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GLOBAL FORUM ON TRANSPARENCY AND EXCHANGE OF INFORMATION FOR TAX PURPOSES

Peer Review Report Phase 2 Implementation of the Standard in Practice


SLOVENIA

Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews: Slovenia 2014
PHASE 2: IMPLEMENTATION OF THE STANDARD IN PRACTICE

April 2014 (reflecting the legal and regulatory framework as at November 2013)

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 (2014), Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews: Slovenia 2014: Phase 2: Implementation of the Standard in Practice, OECD Publishing. http://dx.doi.org/10.1787/9789264210158-en

ISBN 978-92-64-21014-1 (print) ISBN 978-92-64-21015-8 (PDF)

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

Corrigenda to OECD publications may be found on line at: www.oecd.org/publishing/corrigenda.

OECD 2014

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TABLE OF CONTENTS 3

Table of Contents

About the Global Forum . 5 Executive Summary . 7 Introduction11 Information and methodology used for the peer review of Slovenia .11 Overview of Slovenia . 12 Recent developments17 Compliance with the Standards 19 A. Availability of Information 19 Overview 19 A.1. Ownership and identity information 21 A.2. Accounting records 49 A.3. Banking information 57 B. Access to Information . 63 Overview 63 B.1. Competent Authoritys ability to obtain and provide information . 64 B.2. Notification requirements and rights and safeguards. 74 C. Exchanging Information 77 Overview 77 C.1. Exchange of information mechanisms 78 C.2. Exchange of information mechanisms with all relevant partners 86 C.3. Confidentiality 88 C.4. Rights and safeguards of taxpayers and third parties. 92 C.5. Timeliness of responses to requests for information 92

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4 TABLE OF CONTENTS Summary of Determinations and Factors UnderlyingRecommendations. 99 Annex1: Jurisdictions Response to the Review Report103 Annex2: List of all Exchange-of-Information Mechanisms inForce . 104 Annex3: List of all Laws, Regulations and Other Material Consulted .110 Annex4: People Interviewed During the On-Site Visit .111

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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 120jurisdictions, 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 Article26 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 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 jurisdictions legal and regulatory framework for the exchange of information, while Phase2 reviews look at the practical implementation of that framework. Some Global Forum members are undergoing combined Phase1 and Phase2 reviews. The Global Forum has also put in place a process for supplementary reports to follow-up on recommendations, as well as for the ongoing monitoring of jurisdictions following the conclusion of a review. 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 refer to www.oecd.org/tax/transparency and www.eoi-tax.org.

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EXecutive SummarY 7

Executive Summary
1. This report summarises the legal and regulatory framework for transparency and exchange of information in Slovenia as well as its practical implementation. The international standard, which is set out in the Global Forums 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 authoritys 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. The assessment of effectiveness in practice has been performed in relation to a three year period (July 2009 to June 2012). 2. Slovenia is one of the states of former Yugoslavia and gained independence on 25June 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 information on the owners of bearer shares, which may be issued by both public limited companies and limited partnerships with share capital. No ownership 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

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8 EXecutive SummarY
combination of the obligations under Anti Money Laundering/Counter Financing of Terrorism (AML/CFT) legislation and the general tax obligations to maintain and submit information to the Slovene tax authorities permit that 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 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. 5. A general obligation to keep accounting records is in place in respect of all relevant entities and arrangements. 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. In practice, by virtue of its thorough system of registration, ownership and identity information is available in Slovenia and directly available to the Tax Administration in the vast majority of cases. In addition, legal obligations in relation to accounting information and underlying documents are generally respected by all entities carrying on business activities, therefore, the information was available and exchanged when requested, as confirmed by the comments received from Slovenias treaty partners. 8. 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. 9. Slovenias exchange of information responsibilities lie with the International Information Exchange Unit (the Unit), which is part of the General Tax office of the Tax Administration and acts as the central liaison office. To answer exchange of information requests, the Unit relies on the wide range of information to which it has direct access. However, in most cases, the incoming requests are transferred to a Local Tax Office/Special Tax Office which is responsible for collecting the requested information from the person concerned or from a third party in possession of the information. Slovenia also exchanges information spontaneously and automatically with an increasing number of partners.

