerships carrying on business in Slovenia or deriving taxable income
      is therefore not consistently available, and it is recommended that Slovenia
      ensures the availability of ownership information in such cases.

      Conclusion
      83.     All general and limited partnerships as well as EIGs/EEIGs formed
      under Slovene law must be registered in both the Court Register and the
      Tax Register. Upon registration details of all partners or members must be
      submitted. Any changes must be notified within 15 days. Updated ownership
      information on partnerships and EIG/EEIGs is therefore contained in the
      Slovene tax authorities own Tax Register. Ownership information on foreign
      partnerships carrying on business in Slovenia or deriving taxable income is
      not consistently available.




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       Trusts (ToR A.1.4)
       84.     It is not possible to form a trust under Slovene law and there is no
       domestic trust legislation. Slovenia is also not a signatory to the Hague
       Convention on the Law Applicable to Trusts and their Recognition. However,
       there are no restrictions for a resident of Slovenia (other than a notary) to act
       as a trustee or administrator of a trust formed under foreign law. Slovene
       authorities have indicated that they are not aware of any person in Slovenia
       acting at present as a trustee or trust administrator of a foreign trust.

       Anti-money laundering legislation
       85.      Section 4(1)(16)(l) PMLTFA includes persons who provide trust
       services, such as acting by way of business as a trustee, in the definition
       of “organisations”, which means that any person providing such services is
       subject to certain obligations under the PMLTFA. Consequently, professional
       trustees are required to carry out CDD when establishing a business rela-
       tionship by establishing and verifying the identify of their customer and the
       beneficial owner (ss. 7 and 8 PMLTFA).
       86.      The PMLTFA does not contain other specific references to trusts.
       However, trusts are regarded as foreign law entities which accept, administer
       or distribute funds for a particular purpose. With respect to such entities the
       term “beneficial owner” is defined as (s. 19(2) PMLTFA):
            (a) any natural person who is the beneficiary of more than 25% of the
                proceeds of property under management, where the future benefi-
                ciaries have already been determined or can be determined; or
            (b) a person or a group of persons in whose main interest the entity is set
                up and operates, where the individuals that benefit from the entity are
                yet to be determined.
       87.      In general, establishing and verifying the identity of the “beneficial
       owners” must be done by inspecting the original or certified documentation
       from the Court Register or other public register (s. 20(2) PMLTFA). Where
       such documentation is not sufficient other documents or statements must be
       obtained (s. 20(3) PMLTFA). As trusts are not recognised in Slovenia, they are
       not registered in any Slovene register. Ownership information should therefore
       be obtained from the trust’s authorised representative or authorised person,
       which might be the settlor(s) or another trustee. However, no clear obligation
       exists under the PMLTFA for trustees or trust administrators to identify per-
       sons other than the beneficiaries of more than 25% of the trust property.
       88.     Service providers must keep the information obtained while con-
       ducting CDD for a period of at least ten years after the termination of the
       business relationship or the completion of a transaction (s. 79(1) PMLTFA).


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      This information must be regularly updated as part of the ongoing monitor-
      ing as well (s. 22 PMLTFA). Failure to carry out CDD or to maintain the
      documentation for at least ten years can lead to a fine of up to EUR 120 000,
      depending on the seriousness of the offence (ss. 91-93 PMLTFA).

      Tax law
      89.       Residents of Slovenia are taxed on their worldwide income from
      whatever source. This means that trustees or trust administrators of foreign
      trusts who reside in Slovenia and receive income earned by the trust, are sub-
      ject to income tax on that income as if it was their own income. The assets
      and income of the trust are subject to tax as any other assets or income of the
      trustee and should therefore be declared in their tax return. Distributions to
      beneficiaries may be regarded as expenses. Resident trustees or trust admin-
      istrators may only avoid such a tax liability by demonstrating that the income
      should be attributed to another person, such as by providing evidence of the
      existence of a fiduciary relationship (typically the trust deed) and disclosing
      the identity of the settlor(s) and beneficiaries to the tax authorities. In addi-
      tion, any person resident in Slovenia is required to keep records relevant to
      their tax liability in Slovenia and provide such records to the tax authorities
      (ss. 31, 39 and 41 Tax Procedure Act).

      Conclusion
      90.      Although the concept of a trust is not recognised in Slovenia, residents
      may act as a trustee or trust administrator of a foreign trust. Beneficiaries of
      more than 25% of the trust property must be identified by professional trustees
      according to AML/CFT legislation. In addition, the Slovene tax rules attrib-
      ute the income of a foreign trust to the resident trustee or trust administrator,
      unless that person can prove otherwise. The combination of the obligations
      under AML/CFT legislation and the general tax obligations to maintain and
      submit information to the tax authorities, permit that information regarding
      the settlors, trustees and beneficiaries of foreign trusts is available to the
      Slovene tax authorities. It can therefore be concluded that Slovenia has taken
      reasonable measures to ensure that ownership information is available to its
      competent authorities in respect of express foreign trusts with a trustee or trust
      administrator resident in Slovenia. A practical assessment of the matter will
      take place in the Phase 2 peer review of Slovenia.

      Foundations (ToR A.1.5)
      91.     Foundations (ustanova) are regulated by the Foundations Act (FA). A
      foundation is a legal entity (s. 1 FA). Foundations are only allowed to serve
      beneficial or charitable purposes (s. 2 FA). The purpose of a foundation is


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       beneficial if the foundation has been established for purposes in the fields
       of science, culture, sport, education and training, health care, child and disa-
       bled care, social welfare, environmental protection, conservation of natural
       resources and cultural heritage, or for religious purposes and similar. The
       purpose of a foundation is charitable if it has been established for the purpose
       of helping persons who are in need of such help. The income of a founda-
       tion shall be spent exclusively for the implementation of the purpose and the
       operation of the foundation (s. 27 FA). A foundation may not be created to
       benefit named individuals or only members of a family (s. 2 FA). Foundations
       are governed by a Board of Trustees, consisting of at least three members, but
       may have other bodies as well (ss. 21 and 22 FA).
       92.      Upon approval of the deed of establishment, the foundation will be
       registered in the Register of Foundations (s. 13 FA). This register, including
       the deeds of establishment, is public. It contains, among other information,
       details on the founders and of any person who is authorised to represent the
       foundation (such as the members of the Board of Trustees) (s. 14 FA). Any
       changes in the details registered must be notified within 30 days (s. 17a FA).
       Failure to notify can result in a fine of EUR 625.94 on the foundation and a
       fine of EUR 208.65 on the responsible person (s. 35a FA). Updated informa-
       tion on the founders and the persons authorised to represent the foundation is
       therefore available in the Register of Foundations. The same information is
       also available in the Tax Register, as the Slovene tax authorities obtain such
       information ex officio from the Register of Foundations (s. 45(1) TAA). As of
       31 March 2012, there were 244 foundations in Slovenia.

       Enforcement provisions to ensure availability of information
       (ToR A.1.6)
       93.      Jurisdictions should have in place effective enforcement provisions
       to ensure the availability of ownership and identity information, one possibil-
       ity among others being sufficiently strong compulsory powers to access the
       information. This subsection of the report assesses whether the provisions
       requiring the availability of information with the public authorities or within
       the entities reviewed in section A.1 are enforceable and failures are punish-
       able. Questions linked to access are dealt with in Part B.
       94.      Limited liability companies, general and limited partnerships and
       EIGs/EEIGs must register in the Court Register and furnish full ownership
       information upon registration. Any changes must be notified within 15 days.
       In respect of limited liability companies and general and limited partner-
       ships failure to register and to register any changes is punishable with a fine
       of between EUR 16 000 and EUR 62 000 on the company or partnership and
       between EUR 1 000 and EUR 4 000 on the individual responsible for the fail-
       ure (s. 685 CA). In respect of EIGs/EEIGs, failure to register and to register


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      any changes may lead to a fine of EUR 1 600 on the EIG/EEIG and a fine of
      EUR 600 on the individual responsible for the failure (s. 53 CRA).
      95.      The Central Securities Clearing Corporation (CSCC) is responsible
      for keeping the share registers (in respect of both registered shares and bearer
      shares) for public limited companies and limited partnerships with share capi-
      tal. The person for whose benefit a share is entered in the central register is
      the legal holder (s. 16(2) BESA) and the company must meet all obligations to
      the person that is entered in the central register as the legal owner of the share
      (s. 2(1) BESA). As the CSCC is an entity established by law, no specific pen-
      alties apply for failing to keep a share register. Supervision of the CSCC is the
      responsibility of the Securities Market Agency (s. 3(3) BESA), which reviews
      whether the operations of the CSCC are in accordance with the BESA (s. 438
      Financial Instruments Market Act). The Securities Market Agency can
      issue a warning or an order to eliminate any violations, or can withdraw the
      authorisation for the CSCC to perform certain activities (s. 438(3) Financial
      Instruments Market Act).
      96.     Trustees and trust administrators are required to collect and maintain
      certain ownership and identity information regarding the trust under AML/
      CFT legislation. Failure to do so can lead to a fine in the following range:
              Minor offences (s. 93 PMLTFA): between EUR 3 000 and EUR 30 000
              on a legal entity, between EUR 200 and EUR 1 000 on the individual
              responsible within the legal entity and between EUR 1 000 and
              EUR 10 000 on a sole proprietor or self-employed person.
              Serious offences (s. 92 PMLTFA): between EUR 6 000 and
              EUR 60 000 on a legal entity, between EUR 400 and EUR 2 000 on the
              individual responsible within the legal entity and between EUR 2 000
              and EUR 20 000 on a sole proprietor or self-employed person.
              Most serious offences (s. 91 PMLTFA): between EUR 12 000 and
              EUR 120 000 on a legal entity, between EUR 800 and EUR 4 000 on the
              individual responsible within the legal entity and between EUR 4 000
              and EUR 40 000 on a sole proprietor or self-employed person.
      97.       Failure to carry out CDD is regarded as a most serious offence
      (s. 91(1)(2) PMLTFA). Failure to keep the information collected for at least 10
      years is regarded as a serious offence (s. 92(1)(20) PMLTFA).
      98.      Any person resident in Slovenia, including a person acting as a trus-
      tee of a foreign trust, is required to keep records relevant to their tax liability
      in Slovenia and provide such records to the tax authorities (ss. 31, 39 and
      41 Tax Procedure Act). Any failure to do so is punishable by a fine ranging
      between EUR 800 and EUR 10 000 on a sole proprietor or self employed
      individual, a fine ranging between EUR 1 200 and EUR 15 000 on a legal



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       person and a fine ranging between EUR 3 200 and EUR 30 000 on a medium
       or large company (s. 397 (10) TPA
       99.      Foundations must be registered in the Register of Foundations upon
       approval of the deed of establishment by the competent (government) body and
       information on the founders and the persons authorised to represent the foun-
       dations is entered in the register. Any changes in the details registered must be
       notified within 30 days. Failure to notify can result in a fine of EUR 625.94 on
       the foundation and a fine of EUR 208.65 on the responsible person (s. 35a FA).
       100.     Companies, partnerships, EIGs/EEIGs and foundations must also
       register in the Tax Register, which contains full ownership information on
       limited liability companies and partnerships. The tax authorities draw this
       information ex officio directly from other registers. Therefore, there is no
       need for enforcement provisions regarding not registering ownership infor-
       mation with the tax authorities.

