Slovenia offers a friendly business environment to freelancers interested in this welcoming EU member country. The location of Slovenia is conveniently located between nations on the eastern and western side of the Eurozone. There are many social benefits for freelancers who stay in the country. If you plan to stay more than 183 days, this is the point at which you start paying taxes. Become a freelancer and get your solo business started in Slovenia by following the basic guidelines offered below.
Overview of Options to Start Freelancing in Slovenia
Freelancing in Slovenia opens up many options to solopreneurs. This country makes it easy to get started running your freelance business. However, you need to prepare for this venture. Although there are many options for you to be a freelancer in Slovenia, in this industry there is a rule of thumb that you should carefully consider: Do what you love. When you present your freelancing business to others, they will often be motivated to work with you because of your personal investment in becoming the best at whatever it is that you do.
Legal Obligations for Freelancers in Slovenia
What legal obligations do you have as a freelancer in Slovenia? The answer to this question can have a significant impact on your business over time. The rules for taxation, registration and VAT are just part of what you must consider. You will also need a robust financial management system to ensure that your business maintains a healthy level of cash flows. It’s normal to get overwhelmed by all of these obligations, so this guide breaks down the issues into parts that are easier to absorb.
Income Tax for Freelancers in Slovenia
Personal income taxes must be paid by freelancers who earn income in Slovenia after staying more than 183 days in the country. This tax applies only to the income earned while conducting business in Slovenia, and this even applies to freelancers who set up an e-residency. In addition to the personal income tax, there are social contributions and VAT that freelancers must consider.
The system for social security was established under the Pensions and Disability Insurance Act. Social contributions cover a range of services, and this includes pension, disability, health insurance and maternity.
- Income tax and social contribution in Slovenia: There is a flat tax rate of 15.5 percent that covers social contributions on personal income earned through freelancing. This applies for contract-based work.
- The tax rate for pension and disability is just above 24 percent for self-employed income that isn’t contract-based work.
- The contribution to health insurance is just above 13 percent for income that isn’t contract-based work.
Bookkeeping and Accounting for Freelancers in Slovenia
Xolo products can ensure that your bookkeeping records are accurate, and this makes it easier to do your taxes every year. Accounting is different from bookkeeping, and this is the process that will produce your company’s balance sheets. If you plan to grow as a business in the future, you must plan accordingly. Selecting the right method of accounting for your business depends on the nature and size of your operations. You can consult an accounting professional, or use Xolo to help you decide.
Here is an overview of the different accounting methods you can use:
Cash accounting: Most freelancers will start by using the cash basis of accounting. This means that the revenues you earn minus the costs of business expenses will give you a net cash amount.
Accrual accounting: This is a more complex form of accounting based on the generally accepted accounting principles, or GAAP, in the United States. This allows you to maintain an accounts receivable, which recognizes revenues as they are earned instead of when they are paid.
Tax basis for accounting: This is a procedure that selects from different methods of depreciation and tax deductions in order to minimize the total tax liability of the business. This is more relevant when the business is generating substantial amounts of revenue.
VAT Obligations for Freelancers in Slovenia
The VAT is an obligation that must be observed by anyone freelancing in Slovenia. This is administered through a bureaucratic institution called the Ministry of Finance. There is a threshold income which must be met in order for VAT to apply. This is 50,000 EUR, which means that if annual sales are below this amount, you don’t need to register for VAT.
Here is a summary of the key VAT obligations for freelancers in Slovenia:
- The standard VAT rate in Slovenia is 22 percent, and it applies to anything that doesn’t fall within the reduced or zero rate for VAT.
- The reduced rate is 9.5 percent, which applies to a variety of foods, agricultural products, artwork, properties, clothing and domestic items.
- There is also a second reduced VAT rate of five percent, which only applies to the sale of books and newspapers, either physical or in electronic formats.
Invoicing as a freelancer in Slovenia
Sending invoices to customers is a part of making your professional presentation. Invoicing as a freelancer is also a part of your marketing. Clients will get an impression of your business capacity by the way you handle your invoicing. This means that the better quality will be likely to lead you to earn repeat customers. Once you establish a line of communication with a customer through e-mail invoicing, you can contact them for special offers and coupons to earn repeat business.
In addition, a good invoice system should be VAT compliant and help you to manage your affairs from a real-time business dashboard. Freelancers generally need a system of getting paid, creating invoices and managing their business expenses. Xolo Go has advanced, robust features to do these admin tasks so that you can focus on running your freelance business in Slovenia.
How to Open Freelance Business in Slovenia
The Republic of Slovenia makes it easy to start working as a freelancer. In this country, you would register as a sole trader. This is a simple process that doesn't take a lot of time. You get to keep all of your business profits after paying taxes, but you are also liable for any debt obligations. Freelancing in Slovenia offers a great opportunity to balance your work life with personal goals, so it's helpful to know how easy it can be to get started.
Steps to open freelance business in Slovenia:
- Select a business name and accounting method.
- Register as a sole trader with the Slovenian Business Register.
- Start marketing your services and find your first customers as a freelancer in Slovenia.
There is also another option for starting a freelance business in Slovenia which is to open an Estonian e-resident business with the help of Xolo Leap. Once this is set up, Xolo Leap will also help you to automate boring admin tasks like invoicing, tax reporting, deducting business expenses so you can work as a freelancer from any location in the world remotely and freely.
Open your solo EU business with Xolo Leap
Freelancers can now run a business from anywhere in the world through the e-residency option through Xolo Leap. This is a great way to start a business freelancing in Slovenia with a minimum setup requirement. Stay compliant with the tax system, and use it to help set up a business bank account. Tax laws in Slovenia are fairly simple, so you can get started right away after registering. Xolo Leap will help you simplify this process, reduce the headaches and thrive a freelance business in Slovenia.