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EXecutive SummarY 9

10. Slovenia has a network of information exchange mechanisms that covers 94jurisdictions, (including all relevant partners) 58 by way of a DTC and 3 by way of a TIEA. Information can be exchanged under DTCs, TIEAs, the OECD/CoE Convention on Mutual Administrative Assistance in Tax Matters (Multilateral Convention) and EU instruments. The Multilateral Convention covers 33 jurisdictions that Slovenia does not have a bilateral agreement with. The confidentiality 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. 11. During the period under review, Slovenia received a total of 74 requests for information (18 requests received from 1July 2009 to 31December 2009, 18 for 2010, 27 for 2011 and 11 for the period from 1January 2012 to 30June 2012), from 17 treaty partners, the most significant being Austria, Croatia, Germany and Italy. Slovenias response timeframe is generally good. On average, for the period under review, 60% of the requests were answered in less than 90days and 85% in less than 180days. However, some peers have noted that status updates are not provided when answers cannot be provided within 90days. 12. Comments received by Slovenias main treaty partners are very positive and reflect the efficient EOI process in place in Slovenia and the appropriate resources devoted to it. They show that Slovenia is a valuable treaty partner able to provide complete answers to the majority of the EOI requests they receive every year. Comments received from Slovenias treaty partners indicate that Slovenia is fully committed to the international standard of transparency and exchange of information for tax purposes. 13. A follow up report on the steps undertaken by Slovenia to answer the recommendations made in this report should be provided to the PRG within twelve months after the adoption of this report. 14. Slovenia has been assigned a rating for each of the 10 essential elements as well as an overall rating. The ratings for the essential elements are based on the analysis in the text of the report, taking into account the Phase1 determinations and any recommendations made in respect of Slovenia legal and regulatory framework and the effectiveness of its exchange of information in practice. These ratings have been compared with the ratings assigned to other jurisdictions for each of the essential elements to ensure a consistent and comprehensive approach. On this basis, Slovenia has been assigned a rating of Compliant for each essential element. In view of the ratings for each of the essential elements taken in their entirety, the overall rating for Slovenia is Compliant.

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Introduction 11

Introduction

Information and methodology used for the peer review of Slovenia


15. The assessment of the legal and regulatory framework of Slovenia and the practical implementation and effectiveness of this framework was based on the international standards of transparency and exchange of information as described in the Global Forums Terms of Reference, and was prepared using the Methodology for Peer Reviews and Non-Member Reviews. 16. The assessment has been conducted in two stages: Phase1, performed in 2012, assessed Slovenias legal and regulatory framework for the exchange of information, while Phase2, performed in 2013, looked at the practical implementation of that framework, as well as any amendments made to the legal and regulatory framework since the Phase1 review. This assessment is therefore based on the laws, regulations and information exchange mechanisms in force or effect at the end of November 2013, other information, explanations and material provided by Slovenia and information provided by Slovenias treaty partners as well as information collected during an on-site visit to Slovenia that took place in May 2013. During the on-site visit, the assessment team met with officials and representatives of the relevant Slovene government agencies, including the Tax Administration, the registration authorities, the anti-money laundering authorities as well as representatives of notaries, lawyers and accountants. 17. The Terms of Reference (ToR) break down the standards of transparency and exchange of information into 10 essential elements and 31 enumerated aspects under three broad categories: (A)availability of information; (B) access to information; and (C) exchanging information. This review assesses Slovenias 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

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12 Introduction
summary of the findings against the elements is set out at the end of this report. In addition, to reflect the Phase2 component, recommendations are made concerning Slovenias practical application of each of the essential elements and a rating of either: (i)compliant, (ii)largely compliant, (iii)partially compliant, or (iv) non-compliant is assigned to each element. An overall rating is also assigned to reflect Slovenias overall level of compliance with the standards. 18. The Phase1 assessment was conducted by a team which consisted of two expert assessors and two representatives of the Global Forum Secretariat: Mrs. Mnica Sionara Schpallir Calijuri, Head of Larger Taxpayer Unit, Federal Revenue Secretariat of Brazil; Ms. Helen OGrady, Office of the Revenue Commissioners, Ireland; and Ms. Mary OLeary 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. 19. The Phase2 assessment was conducted by a team consisting of two assessors and one representative of the Global Forum Secretariat: Ms Carine Kokar, Senior Advisor in the French International Tax Unit and Ms Mnica Sionara Schpallir Calijuri, Counsellor at Administrative Board of Tax Appeals Ministry of Finance ofBrazil; and Ms Mlanie Robert for the Global Forum Secretariat. The team evaluated the implementation and effectiveness of Slovenias legal and regulatory framework for transparency and exchange of information and its relevant information exchange mechanisms.

Overview of Slovenia
20. 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 20273square kilometres. The population of Slovenia is estimated to be 2.05million1 and the official language spoken is Slovene. In those municipalities where Italian or Hungarian national communities reside, Italian and Hungarian are also official languages. Slovenias capital is Ljubljana with approximately 272000 inhabitants2. 21. Slovenia is one of the states of former Yugoslavia and gained independence on 25June 1991. Slovenias 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
1. 2. August 2012 estimate by the Republic of Slovenia, www.vlada.si/en. See footnote 1.

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Introduction 13

its growth rate in 2012 was 2.3%. Slovenias Gross Domestic Product (GDP) was EUR35.5billion in 2012. Agriculture, forestry, and fishing comprise a comparatively low 2.6% of GDP with other industries comprising 30.6% and services 66.8%. The main other industries include chemicals, electrical engineering, electronics, food processing, metal, motor vehicles, lumber, pharmaceuticals and textiles. Slovenias trading partners tend to be mainly other Eurozone countries, with its main trading partners being Germany, Austria, Italy, France and Croatia.3 22. Outward Foreign Direct Investment (FDI) peaked in 2007 at USD1 802million. However, largely owing to the global economic crisis this has since decreased significantly and by 2012 was USD94million. The level of inward FDI in Slovenia is one of the lowest in the EU per capita and was last reported at USD145million in 2012.4 23. Slovenia has been a member of the European Union (EU) since 1May 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 1January 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).