       Conclusion
       101.     Enforcement provisions are in place in respect of the relevant obliga-
       tions to maintain ownership and identity information for all relevant entities
       and arrangements. Different penalties can be imposed on the entity itself
       and on the individual responsible for the failure, except in respect of keep-
       ing a share register in respect of public limited companies and partnerships
       limited by shares. However, these share registers are not kept by the entities
       themselves, but by an entity established by law, which is supervised by the
       Securities Market Agency, which can also apply enforcement measures. The
       effectiveness of the enforcement provisions which are in place in Slovenia,
       will be assessed as part of its Phase 2 review.

                  Determination and factors underlying recommendations

                                       Phase 1 determination
       The element is in place.
                  Factors underlying
                  recommendations                               Recommendations
       Ownership information on foreign               Slovenia should ensure that ownership
       companies having sufficient nexus              information on foreign companies
       with Slovenia (in particular, having           with sufficient nexus with Slovenia
       their place of effective management in         (in particular, having their place of
       Slovenia) and on foreign partnerships          effective management in Slovenia)
       carrying on business in Slovenia               and on foreign partnerships carrying
       or deriving taxable income is not              on business in Slovenia or deriving
       consistently available.                        taxable income is available in all cases.




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A.2. Accounting records
       Jurisdictions should ensure that reliable accounting records are kept for all
       relevant entities and arrangements.

      102.     A condition for exchange of information for tax purposes to be effec-
      tive is that reliable information, foreseeably relevant to the tax requirements
      of a requesting jurisdiction, is available, or can be made available, in a timely
      manner. This requires clear rules regarding the maintenance of accounting
      records.

      General requirements (ToR A.2.1)
      103.     All companies must keep books of account and are required to
      compile an annual report and annual financial statements on the basis of the
      closed books of account within three months of the end of the financial year
      (ss. 54(1) and 54(2) CA). The annual report must provide a true and fair pres-
      entation of the assets and liabilities of the company, its financial position and
      profit and loss account (s. 61 CA). It must at least contain a balance sheet, a
      profit and loss statement and annexes with notes to the financial statements
      (s. 60(2) CA). Where the company is a large or medium-sized company 10 or
      a company the shares of which are traded on a regulated market, the annual
      report must also contain a cash flow statement, a capital flow statement and
      a business report describing the development and results of the company’s
      operations and financial position (s. 60(1) CA).
      104.    The books of account must be kept and presented in accordance with
      the Slovene Accounting Standards or the International Financial Reporting
      Standards (s. 54(1) CA). In addition, detailed rules are prescribed in sections
      63 to 70 CA on how the balance sheet, profit and loss account, notes on the
      accounts and the business report should be drawn up and what items they
      should contain.
      105.     The annual reports of large and medium-sized companies and of
      companies the shares of which are traded on a regulated market must be
      audited (s. 57 CA). The audited annual report must then be submitted for pub-
      lication to the Agency of the Republic of Slovenia for Public Legal Records
      and Related Services (referred to as “AJPES”), which also administers the
      Court Register (s. 58(1) CA). Other companies, which are not obliged to have
      their accounts audited, must also submit their annual report to AJPES for

10.   A company is not a large or medium-sized company if two of the following
      conditions are met: (i) number of employees does not exceed 50 (ii) net sales
      income does not exceed EUR 8 800 000 (iii) value of assets does not exceed
      EUR 4 400 000 (s. 55 CA).


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       publication (s. 58(2) CA). Failure to submit the annual report to AJPES can
       result in a fine ranging from EUR 6 000 to EUR 40 000 on the company and
       a fine ranging from EUR 300 to EUR 4 000 on the individual responsible for
       the failure (s. 686(1)(2) CA).
       106.     The rules on keeping books of account and records pertaining to
       domestic companies apply mutatis mutandis to foreign undertakings con-
       ducting business in Slovenia, whether they are tax resident in Slovenia or not
       (s. 680(2) CA).
       107.      Partnerships are subject to similar rules on keeping accounting
       records as companies (s. 53(3) CA). They must also keep books of account
       and compile an annual report and annual financial statement within three
       months of the end of the financial year (ss. 54(1) and 54(2) CA). The annual
       report must at a minimum contain a balance sheet and profit and loss state-
       ment (s. 60(3) CA). The balance sheet must set out the balance of assets and
       liabilities at the end of the year and the profit and loss account must set out
       the income, expenses and operating result in the financial year (ss. 60(4) and
       60(5) CA). Partnerships must also submit their annual report to AJPES for
       publication (s. 58(2) CA).
       108.    As trusts are not recognised in Slovenia, there are no accounting
       rules specifically applicable to trusts. Trustees must, however, keep records
       under tax law and AML/CFT legislation (see below).

       Accounting Act
       109.     Under the Accounting Act (AA) all legal entities not keeping books
       of account in accordance with another act (most notably the Companies Act)
       must keep books of account and prepare annual reports (ss. 1 and 2 AA).
       Such entities must prepare financial statements and operations reports for
       the financial year that must coincide with the calendar year (s. 11 AA). The
       financial statement must present a true and fair value of assets and liabilities,
       revenues and expenses and profit or loss, and shall comprise the balance sheet
       and the profit and loss statement (s. 20 AA). An annual report must also be
       prepared and must contain, in addition to the financial statement, notes to the
       financial statement and a business report (s. 21 AA). EIGs/EEIGs, coopera-
       tive entities and foundations are covered by the AA, as they are legal entities
       in Slovenia. Under section 55 of the Accounting Act penalties for non-com-
       pliance can be imposed on a legal entity in the event of the following:
                a failure to keep books of accounts according to double-entry account-
                ing method;
                for financial statements that fail to give a true representation of assets
                and liabilities, revenues, expenses and profit or loss;



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              a failure to keep accounting documents and books of accounts;
              a failure to value items in financial statements in accordance with
              accounting standards.
      110.    These failures can result in a fine of between EUR 417.29 and
      EUR 25 037.56. In addition, a fine of between EUR 41.73 and EUR 2 086.46
      may also be imposed upon the responsible person of the legal entity (s. 55
      AA). In addition, in respect of foundations, the obligation to keep books
      of account and produce annual reports is also included in section 30 FA. A
      foundation that does not keep books of account in accordance with the law is
      subject to a fine ranging from EUR 834.59 to EUR 16 691.70 (s. 35 FA). The
      individual responsible for the offence may be imposed with a fine between
      EUR 208.65 and EUR 1 043.23 (s. 35 FA).

      Tax law obligations
      111.      All persons that are required to keep books of account and records
      in accordance with any non-tax law are automatically obliged to keep such
      documentation for tax purposes, i.e. in such a way that it enables that person’s
      taxes to be assessed and paid (s. 31(1) TPA). As companies, partnerships,
      EIGs/EEIGs, cooperative entities and foundations are required to keep
      accounting records under the Companies Act and the Accounting Act respec-
      tively, they are also covered by the obligation to keep these for tax purposes.
      As these are all considered legal entities in Slovenia, they are considered
      taxpayers under section 3(1) of the Corporate Income Tax Act, and they are
      therefore required to submit a tax return (even if they are subject to a zero
      rate taxation, see s. 356 TPA). Section 357 TPA further specifies that the fol-
      lowing accounting information must be provided with the corporate income
      tax return:
          (a) profit and loss account or other statement that corresponds to the profit
              or loss account and shows revenues, expenses and results as well as
              notes to these statements made in accordance with the Companies Act
              or other act governing the drawing up of such statements, reports and
              notes, as well as accounting standards;
          (b) balance sheet or other statement that corresponds to the balance
              sheet and shows assets, liabilities as well as notes to the balance
              sheet in accordance with the Companies Act or other act governing
              the drawing up of such balance sheets, reports and notes, as well as
              accounting standards; and
          (c) statement of changes in equity or other statement that corresponds
              to the statement of changes in equity and shows individual changes
              in equity, including net profit allocation and offsetting of losses, and



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                is made in compliance with the provisions of the Companies Act or
                other act governing the drawing up of such statements, reports and
                notes as well as accounting standards.
       112.     The information that a taxpayer has provided to AJPES does not have
       to be provided with the tax return, but in that case the fact that the informa-
       tion was provided to AJPES should be expressly stated in the tax return
       (s. 358(1) TPA). As noted above, all companies and partnerships are required
       to submit their annual report to AJPES, which would contain most of the
       information referred to in section 357 TPA. This information is automatically
       forwarded by AJPES to the tax authorities (s. 59(4) CA).
       113.     Persons that are not obliged to keep accounting records pursuant to
       a non-tax act (generally natural persons) must still keep books of account
       and records for tax purposes (s. 31(2) TPA). Most natural persons carrying
       on business are subject to the same obligations as partnerships or companies,
       depending on the extent of their activity (s. 1 Rules on Books of Account and
       Other Tax Records for Natural Persons carrying out a Business Activity).
       At a minimum, natural persons must keep all documents affecting their tax
       liability (s. 41 TPA).
       114.     If companies, partnerships, EIGs/EEIGs, cooperative entities, foun-
       dations or natural persons would act as trustees of foreign trusts, the income
       earned by the trust is subject to income tax in the hands of that person, unless
       they demonstrate that the income should be attributed to another person. A
       trustee will therefore generally be required to maintain records in respect of
       all transactions in relation to the trust and substantiate the value of assets in
       order to meet tax requirements. The obligation to keep accounting records
       for tax purposes under sections 31 and 41 TPA would therefore also cover the
       accounting records of a foreign trust with a trustee resident in Slovenia.

       AML/CFT legislation
       115.     Under sections 7 and 8 PMLTFA service providers are required to
       conduct CDD and in that process records of transactions should be collected
       (s. 83 PMLTFA). This would encompass only transactions which the service
       provider is involved in and this is therefore generally not sufficient to cover
       all relevant books, records and documentation. The transaction records must
       be kept for a period of at least ten years after the termination of the business
       relationship or the completion of a transaction (s. 79(1) PMLTFA). Failure to
       do so can result in a fine of up to EUR 120 000, depending on the seriousness
       of the offence (ss. 91-93 PMLTFA).




