PwC Slovenia provides a full range of corporate taxation services. Our specialist teams provide customized solutions for your specific individual needs and objectives, while keeping you informed of relevant changes in the tax and legal landscape. This allows us to maximize your cost effectiveness and manage your compliance in the face of changing regulations.
Corporate tax compliance
Additionally, to our opinions on your specific inquiries, our corporate income tax specialists will review your corporate income tax returns. The compliance review may be performed as a top-line compliance review or an in-depth analysis, depending on your needs. Top-line compliance reviews are especially recommendable if performed on a regular basis through a longer period, while in-depth analysis is usually required upon significant changes of tax legislation. Compliance reviews may relate to an entire selected tax period or part of it.
The PwC Slovenia Compliance Department offers the following services within the corporate tax field:
- Consulting, preparation of tax opinions and interpretation of local and international tax legislation;
- CIT compliance review
- Tax structuring
- Support in compliance mandates
- Corporate Tax Compliance Review
Support in compliance mandates
Our support helps create an easier and more efficient compliance life for our clients. In addition, we support our consultant teams in all compliance-related matters.
If you have any challenges or questions in connection with your tax returns, assessments or correspondence with the tax authorities - let us know.
Corporate Tax Compliance Review
- Review of recording of revenues and costs in the corporate income tax return in accordance with the Corporate Income Tax Act;
- Assessing the appropriateness of accounting policies for business purposes and their influence on corporate income tax assessment (analysis of the accounts, accruals, provisions, write-downs and write-offs, traveling expenses, entertainment expenses);
- Consistency check of recorded items in the balance sheet with book-keeping documents and reviewing the appropriateness of documents for corporate income tax purposes;
- Critical judgment of tax non-deductible costs and expenses;
- Review of bonuses schemes and other additional remuneration of employees in addition to salaries;
- Review of management fees and recharges;
- Use of all feasible tax allowances and credits in the most optimal manner, considering the provisions for claw-back of tax allowances;
- Preparation for tax audit.
Transfer pricing
Transfer prices significantly affect the entire business chain of companies; from research and development, production, marketing, to distribution and sales as well as after-sales activities. As a general rule, all international companies regularly face the challenges arising with the complex and rapidly developing area of transfer pricing. When a transfer pricing concern arises in a business model, substantial savings and profits are in question.
At PwC Slovenia we are aware of the importance of transfer pricing, and, being part of a global network, we offer your business our vast international experience to produce optimal results for your business at optimal value. Our experts will advise you on the strategy and methodology of setting transfer prices as well as assist with the documentation on transfer prices, compliant with Slovene legislation.
- Transfer Pricing Documentation
- Avoidance and resolution of disputes related to transfer pricing
- Transfer Pricing Facts
Transfer Pricing Documentation
In the area of transfer pricing, Slovenian tax legislation is coordinated with the OECD guidelines for determining transfer pricing for international companies and tax administrations. The current legislation also determines which transfer pricing documentation the taxpayer must keep and submit to the tax authority in the event of a tax audit.
Purpose of the Transfer Pricing documentation is to defend the compliance with the arm's length principle. Arm's length principle refers to transactions between related parties that should be valued as if they had been carried out between unrelated parties, each acting in their own best interest.
The transfer pricing documentation must therefore be designed in such a way that, in the event of a tax inspection, compliance with the arm's length principle will be properly presented and substantiated.
PwC Slovenia’s experienced consultants can help you create documentation in the field of transfer pricing, thereby reducing the risk of unforeseen additional tax obligations related to transfer pricing.
Avoidance and resolution of disputes related to transfer pricing
Advance Pricing Arrangements (APAs), which are often used as a useful strategy to resolve disputes with the ATO and/or as a preventative approach where audit risk may otherwise create uncertainties. Such an agreement for a predetermined fixed period reduces the risk of unpredictable tax inspections.
With our help you can:
- Avoid wasting valuable management time dealing with transfer pricing audits;
- Avoid increasing your tax base;
- Avoid paying higher tax rates;
- Avoid paying high penalties;
- Avoid the danger of double taxation.
As a result of the taxpayer’s failure to provide documentary evidence on transfer pricing to the Slovenian tax authorities, penalties of up to EUR 30.000 may be imposed. Other adjustments (increases) of tax base and penalties are also possible.
This shows the vital importance of effective and efficient documenting and benchmarking of intra-group transfer pricing policies and practices, for organizations seeking to protect themselves from revenue authority scrutiny and from potential financial consequences.