Legal system
24. The basis for the Slovene system of Government is to be found in its Constitution, which was adopted on 23December 1991. Slovenia is a democratic 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 incompletely bicameral). 25. Slovenia has inherited a civil legal system owing to its once forming part of the Austrian-Hungarian Empire. The Constitution is the states
3. 4. 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. Data drawn from the United Nations Conference on Trade and Development (UNCTAD), available at www.unctadstat.unctad.org.

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14 Introduction
supreme law and all laws passed must be in conformity with the Constitution. All laws passed must also be in conformity with generally accepted principles 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 ratifies 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 except when a special law established a special court in a specific area (for example: labour disputes, administrative matters). 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.

Financial sector
26. 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. 27. As at July 2013, Slovenia had 18 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. As of December 31, 2012 the total assets ofbanksin Slovenia amounted to EUR46billion. 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 measures. The Slovene stock exchange is regulated by the Financial

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Introduction 15

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 July 2013, there were 16 brokerage companies, 11 investment funds management companies and 1 stock exchange market (Ljubljana Stock Exchange) in Slovenia. 28. 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. 29. The core elements of Slovenias 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.

Business registration
30. 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 administered by the Agency of the Republic of Slovenia for Public Legal Records and Related Services (AJPES). The Business Register is 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 permission to set up a small business and registration of workers for social security purposes. Foreign

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16 Introduction
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


31. 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 the accounting 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 indirect taxes. 32. 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, foundations, religious communities, political parties or trade unions. 33. The corporate income tax rate is 17% with a special rate of 0% applying to investment funds, pension funds and insurance companies for pension plans, where certain conditions are fulfilled. 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. 34. 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, royalties, income from capital, and other income accruing to persons liable to tax in Slovenia. Tax on rental income, interest, dividends and capital gains is paid according to a flat income tax rate of 25% 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% (additional rate of 50% for tax years 2013

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Introduction 17

and 2014). Any such advance tax payment is treated as a final tax for a nonresident, whilst for residents it is treated as a prepayment of tax. 35. Slovenia has 58 Double Taxation Conventions (DTCs) and 3 Tax Information Exchange Agreements (TIEAs) in place with its main trading partners. 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
36. A bill (the draft Financial Administration Act) including various tax measures was tabled with the Parliament at the end of 2013 and is at the first reading stage. (The first reading is the presentation of the draft law. The second reading involves the debate and voting on individual articles; it also includes modifications and supplementary provisions. The third reading involves the debate and voting on the draft law in its entirety). One of the modifications proposed by this bill is to require foreign companies with sufficient nexus in Slovenia and foreign partnerships carrying on business in Slovenia or deriving taxable income from Slovenia to disclose the identity of their shareholders and partners in the Tax Register. This bill will also include provision for the merger of the Tax Administration and the Customs Administration. It is planned that the bill will be adopted in the spring 2014.

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Compliance with the Standards: AvailabilitY of Information 19

Compliance with the Standards

A. Availability of Information

Overview
37. 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 jurisdictions competent authority may not be able to obtain and provide it when requested. This section of the report describes and assesses Slovenias legal and regulatory framework on availability of information. It also assesses the implementation and effectiveness of this framework in practice. 38. 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 registered 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, ownership

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20 Compliance with the Standards: AvailabilitY of Information


information on foreign partnerships carrying on business in Slovenia or deriving taxable income is not consistently available. A bill addressing this issue should be tabled in the Parliament soon. Nominee shareholders acting by way of business must identify the person for whom they act as a legal owner under Anti Money Laundering/Counter Financing of Terrorism (AML/ CFT) legislation. 39. 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 concluded that Slovenia has taken reasonable measures to ensure that ownership information is available in respect of trusts. 40. 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. 41. A general obligation to keep accounting records, including underlying documentation, is in place in respect of all relevant entities and arrangements. 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. 42. 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. 43. Enforcement provisions are in place in respect of the relevant obligations to maintain ownership and identity information for all relevant entities and arrangements. 44. Slovenias legal and regulatory framework, as well as its practices, ensures the availability of ownership and identity information, except for ownership information on foreign companies and partnerships with sufficient nexus with Slovenia (see below), banking information and accounting records in all circumstances. Based on its expanding network of agreements Slovenia actively exchanges all types of information in relation to ownership, identity, banking and accounting data for both individuals and legal entities in Slovenia. 25 requests in relation to ownership or identity information were received during the period under review. In all cases this information was available and was provided to the requesting jurisdictions.