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      Underlying documentation (ToR A.2.2)
      116.     Companies and partnerships must keep their books of account
      and make year-end accounts in accordance with the Slovene Accounting
      Standards (SAS) or the International Financial Reporting Standards (s. 54(1)
      CA). EIGs/EEIGs and foundations must also keep their books of account in
      accordance with the SAS (s. 2 AA). Paragraph 22.13 SAS states that “entries
      in the books of account are to be made on credible and authentic bookkeeping
      documents”. The SAS define the term “bookkeeping documents” as a record
      of a transaction or business event prepared in a specific format (paragraph
      21 SAS). Slovenia confirms that this includes those documents produced
      internally (such as a delivery order) and those received externally (such
      as an invoice) and therefore imposes an obligation to maintain underlying
      documentation. Persons obliged to keep their books of account according to
      the SAS generally include entities other than listed companies, banks and
      insurance companies, who are required to keep their books of account in
      accordance with the International Financial Reporting Standards (ss. 54(10)
      and 54(11) CA). As the International Financial Reporting Standards form the
      basis for the SAS, it is expected that listed companies, banks and insurance
      companies also maintain underlying documentation.
      117.    In addition, section 54(6) CA states that companies and partner-
      ships need only store “accounting documents” for a specific period. The
      term “accounting documents” is not defined but it is distinct from “books
      of account, balance sheet, profit and loss account, annual report and busi-
      ness report”. A similar distinction is made in section 30 AA that applies to
      EIGs/EEIGs, cooperative entities and foundations. This distinction could
      be interpreted in such a way that the term “accounting documents” refers to
      underlying documentation. The Slovene authorities have confirmed that they
      do interpret “accounting documents” to mean underlying documentation.
      118.     Finally, the accounting records of entities that are subject to audit
      should contain underlying documentation in order for the auditor to be able
      to verify the records. The accounts of large and medium-sized companies and
      of companies the shares of which are traded on a regulated market must be
      audited (s. 57 CA).
      119.     The requirements in the SAS, section 54(6) CA and section 30 AA
      (together applying to companies, partnerships, EIGs/EEIGs, cooperative
      entities and foundations) appear to establish an obligation to keep underlying
      documentation. The same applies where a person carries on business as the
      trustee of a foreign trust as the obligation under tax law to keep accounting
      records for that purpose refers to the CA (s. 31 TPA). However, the require-
      ments are worded in a general way and do not go into detail regarding the
      type of underlying documentation to be kept. This could result in an uneven
      application of the obligation to keep underlying documentation. It is therefore


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       recommended that Slovenia clarifies the legal requirements to keep all under-
       lying documentation in respect of all relevant entities and arrangements.

       5-year retention standard (ToR A.2.3)
       120.     Companies, cooperative entities and partnerships must keep their
       books of account, balance sheet, profit and loss account, annual report and
       business report permanently (s. 54(6) CA). Accounting documents (which
       refers to underlying documentation, see A.2.2) may be stored for a specific
       period only. Slovenia has confirmed this sentence was added within the
       redraft of the CA to allow for the SAS to determine the time frame within
       which documents should be maintained.
       121.    Under the Accounting Act, EIGs/EEIGs, cooperative entities and
       foundations must keep their financial statements, including the balance sheet
       and the profit and loss statement, permanently (s. 30 AA). Other records and
       accounting documents (which refers to underlying documentation, see A.2.2)
       must be kept for either two, three or five years, depending on the type of
       document (s. 30 AA).
       122.     Notwithstanding the above outlined retention obligations under the
       Companies and Accounting Act, pursuant to the TPA companies, partner-
       ships, EIGs/EEIGs, cooperative entities and foundations must keep all
       accounting records (including underlying documentation) they are required
       to keep under the Companies Act and the Accounting Act respectively until
       the expiry of the absolute statute of limitations of the right to recover tax
       (s. 32(1) TPA). As the absolute statute of limitations expires ten years after
       it started to run (s. 126(5) TPA), this means that the retention period to keep
       the accounting records for tax purposes is 10 years. A person failing to keep
       accounts and records until the expiry of the statute of limitations is subject to
       a fine ranging from EUR 800 to EUR 30 000, depending on the type of entity
       involved (s. 397(1)(9) TPA). Individuals not acting by way of business, who
       might act as a trustee of a foreign trust, must also keep the information and
       documentation affecting their tax liability for at least five years (s. 41 TPA).

       Conclusions
       123.     Companies (including foreign companies) and partnerships are
       required to keep accounting records under both the Companies Act and tax
       law. EIGs/EEIGs, cooperative entities and foundations must keep accounting
       records under the Accounting Act and the tax law. Trustees of foreign trusts
       must keep accounting records for tax purposes as well, because they are subject
       to tax on the trust’s income.




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      124.      Whilst obligations exist for all entities and arrangements to keep
      underlying documentation, under the Companies Act, the Accounting Act
      and the SAS, these obligations are worded in a general way and do not go into
      detail regarding the type of underlying documentation to be kept, which may
      lead to an uneven application. It is therefore recommended that Slovenia clari-
      fies its legal requirements to keep all underlying documentation. The retention
      period under tax law, which applies to all relevant entities, is connected to the
      statute of limitations, which is set at ten years. In respect of individuals who
      act, not by way of business, as a trustee of a foreign trust, the retention period
      for records is five years.

                Determination and factors underlying recommendations

                                    Phase 1 determination
      The element is in place.
               Factors underlying
               recommendations                               Recommendations
      The requirements to keep underlying          Slovenia should clarify its
      documentation are worded in a                requirements that underlying
      general way and do not go into detail        documentation must be kept in
      regarding the type of underlying             respect of all relevant entities and
      documentation to be kept, which              arrangements.
      could result in an uneven application
      of the obligation to keep underlying
      documentation.


A.3. Banking information
       Banking information should be available for all account-holders.

      125.      Banking services may be provided in Slovenia only by banks, or
      branches of foreign banks, which obtained authorisation from the Bank of
      Slovenia (or in the case of a branch of a bank of another EU member state,
      authorisation by the relevant competent authority of that other EU member
      state) to do so (s. 33 Banking Act). As at 1 January 2012, there were 20 banks,
      3 savings banks and 3 branches of foreign banks active in Slovenia.
      126.    It is specifically provided that banks or other organisations may not
      open, issue or keep anonymous accounts, passbooks or bearer passbooks,
      or other products enabling the concealment of the customer’s identity (s. 35
      PMLTFA).




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       Record-keeping requirements (ToR A.3.1)
       127.    Banks may only be organised as a public limited company or SE and
       as such they are subject to the requirements of the CA on keeping accounting
       records (ss. 38 and 39 Banking Act). As the rules in the CA are not specifi-
       cally designed for banks, more detailed rules are provided for in the PMLTFA
       and the Payment Services and Systems Act (PSSA).

       Prevention of Money Laundering and Terrorist Financing Act
       128.    Section 4(1) PMLTFA includes banks, branches of foreign banks
       and savings banks in the definition of “organisations”, which means that any
       person providing banking services is subject to the obligations under the
       PMLTFA. Consequently, banks are required to carry out CDD when estab-
       lishing a business relationship, such as opening a bank account (ss. 7 and 8
       PMLTFA).
       129.     The information to be maintained by banks includes the following
       (s. 83(1) PMLTFA):
            (a) in the case of a company: name, address, registered office and regis-
                tration number;
            (b) in the case of a natural person: name, address, place and date of birth
                and tax number;
            (c) purpose and intended nature of the business relationship, including
                information about the activity of the customer; and
            (d) in the case of a transaction: date and time, amount, currency, purpose
                and the name and address or registered office of the person to whom
                the transaction is directed.
       130.     Banks must keep the information obtained while conducting CDD for
       a period of at least ten years after the termination of the business relationship
       or the completion of a transaction (s. 79(1) PMLTFA). Failure to carry out
       CDD or to maintain the documentation for at least ten years can lead to a fine
       of up to EUR 120 000, depending on the seriousness of the offence (ss. 91-93
       PMLTFA).

       Payment Services and Systems Act
       131.     According to section 143 PSSA, AJPES (the Agency of the Republic
       of Slovenia for Public Legal Records and Related Services) shall keep a
       register of transaction accounts and transaction account holders. A transac-
       tion account is defined as “a payment account that is opened by a bank […]
       on behalf of one or several users for the purposes of executing payment



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      transactions and for other purposes in connection with the provision of
      banking services for the user” (s. 13 PSSA). Banks must, among some other
      information, provide the following information to AJPES on transaction
      accounts (s. 144 PSSA):
          (a) name, surname and address of the holder who is a natural person, or
              firm, head office and address of the transaction account holder who
              is a legal person, or firm, head office, address, name and surname
              of the transaction account holder who is a sole proprietor or private
              citizen, or name and address of another transaction account holder;
          (b) tax number of the holder, if the holder is entered in the tax register in
              accordance with the Act regulating the tax register;
          (c) identification number of the holder or country of residence of the
              holder, if the holder is not entered in the tax register in accordance
              with the Act regulating the tax register;
          (d) registration number of the holder who is a legal person, sole proprie-
              tor or private citizen, if the holder is entered in the Business Register
              of Slovenia;
          (e) account number; and
          (f) opening and, if applicable, closing date of the account.
      132.     The register of transaction accounts is publicly available, although
      not all information is accessible to the public because of rules regarding pri-
      vacy (s. 146 PSSA). Information on specific transactions is not available in
      the register, but this information must be kept by banks under the PMLTFA
      as described above.

      Conclusion
      133.    The customer identification obligations and record keeping obligations
      on transactions require banking information to be available in Slovenia for all
      account holders. In addition, certain information on transaction accounts is
      available through a public register.

               Determination and factors underlying recommendations

                                   Phase 1 determination
      The element is in place.




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B. Access to Information



Overview

       134.     A variety of information may be needed in respect of the administra-
       tion and enforcement of relevant tax laws and jurisdictions should have the
       authority to access all such information. This includes information held by
       banks and other financial institutions as well as information concerning the
       ownership of companies or the identity of interest holders in other persons or
       entities. This section of the report examines whether Slovenia’s legal and reg-
       ulatory framework gives to its competent authority access powers that cover
       all relevant persons and information, and whether the rights and safeguards
       that are in place would be compatible with effective exchange of information.
       135.     The access powers available to the Slovene tax authorities are derived
       mainly from two separate provisions. Information can be obtained from legal
       entities and individuals carrying on business either automatically, upon writ-
       ten request or through a visit of a tax officer to the business premises. When
       information must be obtained from individuals who do not carry on business,
       the tax authorities can do so by request.
       136.    There are two main provisions in the TPA that provide for access
       to information. One of these provisions provides that information can be
       obtained from companies (including banks), partnerships, foundations, self-
       employed individuals and other government authorities. The other provision
       provides for information gathering powers in respect of individuals not
       performing self-employed activities. Together, these provide sufficient infor-
       mation gathering powers in respect of all individuals and entities in Slovenia.
       137.    Monetary penalties can be imposed on any person failing to comply
       with a request to provide information to the Slovene tax authorities. The
       amount of the penalty varies depending on the type of entity or individual com-
       mitting the offence.
       138.    Slovenia’s legal framework recognises both bank secrecy and profes-
       sional privilege. However, the obligation to provide information to the tax



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      authorities overrides the obligation to keep bank information confidential. In
      addition, the professional privilege does not impede the effective exchange of
      information. Finally, no legal rights or safeguards exist in Slovenia that would
      unduly prevent or delay effective exchange of information.

