Slovenia
This report analyses the implementation of the AEOI Standard in Slovenia with respect to the requirements of the AEOI Terms of Reference. It assesses both the legal frameworks put in place to implement the AEOI Standard and the effectiveness of the implementation of the AEOI Standard in practice.
The methodology used for the peer reviews and that therefore underpins this report is outlined in Chapter 2.
Overall findings
AEOI legal framework
Slovenia’s legal framework implementing the AEOI Standard is in place and is consistent with the requirements of the AEOI Terms of Reference. This includes Slovenia’s domestic legislative framework requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (CR1) and its international legal framework to exchange the information with all of Slovenia’s Interested Appropriate Partners (CR2).
Effectiveness of AEOI in practice
Slovenia’s implementation of the AEOI Standard is on track with respect to the requirements of the AEOI Terms of Reference to ensure the effectiveness of the AEOI Standard in practice. This includes ensuring Reporting Financial Institutions correctly conduct the due diligence and reporting procedures (CR1) and exchanging the information in an effective and timely manner (CR2). Slovenia is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
Overall rating in relation to the effectiveness in practice: On Track
General context
Slovenia commenced exchanges under the AEOI Standard in 2017.
In order to provide for Reporting Financial Institutions to collect and report the information to be exchanged, Slovenia:
amended the Tax Procedure Act (ZDavP-2I, as further amended in the OJ No. 69/2017 of 8 December 2017);
amended the Rules on the implementation of the Tax Procedure Act; and
Under this framework Reporting Financial Institutions were required to commence the due diligence procedures in relation to New Accounts from 1 January 2016. With respect to Preexisting Accounts, Reporting Financial Institutions were required to complete the due diligence procedures on High Value Individual Accounts by 31 December 2016 and on Lower Value Individual Accounts and Entity Accounts by 31 December 2017.
Following the initial peer review by the Global Forum, Slovenia amended its legislative framework to address issues identified, effective from 9 December 2017.
With respect to the exchange of information under the AEOI Standard, Slovenia:
is a Party to the convention on Mutual Administrative Assistance in Tax Matters and activated the associated CRS Multilateral Competent Authority Agreement in time for exchanges in 2017;
has implemented European Directive 2011/16/EU on Administrative Cooperation in the Field of Taxation, as amended by Directive 2014/107/EU; and
has in place European Union agreements with five European third countries.1
Table 1 sets out the number of Financial Institutions in Slovenia that reported information on Financial Accounts in 2021 as defined in the AEOI Standard (essentially because they maintained Financial Accounts for Account Holders, or that were related to Controlling Persons, resident in a Reportable Jurisdiction). It also sets out the number of Financial Accounts that they reported in 2021. In this regard, it should be noted that Slovenia requires the reporting of Financial Accounts held by all non-residents and some accounts may be required to be reported more than once (e.g. jointly held accounts or accounts with multiple related Controlling Persons), which is reflected in the figures below. These figures provide key contextual information to the development and implementation of Slovenia’s administrative compliance strategy, which is analysed in the subsequent sections of this report.
Table 2 sets out the number of exchange partners to which information was successfully sent by Slovenia in the past few years (including where the necessary frameworks were in place, containing an obligation on Reporting Financial Institutions to report information, but no relevant Reportable Accounts were identified). These figures provide key contextual information in relation to Slovenia’s exchanges in practice, which is also analysed in subsequent sections of this report.
In order to provide for the effective implementation of the AEOI Standard, in Slovenia:
the Financial Administration of the Republic of Slovenia (the tax authority) has the responsibility to ensure the effective implementation of the due diligence and reporting obligations by Reporting Financial Institutions and for exchanging the information with Slovenia’s exchange partners;
technical solutions necessary to receive and validate the information reported by Reporting Financial Institutions were put in place by validating reported data against the CRS schema and business rules and sorting and preparing the data before exchanging; and
the Common Transmission System (CTS), and in the European Union (EU) the Common Communication Network (CCN), are used for the exchange of the information, along with the associated file preparation and encryption requirements.
It should be noted that the review of Slovenia’s legal frameworks implementing the AEOI Standard concluded with the determination that Slovenia’s domestic and international legal frameworks are In Place. This has been taken into account when reviewing the effectiveness of Slovenia’s implementation of the AEOI Standard in practice.
Findings and conclusions on the legal frameworks
The detailed findings and conclusions on the AEOI legal frameworks for Slovenia are below, organised per Core Requirement (CR) and sub-requirement (SR), as extracted from the AEOI Terms of Reference (see Annex C).
CR1 Domestic legal framework: Jurisdictions should have a domestic legislative framework in place that requires all Reporting Financial Institutions to conduct the due diligence and reporting procedures in the CRS, and that provides for the effective implementation of the CRS as set out therein.