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Compliance with the Standards: AvailabilitY of Information 21

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 (ToRA.1.1)
45. 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: Limited liability companies (druba z omejeno odgovornostjo 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 EUR7500. Members are not liable for the liabilities of a limited liability company. As at 30June 2013 there were 64422 limited liability companies registered in Slovenia. Public limited companies (delnika druba d.d.): companies formed by one or more persons that adopt the companys articles of association. The capital is divided into shares and the minimum amount of the capital stock is EUR25000. The shareholders are not liable to creditors for the obligations of the company. As at 30June 2013 there were 841public limited companies registered in Slovenia. Limited partnerships with share capital (komanditna delnika druba 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 30June 2013 there were two limited partnerships with share capital registered in Slovenia.

46. 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 30June 2013, no SEs were registered in Slovenia.

5. See Council Regulation (EC) No.2157/2001 of 8October 2001 on the Statute for a European company (SE). 6. Articles5 and 10 of Council Regulation (EC) No.2157/2001 of 8October 2001 on the Statute for a European company (SE).

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22 Compliance with the Standards: AvailabilitY of Information


47. In addition, the Cooperatives Act provides that co-operative entities 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 co-operative 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 30June 2013 there were 346 co-operative entities registered in Slovenia.

Incorporation and registration of legal entities


48. In Slovenia, legal entities such as companies are generally created by professionals (notaries and lawyers). Financial and real estate transactions are also generally made with the assistance of these professionals. Notaries and lawyers are subject to legal obligations created by AML/CFT legislation (The Prevention of Money Laundering and Terrorism Financing Act), which includes establishing and verifying the customers identity on the basis of authentic, independent and objective sources, determining the beneficial owners and obtaining data on the purpose and intended nature of the business relationship or transaction. 49. Therefore, when creating a new company, notaries and lawyers verify the identity of the shareholders and beneficial owners but also their address and the origin of funds and keep this information for a period of ten years after the end of the relationship or the end of the transaction. 50. Notaries and lawyers are subject to supervision by their respective professional Order with respect to their AML/CFT obligations, pursuant to the Prevention of Money Laundering and Terrorist Financing Act. Section85 of this Act mentions the supervisory authorities competent for exercising supervision of their specific sectors (such as the Bar Association and the Chamber of Notaries). The Chamber of Notaries of Slovenia periodically inspects the work of the 93 offices of Notaries, including their respect of AML/CFT obligations (there were 7 inspections in 2010, 11 in 2011 and 9 in 2012). Inspections are carried out through on-site visits and off-site inspection of documents. The inspection team (comprising two persons) has access to all documents and reviews all aspects of the work of the Notaries, including the identification of clients and the conservation of the files. If a breach is found, a warning is generally issued first. Pecuniary sanctions can be applied and for more severe or repetitive cases, the Notary can also be suspended from the Chamber of Notaries. The results of the inspections from the last three years were very good. No irregularities were founds and no sanctions were applied with respect to their AML/CFT obligations.

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51. The Bar Association of Slovenia comprises approximately 1600 members (around 160 firms). Lawyers are subject to AML/CFT obligations and thus to the CDD rules on their activities in relation to financial transactions, real estate and the creation of legal entities. Therefore, controls have focused on lawyers and firms that were involved in such activities. In 2012, 27 law firms were subjected to inspection by the Bar Association. During the inspection, all documents are verified, either by on-site visit or off-site document inspection. Customer due diligence, including beneficial ownership is systematically verified. Sanctions that can be applied in case of breach vary from a warning to monetary fines and even to a suspension of Bar membership. The Bar Association established that the vast majority of lawyers inspected complied with all obligations. Few breaches were found, the main breaches found were the absence of internal rules and the lack of appropriate AML training for a firm with more than four employees but no sanctions were applied with respect to their AML/CFT obligations as the breaches were not considered important. 52. All business entities in Slovenia which perform profitable or nonprofitable activities (individuals carrying out business activities, sole proprietors, companies, non-profit organisations, societies and public sector entities and branches of foreign entities that operate in Slovenia) need to be registered with the Business Register by filing an application for entry into the register. Companies, foreign companies and partnerships are registered by the Register Court (which is a District Court) in the Court Register (which, since 2008, has been part of the Business Register), while individuals carrying out business activities and sole proprietors are registered by the Agency of the Republic of Slovenia for Public Legal Records and Related Services (referred to as AJPES) solely in the Business Register. 53. A company obtains legal personality upon its entry in the Court Register (s.5(1) CA). An application for registration must be submitted within 15days 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 (registration 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 notarys office. In all other cases the formation of a company is carried out at a notarys office. 54. The application for entry in the register must include certain specified information, including the registered name, registered office, business address and activity of the entity, the amount of share capital and of each