B.1. Competent Authority’s ability to obtain and provide information
 Competent authorities should have the power to obtain and provide information that is the
 subject of a request under an exchange of information arrangement from any person within
 their territorial jurisdiction who is in possession or control of such information (irrespective
 of any legal obligation on such person to maintain the secrecy of the information).

      139.     Under Slovenia’s information exchange agreements the Ministry of
      Finance or its authorised representative is the designated competent author-
      ity. Section 265 of the Tax Procedure Act (TPA) provides that the Ministry
      of Finance may authorise the Tax Administration of Slovenia to carry out the
      task of actual exchange of information. The Tax Administration of Slovenia
      has been so authorised under the Rules implementing the TPA (section 86).

      Ownership and identity information (ToR B.1.1)
      140.     The powers to obtain information for tax purposes are provided for in
      the TPA. Section 39(1) TPA provides that all persons that are obliged to keep
      books of account or other records pursuant to any act or regulation or are oth-
      erwise legally authorised to keep or manage such information, must provide
      the tax authorities with access to all information and enable the authorities to
      consult the documents. It is expressly stated that this includes all information
      kept by these persons, regardless of whether there is an obligation to keep it.
      141.    As described in section A.2 of this report, companies, partnerships,
      EIGs/EEIGs and foundations are required to keep accounting records under
      the Companies Act and the Accounting Act respectively. In addition, indi-
      viduals carrying on business (including acting by way of business as a trustee
      of a foreign trust) must keep records under section 31(2) TPA. All of these
      persons are therefore covered by the obligation to provide the tax authorites
      with information under section 39(1) TPA.
      142.    Other (government) authorities maintaining registers with relevant
      information must also provide such information to the tax authorities on
      request (s. 39(1) TPA). It is noted that most of the Slovene government data-
      bases are linked and automatic access is already granted to the tax authorities.
      143.    Section 39(3) TPA specifies that information from the persons cov-
      ered by section 39(1) TPA may be obtained either (i) automatically, (ii) upon
      written request or (iii) on-the-spot. The automatic provision of information


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       to the tax authorities primarily takes place by other government authorities,
       but also by banks (see below). In other cases information is obtained either by
       sending a written request to the person or by a tax officer visiting the busi-
       ness premises of the taxpayer (see also B.1.4).
       144.     The obligation to provide information that applies to the persons
       covered by section 39(1) TPA is extended to information in the possession
       of affiliated persons 11 which are neither founded in Slovenia nor tax resident
       in Slovenia (s. 40 TPA). Such extension provides the Slovene tax authorities
       with additional access powers that go beyond the requirements of the ToR,
       as these persons would ordinarily not fall within a jurisdiction’s territorial
       jurisdiction.
       145.     Individuals not performing self-employed activities must, at the
       request of the tax authority, provide all information and documents at their
       disposal affecting their own tax liability or the tax liability of other persons
       (s. 41 TPA).

       Bank information
       146.    Banks must have the legal form of a public limited company and
       they are therefore required to provide information to the tax authorities under
       section 39(1) TPA. As “payment service providers” banks are also required
       to provide on an automatic basis data on transaction accounts of persons and
       inflows on those accounts as is necessary for tax collection (s. 37(2) TPA). As
       described in section A.3 of this report, most of this information (but not on
       inflows) must also be provided to AJPES for registration.

       Conclusion
       147.    The access powers available to the tax authorities provide them with
       the possibility to request information from all companies, partnerships and
       foundations on the basis of section 39(1) TPA. This section also provides
       the powers to obtain information from self-employed individuals and other
       government authorities. In addition, information which is in the possession
       of foreign affiliated persons may be obtained from the persons covered by
       section 39(1) TPA. Finally, section 41 TPA provides the power to obtain infor-
       mation from individuals who are not self-employed. It can be expected that
       most information will be obtained under section 39(1), as information that is


11.    As a general rule, a person is affiliated with another person if one person holds
       an ownership interest of at least 25% in the other person or if the same person
       holds an ownership interest of at least 25% in two different persons (s. 16
       Personal Income Tax Act and s. 16 Corporate Income Tax Act).


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      the subject of an information exchange request will mostly be in the hands of
      persons other than individuals not performing self-employed activities.

      Accounting records (ToR B.1.2)
      148.    The powers described under the previous subsection (Ownership
      and identity information) apply equally where accounting information must
      be obtained. It is noted that detailed rules apply for the manner in which
      accounting records that are kept in electronic form are provided, in order to
      ensure that reliable information is obtained. This includes providing the tax
      authorities with access to the software and hardware (ss. 32(2) and 38 TPA).

      Use of information gathering measures absent domestic tax interest
      (ToR B.1.3)
      149.     As explained under B.1.1 above, Slovenia’s information gathering
      powers are mainly derived from two provisions. First, information can be
      obtained from companies (including banks), partnerships, foundations,
      self-employed individuals and other government authorities on the basis of
      section 39(1) TPA. With respect to these powers, it is clearly stated that they
      can also be applied by the tax authorities pursuant to a valid international
      agreement binding on Slovenia (s. 39(2) TPA). Therefore, no domestic tax
      interest exists in respect of these powers.
      150.    When information must be obtained from individuals not performing
      self-employed activities, the access powers of section 41 TPA apply. There is
      no provision similar to section 39(2) TPA covering section 41 TPA. However,
      section 8 of the Constitution states the following:
              “Laws and regulations must comply with generally accepted
              principles of international law and with treaties that are bind-
              ing on Slovenia. Ratified and published treaties shall be applied
              directly.”.
      151.     The Slovene tax authorities indicate that this means that because
      Slovenia’s information exchange agreements oblige them to exchange
      information that is foreseeably relevant to the enforcement of the domestic
      tax laws of the treaty partner, such information can be obtained as if it was
      information regarding a Slovene tax obligation, hence Slovenia can use all
      of its access powers for exchange purposes. As the language in section 8
      of the Constitution is quite strong (laws must comply with binding treaties
      and treaties shall be applied directly), there is a basis for concluding that
      Slovenia can indeed use all of its access powers, including the powers under
      section 41 TPA, for information exchange purposes. However, ambiguity
      remains between the powers existing under section 39 TPA, where an explicit



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       provision in the law clarifies that no domestic tax interest exists, and sec-
       tion 41 TPA, which lacks such explicit provision. It is noted that almost all
       ownership and accounting information and all bank information is available
       either with the authorities or with persons covered by section 39(1) TPA.
       Cases where information may need to be obtained from individuals not
       performing self-employed activities, seem to be limited to where such indi-
       vidual acts not by way of business as a nominee or trustee. It is nevertheless
       recommended that Slovenia removes the ambiguity described and clarifies
       that it can use all of its access powers for information exchange purposes. A
       practical assessment of the matter will take place in the Phase 2 peer review
       of Slovenia.
       152.     It is noted that the power to request information which is in the pos-
       session of affiliated persons, i.e. section 40 TPA, from the persons covered
       by section 39(1) TPA also does not contain a provision specifically referring
       to the possibility to use this power under international agreements. The same
       analysis as described in the two preceding paragraphs therefore applies. It is
       noted, however, that this power goes beyond the requirements of the ToR, as
       these persons would ordinarily not fall within a jurisdiction’s territorial juris-
       diction. It is nevertheless recommended that Slovenia addresses the issue of
       ambiguity in relation to the power included in section 40 TPA as well.

       Compulsory powers (ToR B.1.4)
       153.   Jurisdictions should have in place effective enforcement provisions to
       compel the production of information.
       154.     Any person covered by sections 39 and/or 40 TPA failing to make
       available to the tax authority the information contained in its records, data-
       bases, registers or other records it keeps or denies the tax authority access to
       its documents is subject to a fine within the range of the following amounts
       (s. 397(1)(17) TPA):
                In the case of a sole proprietor or self-employed individual: between
                EUR 800 and EUR 10 000.
                In the case of a legal person other than a large or medium sized com-
                pany: between EUR 1 200 and EUR 15 000.
                In the case of a company which is regarded as a large or medium
                sized company according to the Companies Act: between EUR 3 200
                and EUR 30 000.
       155.     In addition, separate fines may be imposed on the individuals respon-
       sible for committing the offence (for example the director of a company). The
       amount of the fine can range between EUR 400 and EUR 4 000 (ss. 397(2)
       and 397(3) TPA).


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      156.     Individuals other than sole proprietors or self-employed persons
      who fail to provide information or documents at the request of the Slovene
      tax authorities are subject to a fine ranging from EUR 400 to EUR 2 000
      (s. 395(3) TPA).
      157.     One of the procedures for the Slovene tax authorities to obtain infor-
      mation for exchange purposes is “on-the-spot” (s. 39(3) TPA). In doing so,
      tax inspectors may enter and inspect business premises and inspect and copy
      books of account, records, contracts and business documents (s. 18 TAA).
      They are also entitled to seize any relevant documents for a maximum of 30
      days (s. 19(1) TAA).

      Secrecy provisions (ToR B.1.5)

      Bank secrecy
      158.     Bank secrecy is established in section 214 of the Banking Act which
      states that “the bank shall treat as confidential and protect all information,
      facts and circumstances about individual clients notwithstanding the manner
      in which this information has been obtained”. In addition, it is specifically
      provided that all persons who have access to such confidential information
      may not disclose this information to third parties (s. 215 Banking Act).
      159.     However, the obligation to protect confidential information does not
      apply under certain circumstances. One of such circumstances mentioned is
      when this is “stipulated by the law” (s. 215(2)(5) Banking Act). The reference
      to “the law” does not refer to the Banking Act itself, as in those cases refer-
      ence is made to “this Act”. The obligation to provide the tax authorities with
      information under section 39 TPA (as described under B.1.1) acts as such
      exception, as it obliges banks to provide information without any reservation,
      while the Banking Act does contain a reservation. It is also noted that some
      bank information must be provided on an automatic basis to the tax authori-
      ties on the basis of section 37 TPA (see also B.1.1).