Slovenia’s domestic legislative framework is in place and contains all of the key aspects of the CRS and its Commentary requiring Reporting Financial Institutions to conduct the due diligence and reporting procedures (SRs 1.1 – 1.3). It also provides for a framework to enforce the requirements (SR 1.4).
SR 1.1 Jurisdictions should define the scope of Reporting Financial Institutions consistently with the CRS.
Slovenia has defined the scope of Reporting Financial Institutions in its domestic legislative framework in accordance with the CRS and its Commentary.
SR 1.2 Jurisdictions should define the scope of Financial Accounts and Reportable Accounts consistently with the CRS and incorporate the due diligence procedures to identify them.
Slovenia has defined the scope of the Financial Accounts that are required to be reported in its domestic legislative framework and incorporated the due diligence procedures that must be applied to identify them in accordance with the CRS and its Commentary.
SR 1.3 Jurisdictions should incorporate the reporting requirements contained in Section I of the CRS into their domestic legislative framework.
Slovenia has incorporated the reporting requirements in its domestic legislative framework in accordance with the CRS and its Commentary.
SR 1.4 Jurisdictions should have a legislative framework in place that allows for the enforcement of the requirements of the CRS in practice.
Slovenia has a legislative framework in place to enforce the requirements in accordance with the CRS and its Commentary.
CR2 International legal framework: Jurisdictions should have exchange relationships in effect with all Interested Appropriate Partners as committed to and that provide for the exchange of information in accordance with the Model CAA.
Slovenia’s international legal framework to exchange the information is in place, is consistent with the Model CAA and its Commentary and provides for exchange with all of Slovenia’s Interested Appropriate Partners (i.e. all jurisdictions that are interested in receiving information from Slovenia and that meet the required standard in relation to confidentiality and data safeguards) (SRs 2.1 – 2.3).
SR 2.1 Jurisdictions should have exchange agreements in effect with all Interested Appropriate Partners that permit the automatic exchange of CRS information.
Slovenia has exchange agreements that permit the automatic exchange of CRS information in effect with all its Interested Appropriate Partners.
SR 2.2 Such an exchange agreement should be put in place without undue delay, following the receipt of an expression of interest from an Interested Appropriate Partner.
Slovenia put in place its exchange agreements without undue delay.
SR 2.3 Jurisdictions should ensure that the exchange agreements in effect provide for the exchange of information in accordance with the requirements of the Model CAA.
Slovenia’s exchange agreements provide for the exchange of information in accordance with the requirements of the Model CAA.
Assessed jurisdiction’s comments on the assessment of its legal frameworks
Slovenia wishes to express its gratitude and deep appreciation for the excellent work carried out by the Secretariat of the Global Forum and the AEOI Assessment Panel. Slovenia is confident that the AEOI legal determination report is a fair and accurate picture of the legal framework in force. We are satisfied with the conclusion that Slovenia’s legal framework implementing the AEOI Standard is in place and is consistent with the requirements of the AEOI Terms of Reference and that there are no recommendations.
Findings and conclusions in relation to effectiveness in practice
The detailed findings and conclusions in relation to effectiveness in practice of AEOI for Slovenia are below, organised per Core Requirement (CR) and then per sub-requirement (SR) as extracted from the AEOI Terms of Reference (see Annex C).
CR1 Effectiveness in practice: Jurisdictions should ensure that in practice Reporting Financial Institutions correctly implement the due diligence and reporting procedures, which includes a requirement for jurisdictions to have in place an administrative framework to ensure the effective implementation of the CRS.
Slovenia’s implementation of the AEOI Standard is on track with respect to ensuring that Reporting Financial Institutions are correctly conducting the due diligence and reporting procedures and are therefore reporting complete and accurate information. This includes ensuring effectiveness in a domestic context, such as through having an effective administrative compliance framework and related procedures (SR 1.5), and collaborating with exchange partners to ensure effectiveness (SR 1.6). Slovenia is encouraged to continue its implementation process to ensure its ongoing effectiveness.
SR 1.5 Jurisdictions should ensure that in practice Reporting Financial Institutions identify the Financial Accounts they maintain, identify the Reportable Accounts among those Financial Accounts, as well as their Account Holders, and where relevant Controlling Persons, by correctly conducting the due diligence procedures and collect and report the required information with respect to each Reportable Account. This includes having in place:
an effective administrative compliance framework to ensure the effective implementation of, and compliance with, the CRS. This framework should:
be based on a strategy that facilitates compliance by Reporting Financial Institutions and which is informed by a risk assessment in respect of the effective implementation of the CRS that takes into account relevant information sources (including third party sources);
include procedures to ensure that Financial Institutions correctly apply the definitions of Reporting Financial Institutions and Non-Reporting Financial Institutions; and
include procedures to periodically verify Reporting Financial Institutions’ compliance, conducted by authorities that have adequate powers with respect to the reviewed Reporting Financial Institutions, with procedures to access the records they maintain.
effective procedures to ensure that Financial Institutions, persons or intermediaries do not circumvent the due diligence and reporting procedures;
effective enforcement mechanisms to address non-compliance by Reporting Financial Institutions;
strong measures to ensure that valid self-certifications are always obtained for New Accounts;
effective procedures to ensure that each, or each type of, jurisdiction-specific Non-Reporting Financial Institution and Excluded Account continue to present a low risk of being used to evade tax; and
effective procedures to follow up with a Reporting Financial Institution when undocumented accounts are reported in order to establish the reasons why such information is being reported.