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subscribed contribution, and the identity of shareholders (except for public limited companies and limited partnerships with share capital, see below). The identity of each shareholder must be accompanied with an official Slovene identification number: the personal identification number from the Central Register of Population for individuals resident in Slovenia, and the registration number from the Business Register for Slovene legal entities. The identification of the shareholder is then linked with the database of the appropriate register where the identification information is recorded 55. For individuals or legal entities non-resident in Slovenia, it is first necessary to register with the Tax Register (see below) in order to obtain a tax identification number (TIN) to complete the application for registration; otherwise they cannot complete the registration process and cannot obtain any legal rights over the shares. In order to obtain a TIN, the individual non-resident needs to provide identity information, including name, address, country of residency, date and place of birth, gender, citizenship and reason for obtaining a TIN. Once a TIN is obtained, the non-resident can complete the registration with the Court Register and the TIN will link the identity information from the Tax Register with the Court Register. Legal entities that are non-resident of Slovenia need to provide the articles of incorporation from the countries in which they are incorporated in order to obtain their Slovene TIN and complete the formalities with the Court Register. It would then depend on the law of the jurisdiction where the company is incorporated as to whether the register of the companys articles of association contain ownership information. Therefore the identity information is not always available for foreign companies carrying on a business in Slovenia (see foreign companies below). 56. Each application for entry into the Court Register must be supported by a list of shareholders. The identity of shareholders is verified against the information kept by the Central Population Register (for individuals), the Court/Business Register (for legal entities) and the Tax Register (for non-residents).The AJPES which is in charge of managing the Court Register (as part of Business Register), reviews the information included in the application for entry in the register. For companies, partnerships, economic interest groupings and branches of foreign companies, a decision of the Register Court on the registration of the company is needed. The Register Court decides on whether all information has been provided (including a unique name in Slovene) and whether the object of the entity is in accordance with the law. The entry in the register is completed immediately after a positive decision is rendered by the Register Court. Other entities that are not companies, partnerships, economic interest groupings or branches of foreign companies do not need a decision of the Court to be entered in the Court Register. For these other entities, the entry in the Business Register is approved once the review of the application and the information it contains is satisfactorily performed by the AJPES.

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57. The average time for registration of a company or a partnership (from the submission of the application until the entry in the register) is 2.4days. For entities (for example sole proprietors) that do not require a decision of the Court, registration takes less than a day. Applications are rarely refused, however around 10 % of the applications are incomplete and need additional information in order to be processed. In such cases, the applicant will need to provide the missing information to complete the application; otherwise the application will be rejected. 58. In general, any change in the registered information must be reported for entry in the Court Register within 15days 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). The verification of the information entered into the register is carried out automatically by the registry itself (by the AJPES in charge of managing the Court Register). Investigations, fines for late filing and fines for changes that are not reported in the register are dealt with by the Ministry of Economic Development and Technology. Changes in the identity of the shareholders that are made in other registers (the Central Register of Population and the Tax Register) are automatically reported in the Court Register since the identity information about each shareholder is linked with the register where the information originates. Once the change is made in the original register, there is no need to correct the Court Register, the information is automatically updated. In addition, all information included in the Court Register upon registration is automatically transferred to the Tax Register (see below). Changes made in the Court Register in relation to companies, partnerships, economic interest groupings and branches of foreign companies (except changes that were made in another register linked with the Court Register) must be validated by a decision of the Court. Changes in relation to other entities (for example sole proprietors) do not require a decision of the Court. 59. All business entities need to file an annual report with the AJPES for national statistics purposes, for availability to the public and for tax purposes. The annual report of a business entity must include the annual accounting records and must be filed by the end of March, except for medium and large entities7, for which the filing deadline is eight months after the end of the accounting year since their accounting records must be audited. Medium and large entities represent approximately 3% of entities registered in the Court Register.
7. 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 EUR8800000 (iii) value of assets does not exceed EUR4400000 (s.55 CA).

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60. A legal entity that fails to file its annual report with the AJPES during two consecutive years is referred to the Register Court for a decision for cancellation of its registration for inactivity. Inactive legal entities are struck-off from the Court Register following a decision of the Court. If no tax liability is outstanding then they are automatically deleted from the Tax Register (s.48 TAA). If the business is not carried out by a legal entity (registered solely in the Business Register), the process is done directly by the AJPES. This process is also applicable in cases where the address registered in the Court Register is unknown or obviously incorrect. 61. In such cases, the AJPES notifies the Register Court within two months following the expiry of the time limit for the submission of the annual report of the entity. Cancellation from the Court Register results in the dissolution of the legal entity. In 2009, 5.4% of the annual reports were not filed on time, 5% were not filed on time in 2010, 4.4% in 2011 and 4.5% in 2012. Approximately 99% of the missing reports were filed after a warning or a fine. 62. Additional information from other registers is also available in the Court Register as information about the legal entity is linked between the register where the information originates and the Court Register. Therefore, information on procedural acts and insolvency proceedings (bankruptcy, liquidation) and bank accounts of the entity (over the past five years) are available because this information is linked with the appropriate entity in the Court Register. Information from the register of bills protested due to default and from the register of non-possessory liens and seized movable property is also linked with the entity in the Court Register. 63. At the end of 2012, there were 175000 business entities recorded in the Court Register, of which 66000 were companies. Information from the Court Register is available to the public, online and free of charge including information from the annual report (with some exceptions for confidentiality, such as accounting records of foundations).