      Professional privilege (attorney-client privilege)
      160.     Under section 6 of the Lawyers Act (LA), a lawyer must protect what
      his client has confided in him as a secret. A violation of the duty to protect
      a professional secret is defined as a severe violation of a lawyer’s duty in
      practicing the legal profession (section 77(b)(1) of the Statutes of the Bar
      Association of Slovenia).
      161.     Two limitations to professional privilege apply according to the
      definition. First, it pertains only to information confided in him as a secret
      (confidential information), which would exclude information that cannot


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       reasonably be expected to be kept secret, such as information provided by the
       client to its attorney in the presence of third parties, from being privileged
       (see, for example, Article 7(3) of the Model TIEA and its Commentary).
       162.    The second limitation is that information is only covered by the
       professional privilege where it has come to the knowledge of the attorney
       from his client. Professional privilege does therefore not apply to any piece
       of information given to an attorney outside the context of an attorney-client
       relationship.
       163.     In a decision regarding the obligations of Slovene attorneys to act as
       a representative of the Bar Association during the execution of a search war-
       rant at the premises of another attorney, the Constitutional Court refers in a
       footnote to the professional privilege as follows 12:
                “Privilege refers to confidential communication between clients
                and their legal advisers when such is intended for obtaining or
                providing legal advice or for its application in proceedings which
                have already been or are to be initiated.”.
       164.     Although the professional privilege was not the subject of the ruling
       by the Constitutional Court, the Slovene authorities confirmed that the fact
       that the definition as quoted above was referred to in the decision by the high-
       est body of judicial power in Slovenia means that it will have a significant
       impact on the decisions of lower courts as well. Based on its definition and
       the interpretation by the Constitutional Court, it can therefore be concluded
       that the scope of professional privilege in Slovenia is not overly broad and
       therefore in accordance with the standard.

                  Determination and factors underlying recommendations

                                       Phase 1 determination
       The element is in place.


B.2. Notification requirements and rights and safeguards
 The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the
 requested jurisdiction should be compatible with effective exchange of information.

       165.    Rights and safeguards should not unduly prevent or delay effec-
       tive exchange of information. For instance, notification rules should permit


12.    Constitutional Court of Slovenia, 15 April 2010, case reference Up-2530/06-26,
       footnote 4.


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      exceptions from prior notification (e.g. in cases in which the information
      request is of a very urgent nature or the notification is likely to undermine
      the chance of success of the investigation conducted by the requesting
      jurisdiction).

      Not unduly prevent or delay exchange of information (ToR B.2.1)
      166.    There is no requirement in Slovenia’s domestic legislation that the
      taxpayer under investigation or examination must be notified of a request.
      In addition, no other legal rights or safeguards, such as a right to appeal the
      exchange of information, exist that would unduly prevent or delay effective
      exchange of information.

               Determination and factors underlying recommendations

                                   Phase 1 determination
      The element is in place.




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                                   COMPLIANCE WITH THE STANDARDS: EXCHANGING INFORMATION – 51




C. Exchanging Information



Overview

       167.    Jurisdictions generally cannot exchange information for tax pur-
       poses unless they have a legal basis or mechanism for doing so. In Slovenia,
       the legal authority to exchange information derives from its information
       exchange agreements, as soon as such mechanism is ratified and published
       in the Official Gazette. This section of the report examines whether Slovenia
       has a network of information exchange agreements that would allow it to
       achieve effective exchange of information in practice.
       168.     Slovenia has a network of information exchange mechanisms that
       covers 69 jurisdictions, including all relevant partners. Information can
       be exchanged under DTCs, TIEAs, the OECD/CoE Convention on Mutual
       Administrative Assistance in Tax Matters and EU instruments. Its DTCs and
       TIEAs generally contain sufficient provisions to enable Slovenia to exchange
       all relevant information, as does the OECD/CoE Convention on Mutual
       Administrative Assistance in Tax Matters.
       169.     The confidentiality of information exchanged with Slovenia is pro-
       tected by obligations implemented in the information exchange agreements,
       complemented by domestic legislation which provides that tax officials
       must keep information confidential. A monetary penalty can be imposed for
       breaching confidentiality in most instances. However, no enforcement meas-
       ures are in place where confidentiality is breached of information that does
       not relate to a Slovene tax liability under an information exchange agreement
       other than a DTC.
       170.    Slovenia’s information exchange agreements ensure that the contract-
       ing parties are not obliged to provide information which would disclose any
       trade, business, industrial, commercial or professional secret or trade process,
       or information the disclosure of which would be contrary to public policy.




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C.1. Exchange of information mechanisms
 Exchange of information mechanisms should allow for effective exchange of information.

      171.   Slovenia is party to a variety of bilateral and multilateral exchange of
      information mechanisms. Bilaterally, Slovenia has concluded 54 DTCs and 2
      TIEAs (see Annex 2). This section of the report explores whether these agree-
      ments allow Slovenia to effectively exchange information.
      172.     In addition to its bilateral agreements, on 27 May 2010 Slovenia
      signed the OECD/CoE Convention on Mutual Administrative Assistance in
      Tax Matters, under which information can be exchanged according to the
      international standard with 13 jurisdictions 13 with which Slovenia does not
      have a bilateral agreement, provided that the domestic laws of the relevant
      jurisdictions do not impose any restrictions. This Convention was ratified by
      Slovenia in January 2011 and entered into force for Slovenia on 1 June 2011.
      173.   As an EU member state, Slovenia also exchanges tax information
      under various other multilateral mechanisms, including:
               Council Directive 2011/16/EU of 15 February 2011 on administra-
               tive cooperation in the field of taxation, replacing Council Directive
               77/799/EEC concerning mutual assistance by the competent authori-
               ties of the Member States of the EU in the field of direct taxation and
               taxation of insurance premiums.
               Council Directive 2003/48/EC of 3 June 2003 on taxation of sav-
               ings income in the form of interest payments. This Directive aims
               to ensure that savings income in the form of interest payments gen-
               erated in an EU member state in favour of individuals or residual
               entities being resident of another EU member state are effectively
               taxed in accordance with the fiscal laws of their state of residence. It
               also aims to ensure exchange of information between member states.
               Council Regulation (EU) 904/2010 of 7 October 2010 on administra-
               tive cooperation and combating fraud in the field of value added tax.
      174.   When more than one legal instrument may serve as the basis for
      exchange of information – for example where there is a bilateral agreement
      with an EU member state which also applies Council Directive 2011/16/
      EU – the problem of overlap is generally addressed within the instruments


13.   These jurisdictions are: Argentina, Australia, Brazil, Colombia, Costa Rica, Georgia,
      Ghana, Iceland Indonesia, Japan, Mexico, South Africa and Tunisia. Whilst the con-
      vention is already in force in Slovenia, Georgia and Iceland, the convention is yet to
      come into force in the other jurisdictions.


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       themselves. There are no domestic rules in Slovenia requiring it to choose
       between mechanisms where it has more than one agreement involving a par-
       ticular partner and thus the competent authority is free for any exchange to
       invoke all of the available mechanisms or to choose the most appropriate one.

       Foreseeably relevant standard (ToR C.1.1)
       175.     The international standard for exchange of information envisages
       information exchange to the widest possible extent. Nevertheless it does not
       allow “fishing expeditions”, i.e. speculative requests for information that have
       no apparent nexus to an open inquiry or investigation. The balance between
       these two competing considerations is captured in the standard of “foresee-
       able relevance” which is included in Article 26(1) of the OECD Model Tax
       Convention, set out below:
                “The competent authorities of the Contracting States shall
                exchange such information as is foreseeably relevant for carrying
                out the provisions of this Convention or to the administration or
                enforcement of the domestic laws concerning taxes of every kind
                and description imposed on behalf of the Contracting States,
                or of their political subdivisions or local authorities, insofar as
                the taxation thereunder is not contrary to the Convention. The
                exchange of information is not restricted by Articles 1 and 2.”.
       176.     Eleven of Slovenia’s DTCs (with Armenia, Austria, Azerbaijan,
       Belarus, Cyprus 14, 15, Germany, Iceland, Kuwait, Norway, Singapore and the
       United Kingdom) and its TIEAs with Guernsey and the Isle of Man use this or
       similar language and therefore clearly meet the “foreseeably relevant” standard.
       177.     It is noted that the DTC with Cyprus includes a provision requiring the
       requesting state to demonstrate the foreseeable relevance of a request by provid-
       ing certain specified information. The provision in question mirrors Article 5(5)
       of the OECD Model TIEA and, therefore, the requirement is consistent with the
       international standard. Similar provisions are included in Slovenia’s TIEAs.

14.    Note by Turkey: The information in this document with reference to “Cyprus”
       relates to the southern part of the Island. There is no single authority represent-
       ing both Turkish and Greek Cypriot people on the Island. Turkey recognises the
       Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable
       solution is found within the context of the United Nations, Turkey shall preserve
       its position concerning the “Cyprus issue”.
15.    Note by all the European Union Member States of the OECD and the European
       Commission: The Republic of Cyprus is recognised by all members of the United
       Nations with the exception of Turkey. The information in this document relates to
       the area under the effective control of the Government of the Republic of Cyprus.


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     178.     The DTC with Switzerland provides only for the exchange of infor-
     mation as is necessary for carrying out the provisions of the Convention. As
     it does not provide for the exchange of information for the administration of
     domestic tax laws, this DTC does not meet the “foreseeably relevant” stand-
     ard. It is recommended that Slovenia update its DTC with Switzerland to
     remove this limitation.
     179.     The other DTCs concluded by Slovenia provide for the exchange of
     information that is “necessary” or “relevant” for carrying out the provisions
     of the Convention or of the domestic laws of the Contracting States, or contain
     language which has a similar meaning. The Commentary to Article 26(1)
     of the OECD Model Tax Convention refers to the standard of “foreseeable
     relevance” and states that the Contracting States may agree to an alternative
     formulation of this standard that is consistent with the scope of the Article,
     for instance by replacing “foreseeably relevant” with “necessary”. Slovenia’s
     authorities state that they interpret these alternative formulations as equivalent
     to the term “foreseeably relevant”. Therefore, all of Slovenia’s information
     exchange agreements but for the one with Switzerland meet the “foreseeably
     relevant” standard.

     In respect of all persons (ToR C.1.2)
     180.    For EOI to be effective it is necessary that a jurisdiction’s obligations
     to provide information are not restricted by the residence or nationality of
     the person to whom the information relates or by the residence or nationality
     of the person in possession or control of the information requested. For this
     reason the international standard for EOI envisages that EOI mechanisms will
     provide for exchange of information in respect of all persons.
     181.     The DTCs applicable to Russia, Sweden and Switzerland do not
     specifically include a provision which extends the scope of the exchange of
     information Article to persons other than residents of one of the Contracting
     States. However, the DTCs with Russia and Sweden provide for the exchange
     of information as is necessary for carrying out the provisions of the domestic
     laws of the Contracting States. Slovenia has confirmed that to the extent that
     the domestic (tax) laws are applicable to non-residents as well as to residents,
     it can exchange information under these agreements in respect of all persons.
     However, this is not the case for Russia, which limits the effective exchange
     of information under this DTC. In respect of the DTC with Switzerland it is
     also not possible to exchange information in respect of all persons, since it
     only provides for exchange of information for the purposes of carrying out
     the Convention.
     182.    All other information exchange agreements do specifically provide
     for exchange of information in respect of all persons.