In order to ensure that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures, Slovenia implemented all of the requirements in accordance with expectations. The key findings were as follows:
Slovenia implemented an overarching strategy to ensure compliance with the AEOI Standard developed after conducting a risk assessment that took into account a range of relevant information sources, such as internal data from the tax register and the results of analysing information reported by the Reporting Financial Institutions. Slovenia’s compliance strategy facilitates compliance and incorporates a credible approach to enforcement. Slovenia intends to keep its compliance strategy and risk assessment under review to ensure its effectiveness on an ongoing basis.
Slovenia has worked effectively to understand its population of Financial Institutions, utilising various relevant information sources, such as the tax register, lists of regulated entities maintained by the regulators, relevant associations’ memberships and the list of Foreign Financial Institutions for FATCA purposes. Slovenia is also taking action to ensure that Reporting Financial Institutions are classifying themselves correctly and reporting as required. Slovenia intends to keep its understanding of its Financial Institution population up to date on a routine basis.
The institution responsible for implementing Slovenia’s compliance strategy appears to have the necessary powers and resources to discharge its functions. With respect to resourcing, Slovenia has assigned the equivalent of five full time staff to monitor and ensure compliance by Reporting Financial Institutions, including two inspectors, one controller and two staff in charge of exchanges with partners. These officers have access to IT systems and tools to conduct risk assessments (e.g. an IT application to assist with risk analysis). Overall, they appear to have effectively implemented an operational plan to verify compliance with the requirements, incorporating appropriate compliance activities, including by conducting desk-based audits and a pilot horizontal compliance program with the largest Financial Institutions, which will inform the planned further rollout of onsite audits.
It appears that Slovenia effectively enforces the requirements, starting with a cooperative approach with Financial Institutions and moving to the inspection of records of Reporting Financial Institutions in field and desk-based audits. Slovenia has issued warnings for cases of non-compliance identified and is also able to apply sanctions for non-compliance, although these have not been used so far. It also appears that Slovenia is ready to take effective action to address circumvention of the requirements if such circumvention is detected, and take action to ensure self-certifications are obtained as required and to follow up on undocumented accounts.
Slovenia will also keep its jurisdiction-specific list of Excluded Accounts under review to ensure they continue to pose a low risk of being used for tax evasion purposes (Slovenia does not have a jurisdiction-specific list of Non-Reporting Financial Institutions).
Table 3 provides a summary of the specific activities undertaken, or that are planned to be undertaken, in relation to each of the key parts of the framework described above.
With respect to the Financial Account information collected and sent by Slovenia, the presence of the key data point of the Tax Identification Numbers appeared to be in line with most other jurisdictions. However, while the collection and reporting of dates of birth is generally higher across jurisdictions, Slovenia nevertheless reported a lower rate of collection of dates of birth when compared to other jurisdictions. This is a key data point for exchange partners to effectively utilise the information. Slovenia stated that no undocumented accounts were reported.
One exchange partner highlighted issues with respect to the information received relating to missing accounts. More generally, many of the exchange partners that received a significant number of records from Slovenia indicated that they achieved a success rate when matching the information received from Slovenia with their taxpayer database that was broadly equivalent to, or better than, what they usually achieve.
Based on these findings it was concluded that Slovenia is fully meeting expectations in ensuring that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures, including by having in place the required administrative compliance framework and related procedures. Slovenia is encouraged to continue its implementation process accordingly.
SR 1.6 Jurisdictions should collaborate on compliance and enforcement. This requires jurisdictions to:
use all appropriate measures available under the jurisdiction’s domestic law to address errors or non-compliance notified to the jurisdiction by an exchange partner; and
have in place effective procedures to notify an exchange partner of errors that may have led to incomplete or incorrect information reporting or non-compliance with the due diligence or reporting procedures by a Reporting Financial Institution in the jurisdiction of the exchange partner.
In order to collaborate on compliance and enforcement, it appears that Slovenia implemented all of the requirements in relation to issues notified to them (i.e. under Section 4 of the MCAA or equivalent) in accordance with expectations. While no such notifications have yet been received, Slovenia has the necessary systems and procedures to process them as required. It also appears that Slovenia will notify its partners effectively of errors or suspected non-compliance it identifies when utilising the information received.