Limited liability companies


64. 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;

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(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. 65. The shares of the members can be disposed of only through a contract 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 demonstrated this to the manager of the LLC (s.482(1) CA). 66. 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). Section478(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 subscribed contributions. 67. 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. Failure to register and to register any changes is punishable with a fine of between EUR16000 and EUR62000 on the company and between EUR1000 and EUR4000 on the individual responsible for the failure (s.685(1)(3) and s.685(2) CA).

Public limited companies


68. 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 securities are recorded (s.3 BESA). Section85(2) BESA specifically gives the tax

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authorities the right to obtain a printout of the information about individual holders of securities. 69. 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 accounts, how they are to be administered, a description of the types of entry in the central register, and more details on the system for recording orders for entries in the central register, matching, and making entries (s. 23 BESA). Section28 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). 70. 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 carried out by the Central Securities Clearing Corporation (s.6 of BESA). 71. 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 1July 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 section65 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. 72. It should be noted that public limited companies are also required to register in the Court Register under section3 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.

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Limited partnerships with share capital


73. Limited partnerships with share capital have at least one general partner and one or more shareholders. With respect to the shares and shareholders, the same rules apply as for public limited companies (s.464(3) CA), meaning that identity information on the shareholders will be available in the central register kept by the Central Securities Clearing Corporation. 74. 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 15days of its occurrence (s.48 CA). 75. Identity information for shareholders of public limited companies and limited partnerships with share capital is not available with the Court Register. The information is available with the Central Securities Clearing Corporation, which is the only institution in Slovenia licensed by the Securities Market Agency to perform central securities depository services. The Central Securities Clearing Corporation is supervised by both the Securities Market Agency and the Bank of Slovenia. 76. The Central Securities Clearing Corporation acts as the central registrar (it maintains a registry of holders of dematerialised securities in Slovenia) which records the rights arising from dematerialised securities issued in Slovenia, information on the holders of these rights and third party rights to such securities, including bearer shares (see SectionA.1.2 below). The registration is carried out simultaneously with the settlement and the information is kept directly and permanently by the Central Securities Clearing Corporation. Thus, ownership and identity information about shareholders of public limited companies and limited partnerships with share capital is available in all cases and can be accessed by the Tax Administration upon request.

Tax law
77. 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 separately to the tax authorities.

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78. 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. 79. The Tax Register is managed by the General Tax Office of the Tax Administration. Information from other registers is received on a daily basis and centralised in the Tax Register. Information is received from the Court Register, but also from the Central Population Register, from the Register of Spatial Units, from the Health Insurance Register, from the register of transaction accounts and transaction account holders. Some additional information relevant for tax purposes must be communicated separately to the tax authorities. 80. When a legal entity is created and entered in the Court Register, the information on such entity is automatically transferred to the Tax Register on the same day as the registration process is completed. Thus, when a legal entity is created, it does not need to register with the tax authorities as the information is transferred and the tax authorities are informed of the new entity and they have access to all information in relation to this new entity in order to create or update the tax file. However, new legal entities need to apply for registration for VAT purposes when the conditions for VAT registration are applicable. 81. The Tax Register also includes information on non-resident individuals and non-resident legal entities that need a tax identification number (TIN) in order to acquire shares of companies or other legal entities in Slovenia (in practice, banks in Slovenia require a Slovenian tax identification number for non-resident individuals or non-resident legal entities who want to open a bank account in Slovenia). 82. In order to obtain this TIN, the individual non-resident needs to provide identity information including name, address, country of residency, date and place of birth, gender, citizenship and reason for obtaining a TIN. Identity information for non-resident individuals is verified by the tax authorities before the TIN is granted. Legal entities that are non-resident of Slovenia need to provide the articles of incorporation from the countries in which they are incorporated. It would then depend on the law of the jurisdiction where the company is incorporated as to whether the register of the companys articles of association contain ownership information. Therefore the identity information is not always available for foreign companies carrying on a business in Slovenia (see foreign companies below).