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       Obligation to exchange all types of information (ToR C.1.3)
       183.     Jurisdictions cannot engage in effective exchange of information if
       they cannot exchange information held by financial institutions, nominees
       or persons acting in an agency or a fiduciary capacity, as well as owner-
       ship information. Both the OECD Model Convention (Article 26(5)) and
       the OECD Model TIEA (Article 5(4)), which are the primary authoritative
       sources of the standards, stipulate that bank secrecy cannot form the basis for
       declining a request to provide information and that a request for information
       cannot be declined solely because the information is held by nominees or
       persons acting in an agency or fiduciary capacity or because the information
       relates to an ownership interest.
       184.     The DTCs concluded by Slovenia before the update of the OECD
       Model Tax Convention in 2005 do generally not contain a provision cor-
       responding to Article 26(5), which was introduced at that update. Only the
       DTCs with Armenia, Austria, Azerbaijan, Belarus, Cyprus, Germany, Iceland,
       Norway, Qatar, Singapore and the United Kingdom, as well as the TIEAs
       with Guernsey and the Isle of Man contain such a provision. However, the
       absence of this provision does not automatically create restrictions on the
       exchange of information held by banks, other financial institutions, nominees,
       agents and fiduciaries, as well as ownership information. The Commentary
       to Article 26(5) indicates that while paragraph 5 represents a change in the
       structure of the Article, it should not be interpreted as suggesting that the
       previous version of the Article did not authorise the exchange of such informa-
       tion. Slovenia’s domestic laws allow it to access and exchange the information
       covered by Article 26(5) even in the absence of such provision in the DTC.
       185.    At least two of Slovenia’s treaty partners (Luxembourg and Switzerland)
       currently have restrictions in accessing bank information in the absence of a
       provision corresponding to Article 26(5) of the OECD Model Tax Convention,
       which limits the effective exchange of information under this DTC. Such restric-
       tion may also exist in other jurisdictions with which Slovenia has concluded a
       DTC. It is recommended that Slovenia update its DTCs with relevant partners to
       remove this limitation.

       Absence of domestic tax interest (ToR C.1.4)
       186.      The concept of “domestic tax interest” describes a situation where a
       contracting party can only provide information to another contracting party
       if it has an interest in the requested information for its own tax purposes. A
       refusal to provide information based on a domestic tax interest requirement
       is not consistent with the international standard. Jurisdictions must be able
       to use their information gathering measures even though invoked solely to
       obtain and provide information to the requesting jurisdiction.



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     187.     The DTCs concluded by Slovenia before the update of the OECD
     Model Tax Convention in 2005 do generally not contain a provision cor-
     responding to Article 26(4), which was introduced at that update and which
     stipulates that a domestic tax interest may not be a reason to decline an infor-
     mation request. Only the DTCs with Armenia, Austria, Azerbaijan, Belarus,
     Cyprus, Germany, Iceland, Norway, Qatar, Singapore, the United Kingdom
     and the United States, as well as the TIEAs with Guernsey and the Isle of
     Man contain such a provision. However, the absence of this provision does
     not automatically create restrictions on the exchange of information. The
     Commentary to Article 26(4) indicates that paragraph 4 was introduced to
     express an implicit obligation to exchange information also in situations where
     the requested information is not needed by the requested State for domestic tax
     purposes. No domestic tax interest restrictions exist in Slovenia’s laws even
     in the absence of a provision corresponding with Article 26(4) of the OECD
     Model Tax Convention.
     188.      A domestic tax interest requirement may however exist for some of
     Slovenia’s treaty partners. It is recommended that Slovenia monitor effective
     exchange of information with such treaty partners and, if necessary, renegoti-
     ate its information exchange agreements to incorporate wording in line with
     Article 26(4) of the OECD Model Tax Convention.

     Absence of dual criminality principles (ToR C.1.5)
     189.     The principle of dual criminality provides that assistance can only be
     provided if the conduct being investigated (and giving rise to the information
     request) would constitute a crime under the laws of the requested country if
     it had occurred in the requested country. In order to be effective, exchange of
     information should not be constrained by the application of the dual criminal-
     ity principle.
     190.     None of the information exchange agreements concluded by Slovenia
     applies the dual criminality principle to restrict the exchange of information.

     Exchange of information in both civil and criminal tax matters
     (ToR C.1.6)
     191.    Information exchange may be requested both for tax administration
     purposes and for tax prosecution purposes. The international standard is not
     limited to information exchange in criminal tax matters but extends to infor-
     mation requested for tax administration purposes (also referred to as “civil
     tax matters”).
     192.    All of the information exchange agreements concluded by Slovenia
     cover both civil and criminal tax matters.



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       Provide information in specific form requested (ToR C.1.7)
       193.     In some cases, a Contracting State may need to receive information
       in a particular form to satisfy its evidentiary or other legal requirements.
       Such forms may include depositions of witnesses and authenticated copies
       of original records. Contracting States should endeavour as far as possible to
       accommodate such requests. The requested State may decline to provide the
       information in the specific form requested if, for instance, the requested form
       is not known or permitted under its law or administrative practice. A refusal
       to provide the information in the form requested does not affect the obligation
       to provide the information.
       194.     No restrictions apply in any information exchange agreement
       concluded by Slovenia for information to be provided in the specific form
       requested. The DTC with the United States and the TIEAs with Guernsey
       and the Isle of Man specifically state that information shall be provided in the
       form of depositions of witnesses or authenticated copies of original records,
       to the extent possible under the domestic laws of the requested State. In addi-
       tion, the DTC with India obliges the contracting parties to exchange certified
       copies of documents if so requested.

       In force (ToR C.1.8)
       195.     Exchange of information cannot take place unless a jurisdiction has
       exchange of information arrangements in force. Where such arrangements
       have been signed, the international standard requires that jurisdictions must
       take all steps necessary to bring them into force expeditiously.
       196.     Of the 56 information exchange agreements concluded by Slovenia,
       ten are not in force (with Armenia, Austria (protocol), Azerbaijan, Egypt,
       Germany (protocol), Guernsey, Iceland, Iran, Isle of Man and Kuwait).
       Slovenia has completed all internal procedures and notified its treaty partners
       of the completion of the ratification procedure in respect of the agreements
       with Armenia, Egypt, Germany and Kuwait. The agreements with Austria,
       Guernsey, and the Isle of Man have recently been approved by the National
       Assembly and notifications will be sent to the respective treaty partners
       shortly. The other three agreements still need to be approved by the Slovene
       National Assembly. The ratification procedure usually takes less than one
       year and the two of the three agreements not yet ratified by Slovenia were
       signed less than a year ago (the DTC with Iceland was signed on 4 May 2011).
       It is noted that Iceland and Slovenia can exchange information under the
       OECD/CoE Convention on Mutual Administrative Assistance in Tax Matters.




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     Be given effect through domestic law (ToR C.1.9)
     197.    For information exchange to be effective, the parties to an exchange
     of information arrangement need to enact any legislation necessary to comply
     with the terms of the arrangement.
     198.     International agreements are published in the Official Gazette once
     ratified by the Slovene National Assembly. Section 8 of the Constitution
     states that “[r]atified and published treaties shall be applied directly”, mean-
     ing that publication of a DTC or TIEA in the Official Gazette gives direct
     effect to those agreements and sufficiently implements them in Slovenia’s
     domestic law. In addition, Slovenia’s legal and regulatory framework ensures
     that the authorities can access and provide information under its information
     exchange agreements.

               Determination and factors underlying recommendations

                                   Phase 1 determination
      The element is in place.


C.2. Exchange of information mechanisms with all relevant partners
       The jurisdictions’ network of information exchange mechanisms should cover
       all relevant partners.

     199.      Ultimately, the international standard requires that jurisdictions
     exchange information with all relevant partners, meaning those partners who are
     interested in entering into an information exchange arrangement. Agreements
     cannot be concluded only with counterparties without economic significance. If
     it appears that a jurisdiction is refusing to enter into agreements or negotiations
     with partners, in particular ones that have a reasonable expectation of requiring
     information from that jurisdiction in order to properly administer and enforce
     its tax laws it may indicate a lack of commitment to implement the standards.
     200. Slovenia has exchange of information relationships with 69 jurisdic-
     tions, of which 54 are through a DTC and 2 through a TIEA. The OECD/CoE
     Convention on Mutual Administrative Assistance in Tax Matters covers 37
     jurisdictions, 13 of which Slovenia does not have a bilateral agreement with.
     The exchange of information relationships cover jurisdictions representing:
             all of its main trading partners (Germany, Austria, Italy, France and
             Croatia);
             all of the G20 member jurisdictions except Saudi Arabia; and
             53 of the Global Forum member jurisdictions.



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       201.    Comments were sought from the jurisdictions participating in the
       Global Forum in the course of the preparation of this report, and no jurisdic-
       tion advised the assessment team that Slovenia had refused to negotiate or
       conclude an information exchange agreement with it. In summary, Slovenia’s
       network of information exchange agreements covers all relevant partners.

                  Determination and factors underlying recommendations

                                       Phase 1 determination
       The element is in place.
                  Factors underlying
                  recommendations                               Recommendations
                                                      Slovenia should continue to develop its
                                                      EOI network with all relevant partners.


C.3. Confidentiality
        The jurisdictions’ mechanisms for exchange of information should have adequate
        provisions to ensure the confidentiality of information received.

       Information received: disclosure, use, and safeguards (ToR C.3.1)
       202. Governments would not engage in information exchange without the
       assurance that the information provided would only be used for the purposes
       permitted under the exchange mechanism and that its confidentiality would
       be preserved. Information exchange instruments must therefore contain
       confidentiality provisions that spell out specifically to whom the information
       can be disclosed and the purposes for which the information can be used.
       In addition to the protections afforded by the confidentiality provisions of
       information exchange instruments, jurisdictions with tax systems generally
       impose strict confidentiality requirements on information collected for tax
       purposes.
       203.    All of the agreements for the exchange of information concluded
       by Slovenia contain a provision ensuring the confidentiality of information
       exchanged and limiting the disclosure and use of information received, which
       has to be respected by Slovenia as a party to these agreements. In fact, the
       confidentiality provisions of Slovenia’s information exchange agreements can
       be applied directly according to section 8 of the Constitution.
       204. Slovenia’s domestic law also provides that tax officials and other
       persons who, due to the nature of their work, come into contact with confi-
       dential tax information shall not disclose this information to third persons
       or use it themselves or allow third persons to use it (s. 16 TPA). Confidential



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     tax information is defined as information received from persons liable to
     tax during the tax procedure as well as other information concerning the tax
     liability of persons liable to tax (s. 15 TPA). Any information received by
     Slovenia under an information exchange request must therefore be treated
     as confidential, as information may only be requested for the administration
     and enforcement of Slovenia’s domestic tax laws. Any individual disclosing
     information in contravention with section 16 TPA is subject to a fine ranging
     from EUR 400 to EUR 2 000 (s. 395(2) TPA).