Based on these findings it was concluded that Slovenia is fully meeting expectations in relation to collaborating with its exchange partners to ensure that Reporting Financial Institutions correctly conduct the due diligence and reporting procedures. Slovenia is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
CR2 Effectiveness in practice: Jurisdictions should exchange the information effectively in practice, in a timely manner, including by sorting, preparing, validating and transmitting it in accordance with the AEOI Standard.
Slovenia’s implementation of the AEOI Standard is on track with respect to exchanging the information effectively in practice, including in relation to sorting, preparing and validating the information (SR 2.4), correctly transmitting the information in a timely manner (SRs 2.5 – 2.8) and providing corrections, amendments or additions to the information (SR 2.9). Slovenia is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
SR 2.4 Jurisdictions should sort, prepare and validate the information in accordance with the CRS XML Schema and the associated requirements in the CRS XML Schema User Guide and the File Error and Correction-related validations in the Status Message User Guide (i.e. the 50000 and 80000 range).
Feedback from Slovenia’s exchange partners did not raise any specific concerns with respect to their ability to process the information received from Slovenia and therefore with respect to Slovenia’s implementation of these requirements. More generally, none of Slovenia’s exchange partners reported rejecting files received, due to the technical requirements not being met. This is a very low amount when compared to other jurisdictions.
Based on these findings it was concluded that Slovenia is fully meeting expectations in relation to sorting, preparing and validating the information. Slovenia is encouraged to continue its implementation process accordingly, to ensure its ongoing effectiveness.
SR 2.5 Jurisdictions should agree and use, with each exchange partner, transmission methods that meet appropriate minimum standards to ensure the confidentiality and integrity of the data throughout the transmission, including its encryption to a minimum secure standard.
In order to put in place an agreed transmission method that meets appropriate minimum standards in confidentiality, integrity of the data and encryption for use with each of its exchange partners, Slovenia linked to the CTS and the CCN, which is used for exchanges within the EU.
Based on these findings it was concluded that Slovenia is fully meeting expectations in relation to agreeing and using appropriate transmission methods with each of its partners. Slovenia is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.6 Jurisdictions should carry out all exchanges annually within nine months of the end of the calendar year to which the information relates.
Feedback from Slovenia’s exchange partners did not raise any concerns with respect to timeliness of the exchanges by Slovenia and therefore with respect to Slovenia’s implementation of this requirement.
Based on these findings it was concluded that Slovenia is fully meeting expectations in relation to exchanging the information in a timely manner. Slovenia is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.7 Jurisdictions should send the information in accordance with the agreed transmission methods and encryption standards.
Feedback from Slovenia’s exchange partners did not raise any concerns with respect to Slovenia’s use of the agreed transmission methods and therefore with Slovenia’s implementation of this requirement.
Based on these findings it was concluded that Slovenia is fully meeting expectations in relation to sending the information in accordance with the agreed transmission methods and encryption standards. Slovenia is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.8 Jurisdictions should have the systems in place to receive information and, once it has been received, should send a status message to the sending jurisdictions in accordance with the CRS Status Message XML Schema and the related User Guide.
One exchange partner highlighted delays in the sending of a status message by Slovenia. It was noted that Slovenia sent the status message shortly thereafter and appears to be successfully addressing the issues to ensure that status messages are sent in accordance with the requirements.
Based on these findings it was concluded that Slovenia is fully meeting expectations in relation to the receipt of the information. Slovenia is encouraged to continue to ensure the ongoing effectiveness of its implementation.
SR 2.9 Jurisdictions should respond to a notification from an exchange partner as referred to in Section 4 of the Model CAA (which may include Status Messages) in accordance with the timelines set out in the Commentary to Section 4 of the Model CAA. In all other cases, jurisdictions should send corrected, amended or additional information received from a Reporting Financial Institution as soon as possible after it has been received.
Slovenia appears ready to respond to notifications and to provide corrected, amended or additional information in a timely manner and no such concerns were raised by Slovenia’s exchange partners and therefore with respect to Slovenia’s implementation of these requirements.
Based on these findings it was concluded that Slovenia appears to be meeting expectations in relation to responding to notifications from exchange partners and the sending of corrected, amended or additional information. Slovenia is encouraged to continue to ensure the ongoing effectiveness of its implementation.
Assessed jurisdiction’s comments on the assessment of effectiveness in practice
Slovenia wishes to express its gratitude and deep appreciation for the excellent work carried out by the Global Forum on Transparency and Exchange of Information and assessors from the AEOI Assessment Panel.
Slovenia is confident that the AEOI report is a fair and accurate picture of the requirements of the AEOI Terms of Reference to ensure the effectiveness of the AEOI Standard in practice for achieving a higher level of tax compliance.
Note
← 1. Andorra, Liechtenstein, Monaco, San Marino and Switzerland.