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83. Changes in the information registered with the Court Register, such as changes in ownership information, 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 15days of their occurrence (s.47 TAA). Any failure to notify the tax office of changes within 15days will be subject to a fine of between EUR210 and EUR1200 (s.51(2) TAA). Such changes include a change of the person in charge of the bookkeeping, change of bank accounts, change of foreign branches or offices and changes of related parties. 84. The information in the Tax Register is verified by the Tax Administration annually when controlling the tax returns (the requirements under the tax law in respect of corporate tax returns are the same notwithstanding the applicable rate). Corporate tax returns need to be filed three months after the end of the calendar or financial year. As of 31December 2012, there were more than three million taxpayers entered in the Tax Register in Slovenia. 85. Two types of control are performed to verify the tax returns. First a control of calculation, completeness and logic is performed on all returns when the tax return is submitted, and a second in-depth control may be performed after the processing of the return in the system, based on risk indicators. Some particular elements trigger an in-depth verification of the return, such as tax relief claimed, exemption of dividends and exemption of taxes paid abroad. This second verification is made either by the General Tax Office or by the Local Tax Office, is desk based and is carried out with the help of other documents like tax returns from previous years and accounting records. If the situation needs to be further investigated, a proposal is given to carry out a tax audit. The annual report (that includes the accounting records) submitted to the AJPES is considered as part of the income tax return. 86. When a taxpayer fails to submit a corporate tax return within the time limit, the tax authorities invite the taxpayer, by letter or by phone, to submit the return within eight days for corporate tax returns (five days for individual tax return). If the return is not filed after this reminder, a fine for late filing is applied. For the period from 1July 2009 to 31December 2011 (information for the period 1January to 30June 2012 is not available), there were 1730 offences for failure to file a tax return on time and fines were applied amounting to a total of EUR1768500. For the same period, there were 171 offences for incorrect or incomplete information in tax returns, amounting to a total of EUR36800 of fines. The Slovene tax authorities indicated that generally, the level of compliance is satisfactory, while noting some delays that were solved rapidly when a reminder was issued.

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Ownership information held by service providers


87. Section4(1)(16)(l ) of the Prevention of Money Laundering and Terrorist Financing Act (PMLTFA) includes persons who provide company 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 obligations under the PMLTFA. Consequently, company service providers are required to carry out CDD when establishing a business relationship by establishing and verifying the identity of their customer and the beneficial owner (ss.7 and 8 PMLTFA). 88. 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 concerning financing and business operations (s.19(1) PMLTFA). 89. Establishing and verifying the identity of a company and its beneficial owners must be done by inspecting the original or certified documentation 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 companys 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. 90. Service providers 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). 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 EUR120000, depending on the seriousness of the offence (ss.91-93 PMLTFA). 91. Pursuant to the PMLTFA, service providers are required to carry out measures for preventing and detecting money laundering, including applying CDD rules, but also appointing compliance officers (if more than four professionals in the firm), adopting internal regulation on internal standards and providing professional training on money laundering to all relevant

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employees. Service providers are under the direct supervision of the Office for Money Laundering Prevention, which is also the Financial Intelligence Unit of Slovenia. As the supervisory body, the Office for Money Laundering Prevention conducts off-site inspections and supervises the application and respect of AML/CFT obligations. 92. To conduct the inspection, the Office for Money Laundering Prevention is staffed with 17 employees who can requests any data, information and documents, which must be provided by the service providers within 15days. The inspection is carried out by gathering and verifying the data obtained. During an inspection, the focus is generally on the respect of CDD rules, internal controls and procedures in place, the compliance officer and the training of staff. 93. If a violation of the obligations is detected, the Office for Money Laundering Prevention can apply administrative sanctions to both the reporting entity and the natural person responsible for the violation. Sanctions range from a simple demand to remove the violation, to a request for the implementation of appropriate internal controls, and even to the request for initiation of administrative proceedings (which can lead to a fine up to EUR120000 for a legal person). It is also possible to give a simple warning, but only when the administrative offence is insignificant and if according to the person in charge of the investigation, the warning was a sufficient measure. The Office for Money Laundering and Prevention monitors the situation following the application of sanctions to ensure that the situation is corrected. For the period July 2010 June 2012 no fines were applied, only warnings were issued. There was 29 warnings issued by the Office for Money Laundering Prevention and, generally, the situation was corrected rapidly after the issuance of the warning. Criminal sanctions are also possible under the Criminal Code (sections109 and 245).

Foreign companies
94. 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 accompanied 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 register of the companys articles of association contain ownership information.

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95. 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. 96. All persons that are the subject of registration in the Court Register, including foreign companies establishing a branch in Slovenia as well as foreign 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. Section41(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 registration form for ownership information and take that information directly (ex officio) from the Court Register under section45(1) TAA. As the Court Register does not contain ownership information on foreign companies, the Tax Register does not contain this information. 97. 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 30June 2013 there were two foreign companies that have their place of effective management in Slovenia. No EOI requests in relation to foreign companies were received in Slovenia during the period under review.

Nominees
98. 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 section3(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 sections7-17 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 EUR120000, depending on the seriousness of the offence (ss.91-93 PMLTFA).

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99. A specific rule exists in respect of authorised brokerage companies8. When they manage the shares of their clients through their own account, they must keep the following information on their clients: personal name, TIN, permanent or temporary address of a natural person or registered office and registered name of a legal entity (s.247 Financial Instruments Market Act). 100. In addition, section40(1) BESA provides for the registration of certain 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 partnerships 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). 101. 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 primarily consist of persons performing services for free or in the course of a purely private non-business relationship, it is likely to be limited. 102. Nominee ownership is regulated by the AML/CFT legal framework in Slovenia and therefore the practices described above also apply in respect of nominee ownership. During the on-site visit Slovene authorities and professionals confirmed the extremely narrow scope of nominee ownership. They reported that non-professional nominees are not likely to exist in Slovenia. No issues were reported with regard to nominee ownership information. Slovenias tax authorities also advised that they have never received any incoming request dealing with nominees but are ready to use their information gathering powers to collect such information if so requested by a treaty partner.