Transfer Pricing Facts
According to a Global transfer pricing survey, transfer pricing represents the most significant international tax issue facing companies with international exposure. This is further confirmed by the following facts:
- 68% of all survey respondents stated that transfer pricing is the biggest international tax issue they face in the next two years.
- 86% of parent and 93% of subsidiary respondents identified transfer pricing as the most important international tax issue they currently face.
- 38% of respondents who have experienced an audit have reviewed their transfer pricing documentation and a majority of them improved their documentation practices as a result.
- 42% of all respondents believe an audit is likely in the next two years.
- Services and intangibles are attracting increasing attention from tax authorities worldwide
- MNEs should expect a transfer pricing audit as a rule rather than an exception.
- All companies are exposed to audits; however, the larger companies have a higher than average exposure.
A penalty was actually imposed in half of the cases in which it was threatened
Transfer pricing documentation
Our approach to preparation of transfer pricing documentation
An increasing number of countries are implementing laws regarding the preparation of transfer pricing documentation. PwC Slovenia is able to help you to prepare consistent documentation for all types of inter-company transactions in compliance with local regulations.
A combination of international exposure and multiple documentation requirements mean that corporations must prepare local transfer pricing documentation in every single country in which they operate. This is particularly the case in Slovenia with stringent regulations governed by Article 382 of the Slovenian tax procedure act (ZDavP-2). In this context, we can assist you to:
- supply information on the developments of local and foreign regulations and specific considerations;
- reduce high administrative costs;
- prepare consistent documentation for all types of inter-company transactions in compliance with local regulations. This includes the preparation of country specific risk assessment and country specific documentation when necessary.
What is Global Coordinated Documentation®?
Global Coordinated Documentation® approach assists clients in managing transfer pricing documentation cost-efficiently by creating local documentation based on global common data and information.
At PwC Slovenia we utilised our extensive international network of transfer pricing experts to create a Global Core Documentation® scheme.
This scheme can be tailored to suit your needs and requirements. The first step in the process is the prioritization, analysis and formation of a core file of documents. It consists of group-wide information, applicable to all countries (e.g. Master File). In the second phase, local economic analysis and presentation may be added to form a local report (e.g. Local File). Distinguishing core from local is a dynamic process and corresponds to your specific needs, along with the risks your operation might be facing. In this respect, it reflects both the operational and tax objectives of the business.
| Step 1 | Step 2 | Step 3 |
Create a joint global and local team (at PwC Slovenia) to fit your needs |
Map related-party transactions of identified pilots |
Complete Global Core Documentation |
Assess risks and opportunities |
Analyse global and local operations, financial situation and corporate legal structure |
Local validation |
Establish scope of activities and work (countries, regions, pilots) |
Define common platform of inter-company dealings |
Local country documentation reports (roll-out) |
Project planning and designing a timetable |
|
Ensure consistency among different counties |
Optimize your business
Value chain transformation
We can design and implement tax efficient business models by combining and integrating the concepts of value-based management, market and customer management, supply-chain management, transaction processing efficiencies, integrated systems and optimal tax structures in an international environment.
“Effective IP structuring”
We can optimize the efficiency of your intellectual property from a tax perspective enabling you to monitor profits, structure your intellectual property effectively and create intellectual property transfer pricing policies. According to Slovenian legislation, the tax authorities can require the taxpayer to produce supporting documentation in order to determine the true nature of transactions and whether unjustifiable profit monitoring has occurred. In this context, taxpayers also have the responsibility to justify the deductibility of their business expenses. Some of the risks we can help you reduce:
- Payment of management fees without proper substantiation;
- Granting interest-free loans or excess interest payments;
- The volatility of margins;
- Inconsistent intra-community inter-company dealings.
Create value
At PwC Slovenia we adhere to the highest standards and ensure our clients' satisfaction. In this context, preparing a local or global documentation set allows you to manage your transfer pricing documentation in the optimum way. Implementing our documentation techniques allows you to:
- Protect your business from penalties and double taxation;
- Consolidate your group’s transfer pricing policy and correspond to your business objectives and strategies;
- Have a transparent transfer pricing policy allowing for coherent pricing methods and comparable data within your group;
- Have a transfer pricing policy tailored to your local needs, allowing for perfect flexibility in the changing business environment and goals;
- Save money by avoiding duplicate collection efforts.