     All other information exchanged (ToR C.3.2)
     205.    Confidentiality rules should apply to all types of information exchanged,
     including information provided in a request, background documents to
     such requests, and any other documents or communications reflecting such
     information.
     206. The definition of the term “confidential tax information” seems to
     include a domestic tax interest and does not necessarily extend to information
     transmitted in response to a request, as such information may not be informa-
     tion concerning the tax liability of a person liable to tax, which presumably
     refers to Slovene tax liability. However, as explained above, the confidential-
     ity provisions of Slovenia’s information exchange agreements, which cover
     any information exchanged, can be applied directly according to section 8
     of the Constitution. This provision also provides that laws must comply with
     treaties that are binding on Slovenia, which means that information relating
     to the tax liability of a person in a foreign jurisdiction must be kept confiden-
     tial as if it was information regarding a Slovene tax liability (see also section
     B.1.3 of this report). The question arises whether the domestic enforcement
     measures under section 16 TPA are available with respect to the broader con-
     fidentiality duty under an information exchange agreement. In this regard,
     section 2(1) TPA states:
             “The tax authority shall proceed pursuant to this Act when decid-
             ing on the obligations and rights of individuals, legal persons
             and other parties […] in implementing the international treaty
             on the avoidance of double taxation binding upon the Republic
             of Slovenia.”
     207.     This provision combined with section 8 of the Constitution mean
     that the Slovene authorities can use the enforcement procedures provided for
     a breach of confidentiality in section 16 TPA also for a breach of confiden-
     tiality under a DTC. It should be noted that TIEAs and other international
     treaties are not mentioned in section 2(1) TPA, and therefore no penalty
     would apply for breach of confidentiality related to information other than
     information related to Slovene tax liability under the two TIEAs concluded



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       by Slovenia and the 13 jurisdictions covered by the OECD/CoE Convention
       on Mutual Administrative Assistance in Tax Matters with which Slovenia
       does not have a DTC (see also C.1). It is therefore recommended that Slovenia
       ensures that it can use enforcement measures for breach of confidentiality in
       all cases.
       208.     Finally, it is noted that a specific provision is in force to lift the obliga-
       tion to keep information confidential where it must be disclosed to the competent
       authorities of another jurisdiction under (i) an EU instrument (ii) an international
       treaty on the avoidance of double taxation, or (iii) any other international treaty
       such as a TIEA (s. 27 TPA).

                  Determination and factors underlying recommendations

                                       Phase 1 determination
       The element is in place.
                  Factors underlying
                  recommendations                               Recommendations
       No enforcement measures are                    Slovenia should ensure that
       in place where confidentiality is              appropriate enforcement measures
       breached of information that does not          are in place in all cases where
       relate to a Slovene tax liability under        confidentiality is breached of
       an information exchange agreement              information which may be exchanged
       other than a DTC.                              pursuant to an information exchange
                                                      agreement that is protected by a duty
                                                      of confidentiality.


C.4. Rights and safeguards of taxpayers and third parties
        The exchange of information mechanisms should respect the rights and
        safeguards of taxpayers and third parties.

       Exceptions to requirement to provide information (ToR C.4.1)
       209.   The international standard allows requested parties not to supply
       information in response to a request in certain identified situations.
       210.    In line with the standard, under all of Slovenia’s information
       exchange agreements the contracting parties are not obliged to provide infor-
       mation which would disclose any trade, business, industrial, commercial or
       professional secret or trade process, or information the disclosure of which
       would be contrary to public policy. In addition to professional secrecy, the
       TIEAs with Guernsey and the Isle of Man specifically refer to legal privi-
       lege. These terms are not defined in the respective agreements, meaning that



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     domestic law definitions apply. No issues were found in Slovenia’s domestic
     legal and regulatory framework in respect of secrecy provisions (see section
     B.1.5 of this report).

               Determination and factors underlying recommendations

                                   Phase 1 determination
      The element is in place.


C.5. Timeliness of responses to requests for information
       The jurisdiction should provide information under its network of agreements
       in a timely manner.

     Responses within 90 days (ToR C.5.1)
     211.    In order for exchange of information to be effective it needs to
     be provided in a timeframe which allows the tax authorities to apply the
     information to the relevant cases. If a response is provided but only after
     a significant lapse of time the information may no longer be of use to the
     requesting authorities. This is particularly important in the context of inter-
     national cooperation as cases in this area must be of sufficient importance to
     warrant making a request.
     212.    There are no specific legal or regulatory requirements in place which
     would prevent Slovenia from responding to a request for information by pro-
     viding the information requested or providing a status update within 90 days
     of receipt of the request.
     213.    As regards the timeliness of responses to requests for information,
     the assessment team is not in a position to evaluate whether this aspect is
     in place, as it involves issues of practice that are dealt with in the Phase 2
     review.

     Organisational process and resources (ToR C.5.2)
     214.   The Ministry of Finance is the competent authority of Slovenia for
     exchange of information purposes. In addition, the Slovene Tax Administration
     may be authorised to carry out individual tasks of exchange of information
     under DTCs. A review of Slovenia’s organisational process and resources will
     be conducted in the context of its Phase 2 review.




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       Absence of restrictive conditions on exchange of information
       (ToR C.5.3)
       215.    There are no specific legal and regulatory requirements in place which
       impose restrictive conditions on Slovenia’s exchange of information practice.
       However, the assessment team is not in a position to evaluate whether this
       aspect is in place, as it involves issues of practice that are dealt with in the
       Phase 2 review.

                  Determination and factors underlying recommendations

                                       Phase 1 determination
       The assessment team is not in a position to evaluate whether this
       element is in place, as it involves issues of practice that are dealt with in
       the Phase 2 review.




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                   SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS – 65




             Summary of Determinations and Factors
                Underlying Recommendations


                                     Factors underlying
      Determination                  recommendations                       Recommendations
 Jurisdictions should ensure that ownership and identity information for all relevant entities
 and arrangements is available to their competent authorities (ToR A.1)
 The element is in place. Ownership information on                   Slovenia should ensure
                          foreign companies having                   that ownership information
                          sufficient nexus with Slovenia             on foreign companies with
                          (in particular, having their               sufficient nexus with Slovenia
                          place of effective management              (in particular, having their
                          in Slovenia) and on foreign                place of effective management
                          partnerships carrying on                   in Slovenia) and on foreign
                          business in Slovenia or                    partnerships carrying on
                          deriving taxable income is not             business in Slovenia or
                          consistently available.                    deriving taxable income is
                                                                     available in all cases.
 Jurisdictions should ensure that reliable accounting records are kept for all relevant entities
 and arrangements (ToR A.2)
 The element is in place. The requirements to keep                   Slovenia should clarify its
                          underlying documentation                   requirements that underlying
                          are worded in a general                    documentation must be kept in
                          way and do not go into                     respect of all relevant entities
                          detail regarding the type of               and arrangements.
                          underlying documentation to
                          be kept, which could result in
                          an uneven application of the
                          obligation to keep underlying
                          documentation.
 Banking information should be available for all account-holders (ToR A.3)
 The element is in place.




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66 – SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS

                                  Factors underlying
     Determination                recommendations                       Recommendations
Competent authorities should have the power to obtain and provide information that is the
subject of a request under an exchange of information arrangement from any person within
their territorial jurisdiction who is in possession or control of such information (irrespective
of any legal obligation on such person to maintain the secrecy of the information) (ToR B.1)
The element is in place.
The rights and safeguards (e.g. notification, appeal rights) that apply to persons in the
requested jurisdiction should be compatible with effective exchange of information (ToR B.2)
The element is in place.
Exchange of information mechanisms should allow for effective exchange of information
(ToR C.1)
The element is in place.
The jurisdictions’ network of information exchange mechanisms should cover all relevant
partners (ToR C.2)
The element is in place.                                          Slovenia should continue to
                                                                  develop its EOI network with
                                                                  all relevant partners.
The jurisdictions’ mechanisms for exchange of information should have adequate provisions
to ensure the confidentiality of information received (ToR C.3)
The element is in place. No enforcement measures are               Slovenia should ensure that
                         in place where confidentiality            appropriate enforcement
                         is breached of information that           measures are in place in all
                         does not relate to a Slovene tax          cases where confidentiality is
                         liability under an information            breached of information which
                         exchange agreement other                  may be exchanged pursuant
                         than a DTC.                               to an information exchange
                                                                   agreement that is protected by
                                                                   a duty of confidentiality.
The exchange of information mechanisms should respect the rights and safeguards of
taxpayers and third parties (ToR C.4)
The element is in place.




                    PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
                   SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS – 67



                                     Factors underlying
      Determination                  recommendations                       Recommendations
 The jurisdiction should provide information under its network of agreements in a timely
 manner (ToR C.5)
 The assessment team
 is not in a position to
 evaluate whether this
 element is in place, as
 it involves issues of
 practice that are dealt
 with in the Phase 2
 review.




PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
                                                                                      ANNEXES – 69




      Annex 1: Jurisdiction’s Response to the Review Report 16


           Slovenia wishes to express its gratitude and deep appreciation for the
       excellent work carried out by the assessment team in valuating the Slovene
       legal and regulatory framework.
           Slovenia agrees with the findings of the report. We believe this report
       demonstrates that Slovenia is committed to the international standards for
       transparency and exchange of information. The Peer Review Report is an
       extremely useful document, setting out areas in which there are deficiencies,
       as well as recommendations to address these deficiencies. Slovenia will give
       careful consideration to the recommendations included in the report and make
       necessary amendments to the respective legislation.




16.    This Annex presents the jurisdiction’s response to the review report and shall not
       be deemed to represent the Global Forum’s views.


PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
70 – ANNEXES




  Annex 2: List of All Exchange-of-Information Mechanisms
                           in Force



EU regulations and multilateral agreements


     Slovenia exchanges tax information under:
               EU Council Directive 2011/16/EU of 15 February 2011 on administra-
               tive co-operation in the field of taxation. This Directive is in force
               since 11 March 2011. It repeals Council Directive 77/799/EEC of
               19 December 1977 and provides inter alia for exchange of banking
               information on request for taxable periods after 31 December 2010
               (Article 18). All EU members are required to transpose it into national
               legislation by 1 January 2013. The current EU members, covered by
               this Council Directive, are: Austria, Belgium, Bulgaria, Cyprus, Czech
               Republic, Denmark, Estonia, Finland, France, Germany, Greece,
               Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the
               Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain,
               Sweden, United Kingdom;
               EU Council Directive 2003/48/EC of 3 June 2003 on taxation of
               savings income in the form of interest payments. This Directive
               aims to ensure that savings income in the form of interest payments
               generated in an EU member state in favour of individuals or residual
               entities being resident of another EU member state are effectively
               taxed in accordance with the fiscal laws of their state of residence. It
               also aims to ensure exchange of information between member states;
               and
               EU Council Regulation 904/2010 of 7 October 2010 on administra-
               tive cooperation and combating fraud in the field of value added tax.




