Slovenia Adopts Intervention Act Impacting Tax and Employment Laws
On 11 May 2026, the Slovenian Parliament adopted the Act on Intervention Measures for the Development of Slovenia (ZIURS), introducing significant reforms across various sectors, including income tax, social security contributions, VAT, employment law, pensions, long-term care, and healthcare. These reforms signal a substantial shift in Slovenia's economic policy framework for businesses and investors.
VAT Reductions on Food and Energy
ZIURS introduces the following VAT reductions:
- A permanent reduction of the VAT rate from 9.5% to 5% on 15 categories of basic staple foodstuffs, as well as seeds, seedlings, and fertilizers.
- A temporary reduction of the VAT rate from 22% to 9.5% on electricity, natural gas, district heating, and firewood for the period from 1 July 2026 to 31 March 2027.
These measures aim to alleviate the impact of inflation on consumers, particularly vulnerable groups, by reducing the cost of essential goods and services.
Implications for Businesses
The VAT reductions are expected to have several implications for businesses:
- Retailers and suppliers of the specified goods and services will need to adjust their pricing structures to reflect the new VAT rates.
- Businesses may experience changes in consumer demand due to the reduced prices of essential goods and services.
- Accounting and financial reporting systems will require updates to accommodate the new VAT rates and ensure compliance with tax regulations.
Broader Economic Impact
By reducing the VAT on essential items, the government aims to stimulate economic activity and support households facing financial pressures. The temporary reduction on energy sources is particularly significant in the context of rising energy prices and aims to provide relief during the specified period.
For more detailed information, refer to the official announcement: Slovenia's Intervention Act on the horizon: how will it affect your business?