Mergers and Acquisitions
Mergers and Acquisitions Services
Regardless of the size of your organization or the sector of your business operations, establishing an appropriate corporate structure is essential to minimize tax and operational costs. Organizations can grow organically or by expanding through mergers and acquisitions. However, to maintain a sustainable growth your company will need foresight and expertise. PwC Slovenia has established an experienced multi-disciplinary and dedicated team of experts who specialize in tax and corporate law. We can help you to perform mergers and acquisitions activity in a tax-effective manner and to devise an efficient tax-structuring strategy to reduce your overall tax liability.
How can we help?
We will support you in building strategic growth of your company by providing credible advice on tax effective mergers and acquisitions in the light of Slovenian and EU tax and corporate regulations. We ensure that the legal structure of your business and sales operations is geared towards providing you with the utmost benefits. We will help you draft contracts and other tax requirements to ensure that tax efficiency is fully integrated into the way you do business.
Tax structuring and mergers and acquisitions demand a multidisciplined approach of taxes, finance and law in order to provide you with comprehensive advice in all aspects of your national or international business operations. The net result of our performance will show in increased shareholder value.
PwC Slovenia can help you:
- Utilize your intellectual property;
- Reduce your group’s tax exposure by maximizing the benefits from differences in corporate tax rates across the globe;
- Minimize your costs and reduce tax inefficiencies;
- Combine your business goals with tax optimization.
Key services
- Developing acquisition strategy and target research by financial and tax due diligence
- Advice on tax efficient restructuring techniques such as mergers, demergers, share-to-share exchange and transfers of assets
- Implementing procedures for tax-neutral restructuring of your operations within Slovenia or within your international operations
- Providing assistance to find tax efficient organizational structures
- Advice on international tax planning and structuring for tax efficient profit repatriation with reduction of tax leakage
- Advice on accounting impacts of the new Slovenian Accounting Standards 2016 and IFRS on business combinations
- Advice on the application and interpretation of international tax law
- Advice on effective tax strategies for licenses, software and other intellectual property
- Helping you with drafting necessary contracts and tax applications
- Developing tax efficient exit strategies etc.
Real estate tax services
Types of real estate services
We provide tax advice on all real estate issues from the straightforward to the highly complex including:
- Real estate transfer tax
- Real estate related VAT issues
- Capital gains tax
- Accounting principles in the field of SAS 2016 and IFRS
- Property encumbrances and its finance and tax effects
- Assets vs. share deals
More complex issues require involving a combination of interdisciplinary real estate, tax, legal and financial expertise. Such high-profile work includes the following services:
· Domestic and international tax structuring, including advice on:
o Beneficial holding location
o Setting up company structures
o Development issues
o Exit strategies etc.
· Mergers and acquisitions, along with post-deal restructuring, including due diligence for both acquisitions and disposals
· Setting up of real estate fund in various tax jurisdictions through PwC Global Network
· Value Added Tax and transfer tax optimization
· Providing advice on utilization of investment tax credits and optimization of capital gains
· Buy side and supply side Real Estate Deal Support services – REDS
Our approach
- We provide one lead advisor through the entire transaction process (buy/sell)
or/and experts for specific tasks in the process - Interdisciplinary approach (real estate / financial / tax / legal)
- Internationally integrated real estate network (investors and real estate markets)
- Consistent real estate deal support across Europe
- Proactive approach / solution orientation
- Transparent and efficient process management
- High flexibility – dedicated teams
Scope of real estate deal support tax services post-deal
- Proforma deal structure
- Initial structuring
- Holding
- Finance
- Repatriations
- Exit
- Share vs. asset deal
- Financial modelling / business plan / exit strategy - tax assumptions
- Deal strocturing
- Due diligence
- Draft sale and purchase agreement (e.g. reps/warranties/commercial terms)
- Negotiation strategy
- Timing issues
- Support on financing
- Vendor tax position
- Post deal transformation
Scope of real estate deal support tax services – supply side
- Define rationale for sale
- Define the scope of the transaction / marketable product (e.g. REIT)
- Price expectations / indiciative valuation
- Financial / accounting / tax impact
- Exit options
- Model Vendor acquisition stroctur
- Repatriation planning
- Target analysis
- Modify existing strocture
- Due diligence preparation
- Vendor DD report
- Refinance
- Due diligence execution (data room, mgmt presentation, Q&A-session, site visits)
- Draft sale and purchase agreement
- Negotiations on tax issues
- Closing
- Post-closing services
We are able to draw on the expertise of our international real estate network to ensure that both international and home country requirements of the investor are addressed on a seamless basis.
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