                    PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
                                                                                       ANNEXES – 71



         Multilateral agreement
             Slovenia is a signatory to the multilateral OECD/CoE Convention on
         Mutual Administrative Assistance in Tax Matters. The status of the multilat-
         eral Convention and its amending 2010 Protocol as at 20 July 2012 is set out
         in the table below. 17 When two or more arrangements for the exchange of
         information for tax purposes exist between Slovenia and a treaty partner, the
         parties may choose the most appropriate agreement under which to exchange
         the information.

                                                               Protocol (P)/Amended Convention
                            Original Convention                               (AC)
                         Signature                                  Signature
                        (opened on               Entry             (opened on           Entry
      Country           25-Jan-88)             into force           27-May-10)        into force
 Argentina                                                      03-11-2011 (AC)
 Australia                                                      03-11-2011 (AC)
 Azerbaijan             26-03-2003            01-10-2004
 Belgium                 07-02-1992           01-12-2000         04-04-2011 (P)
 Brazil                                                         03-11-2011 (AC)
 Canada                 28-04-2004                               03-11-2011 (P)
 Colombia                                                       23-05-2012 (AC)
 Costa Rica                                                     01-03-2012 (AC)
 Denmark                16-07-1992            01-04-1995         27-05-2010 (P)       01-06-2011
 Finland                 11-12-1989           01-04-1995         27-05-2010 (P)       01-06-2011
 France                 17-09-2003            01-09-2005         27-05-2010 (P)       01-04-2012
 Georgia                 12-10-2010           01-06-2011         03-11-2010 (P)       01-06-2011
 Germany                17-04-2008                               03-11-2011 (P)
 Ghana                                                          10-07-2012 (AC)
 Greece                 21-02-2012                               21-02-2012 (P)
 Iceland                22-07-1996            01-11-1996         27-05-2010 (P)       01-02-2012
 India                                                          26-01-2012 (AC)       01-06-2012
 Indonesia                                                      03-11-2011 (AC)
 Ireland                                                        30-06-2011 (AC)
 Italy                  31-01-2006            01-05-2006        27-05-2010      (P)   01-05-2012


17.      The updated table is available at www.oecd.org/tax/exchangeofinformation/
         conventiononmutualadministrativeassistanceintaxmatters.htm.


PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
72 – ANNEXES


                                                           Protocol (P)/Amended Convention
                          Original Convention                             (AC)
                      Signature                                 Signature
                     (opened on              Entry             (opened on               Entry
    Country          25-Jan-88)            into force           27-May-10)            into force
Japan                03-11-2011                              03-11-2011 (P)
Korea                27-05-2010           01-07-2012         27-05-2010 (P)          01-07-2012
Mexico               27-05-2010                              27-05-2010 (P)
Moldova              27-01-2011                              27-01-2011 (P)          01-03-2012
Netherlands          25-09-1990           01-02-1997         27-05-2010 (P)
Norway               05-05-1989           01-04-1995         27-05-2010 (P)          01-06-2011
Poland               19-03-1996           01-10-1997         09-07-2010 (P)          01-10-2011
Portugal             27-05-2010                              27-05-2010 (P)
Russia                                                      03-11-2011 (AC)
Slovenia             27-05-2010           01-06-2011         27-05-2010 (P)          01-06-2011
South Africa                                                03-11-2011 (AC)
Spain                12-11-2009           01-12-2010        18-02-2011      (P)
Sweden               20-04-1989           01-04-1995         27-05-2010 (P)          01-09-2011
Tunisia                                                     16-07-2012 (AC)
Turkey                                                      03-11-2011 (AC)
Ukraine              30-12-2004           01-07-2009         27-05-2010 (P)
United               24-05-2007           01-05-2008         27-05-2010 (P)          01-10-2011
Kingdom
United States        28-06-1989           01-04-1995         27-05-2011 (P)


Bilateral agreements

         Exchange of information agreements signed by Slovenia as at July 2012,
     in alphabetical order:

                                 Type of EoI                                      Date entered
           Jurisdiction         arrangement              Date signed               into force
1    Albania                          DTC             27 February 2008            4 May 2009
2    Armenia                          DTC               11 October 2010
                                      DTC               1 October 1997          1 February 1999
3    Austria
                                   Protocol          28 November 2011




                   PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
                                                                                            ANNEXES – 73



                                     Type of EoI                                       Date entered
            Jurisdiction            arrangement              Date signed                into force
 4    Azerbaijan                          DTC                9 June 2011
 5    Belarus                             DTC              6 October 2010               31 May 2011
 6    Belgium                             DTC               22 June 1998              2 October 2002
 7    Bosnia and                          DTC                16 May 2006          20 November 2006
      Herzegovina
 8    Bulgaria                            DTC             20 October 2003               4 May 2004
 9    Canada                              DTC            15 September 2000            13 August 2002
 10   China (People’s Rep.)               DTC             13 February 1995        27 December 1995
 11   Croatia                             DTC               10 June 2005          10 November 2005
 12   Cyprus                              DTC              12 October 2010              19 April 2011
 13   Czech Republic                      DTC               13 June 1997                28 April 1998
 14   Denmark                             DTC                2 May 2001                 3 June 2002
 15   Egypt                               DTC            15 December 2009
 16   Estonia                             DTC            14 September 2009             26 June 2006
      Federal Yugoslav
 17                                       DTC                15 May 1998          29 September 1999
      Republic of Macedonia
 18   Finland                             DTC            19 September 2003             16 June 2004
 19   France                              DTC                7 April 2004              1 March 2007
                                          DTC                3 May 2006           19 December 2006
 20 Germany
                                       Protocol              17 May 2011
 21   Greece                              DTC                5 June 2001              8 December 2003
 22 Guernsey                             TIEA            26 September 2011
 23 Hungary                               DTC              26 August 2004         23 December 2005
 24   Iceland                             DTC                 4 May 2011
 25 India                                 DTC             13 January 2003             17 February 2005
 26 Iran                                  DTC            20 September 2011
 27 Ireland                               DTC              12 March 2002          11 December 2002
 28 Isle of Man                          TIEA               27 June 2011
 29 Israel                                DTC             30 January 2007         27 December 2007
 30 Italy                                 DTC            11 September 2001            12 January 2010
 31   Korea                               DTC               25 April 2005              2 March 2006
 32 Kuwait                                DTC              11 January 2010
 33 Latvia                                DTC               17 April 2002         22 November 2002




PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
74 – ANNEXES

                                 Type of EoI                                     Date entered
         Jurisdiction           arrangement              Date signed              into force
34 Lithuania                          DTC                23 May 2000            1 February 2002
35 Luxembourg                         DTC                2 April 2001         18 December 2002
36 Malta                              DTC              8 October 2002            12 June 2003
37   Moldova                          DTC                31 May 2006          14 November 2006
38 Montenegro                         DTC               11 June 2003          31 December 2003
39 Netherlands                        DTC               30 June 2004          31 December 2005
40 Norway                             DTC             18 February 2008        10 December 2009
41   Poland                           DTC               28 June 1996            10 March 1998
42   Portugal                         DTC               5 March 2003            13 August 2004
43 Qatar                              DTC              10 January 2010         1 December 2010
44 Romania                            DTC                8 July 2002            28 March 2003
45 Russia                             DTC            29 November 1995            20 April 1997
46 Serbia                             DTC               11 June 2003          31 December 2003
47   Singapore                        DTC              8 January 2010         25 November 2010
48 Slovak Republic                    DTC                14 May 2003              11 July 2004
49 Spain                              DTC                23 May 2001            19 March 2002
50 Sweden                             DTC               18 June 1980          16 December 1981
51   Switzerland                      DTC               12 June 1996           1 December 1997
52   Thailand                         DTC                11 July 2003             4 May 2004
53 Turkey                             DTC                19 April 2001        23 December 2003
54 Ukraine                            DTC               23 April 2003            25 April 2007
55 United Kingdom                     DTC            13 November 2007         12 September 2008
56 United States                      DTC               21 June 1999             22 June 2001




                   PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
                                                                                      ANNEXES – 75




                    Annex 3: List of All Laws, Regulations
                       and Other Material Consulted



Commercial laws
            Companies Act
            Court Register Act
            Foundations Act
            Institutes Act
            Slovene Accounting Standards

Financial sector laws
            Banking Act
            Book Entry Securities Act
            Financial Instruments Market Act
            Payment Services and Systems Act
            Prevention of Money Laundering and Terrorist Financing Act

Taxation laws
            Corporate Income Tax Act
            Rules on books of account and other tax records for natural persons carry-
               ing out a business activity
            Tax Administration Act
            Tax Procedure Act

Miscellaneous
            Constitution
            Legal Professions Act


PEER REVIEW REPORT – PHASE 1: LEGAL AND REGULATORY FRAMEWORK – SLOVENIA © OECD 2012
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                          (23 2012 36 1 P) ISBN 978-92-64-18187-8 – No. 60287 2012
Global Forum on Transparency and Exchange of Information
for Tax Purposes
PEER REVIEWS, PHASE 1: SLOVENIA
The Global Forum on Transparency and Exchange of Information for Tax Purposes is the
multilateral framework within which work in the area of tax transparency and exchange of
information is carried out by over 100 jurisdictions which participate in the work of the Global
Forum on an equal footing.
The Global Forum is charged with in-depth monitoring and peer review of the implementation
of the standards of transparency and exchange of information for tax purposes. These
standards are primarily reflected in the 2002 OECD Model Agreement on Exchange of
Information on Tax Matters and its commentary, and in Article 26 of the OECD Model Tax
Convention on Income and on Capital and its commentary as updated in 2004, which has
been incorporated in the UN Model Tax Convention.
The standards provide for international exchange on request of foreseeably relevant
information for the administration or enforcement of the domestic tax laws of a requesting
party. “Fishing expeditions” are not authorised, but all foreseeably relevant information must
be provided, including bank information and information held by fiduciaries, regardless of the
existence of a domestic tax interest or the application of a dual criminality standard.
All members of the Global Forum, as well as jurisdictions identified by the Global Forum as
relevant to its work, are being reviewed. This process is undertaken in two phases. Phase 1
reviews assess the quality of a jurisdiction’s legal and regulatory framework for the exchange
of information, while Phase 2 reviews look at the practical implementation of that framework.
Some Global Forum members are undergoing combined – Phase 1 plus Phase 2 – reviews.
The ultimate goal is to help jurisdictions to effectively implement the international standards
of transparency and exchange of information for tax purposes.
All review reports are published once approved by the Global Forum and they thus represent
agreed Global Forum reports.
For more information on the work of the Global Forum on Transparency and Exchange of
Information for Tax Purposes, and for copies of the published review reports, please visit
www.oecd.org/tax/transparency and www.eoi-tax.org.




 Please cite this publication as:
 OECD (2012), Global Forum on Transparency and Exchange of Information for Tax Purposes Peer
 Reviews: Slovenia 2012: Phase 1: Legal and Regulatory Framework, OECD Publishing.
 http://dx.doi.org/10.1787/9789264181892-en
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