Conclusion
103. 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 companies and limited partnerships with share capital full ownership information
8. 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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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 provided 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. 104. During the period under review, Slovenia received 25 EOI requests in relation to ownership information (all in relation to companies). The information was available and exchanged in all cases. Given the registration requirements for companies in Slovenia, the practice of the Slovene tax authorities and the comments received from Slovenias treaty partners, it can be concluded that the availability of ownership information pertaining to companies is in line with the standard set out in the Terms of Reference, with the exception of ownership information on foreign companies with sufficient nexus to Slovenia.

Bearer shares (ToRA.1.2)


105. Section175(1) CA provides that the shares of a public limited company 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). 106. 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 registered 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. 107. Ownership information on the shareholders of public limited companies and limited partnerships with share capital is available in the central register kept by the Central Securities Clearing Corporation (see also sectionA.1.1 Public limited companies and Limited Partnerships with share capital ). The central register contains a designation of the share as a registered or bearer share (s.4(1)(3) BESA). As at 31December 2012, 27 companies and no partnerships 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 information on the owners of bearer shares. 108. Owners of bearer shares can enforce their rights (voting rights, entitlement 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

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information on his/her identity is available in the central register and may be obtained by the authorities if necessary (see also PartB of this report). 109. 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 1July 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 converting issued shares into book-entry shares is described in section68 BESA, which prescribes that the company must make a conversion decision and publish this decision within 15days 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 30days or longer than 90days (s.68(3) BESA). On the day of publication of the conversion decision in the daily newspapers, 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 1July 2007 that have not been converted into book-entry shares, are now void, as the conversion right ended 90days after that date at the latest. 110. All bearer shares issued in Slovenia are dematerialised securities and information on the holders is therefore registered with the Central Securities Clearing Corporation in the same way as for other shares of public limited companies and limited partnerships with share capital, as explained above. As of 31December 2012, 27 companies had issued bearer shares in Slovenia (26 shares and 2 bonds). Slovenias tax authorities have access to all information on the holders upon request (name, address, and all securities the person holds). Hence, ownership information on bearer shares is available in Slovenia in all instances. During the period under review, no EOI requests in relation to bearer shares were received by Slovenia.

Partnerships (ToRA.1.3)
111. 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 partnerships can be distinguished: General partnership (druba z neomejeno odgovornostjo d.n.o.): 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 30June 2013 there were 1222general partnerships registered in Slovenia.

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Limited partnership (komanditna druba k.d.): formed by two or 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 30June 2013 there were 606 limited partnerships registered in Slovenia.

112. The CA was amended in July 2012 and the concept of Silent partnership was abolished. 113. Finally, an economic interest grouping (EIG, in Slovene: gospodarsko interesno zdruenje) can be founded by at least two companies or entrepreneurs. 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 considered 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 the EU, it is also possible to establish an EEIG (European Economic Interest Grouping).9 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 30June 2013 there were 162 EIGs and 3 EEIGs registered in Slovenia. 114. 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 number10 of each partner or member; (e) in case of a limited partner, the amount of the contribution to the capital of the partnership; and
9. See Council Regulation (EC) No.2137/85 of 25July 1985 on the European Economic Interest Grouping. 10. 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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(f) the date of the partnership contract or EIG/EEIG founding contract and its duration if it is established for a fixed period. 115. In respect of partnerships, any change in the registered information must be reported for entry in the Court Register within 15days of its occurrence (s.48 CA). Failure to register and to register any changes is punishable with a fine of between EUR16000 and EUR62000 on the partnership and between EUR1000 and EUR4000 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 15days (ss.6 and 53(1) CRA). Failure to register and to register any changes may lead to a fine of EUR1600 on the EIG/EEIG and a fine of EUR600 on the individual responsible for the failure (s.53 CRA). 116. In Slovenia, partnerships and EIGs/EEIGs are legal entities subject to the same registration obligations as those described above for companies. In order to obtain legal personality, they have to register with the Court Register by submitting an application for registration within 15days of the fulfilment of the conditions for entry in the register, i.e.when all other (legal) formalities for setting up have been completed. 117. Ownership information must be provided upon registration, including an official identification number: the personal identification number from the Central Register of Population for individuals resident in Slovenia, and the registration number from the Business Register for Slovene legal entities. The identification of the shareholder is linked with the database of the appropriate register where the identification information is recorded. For individuals or legal entities non-resident in Slovenia, they first need to register with the Tax Register in order to obtain a tax number to complete the application for registration. 118. The information provided upon registration is verified by the AJPES and a decision of the Register Court is needed for Partnerships and EIGs/ EEIGs. All changes made in the Court Register concerning a partnership or EIGs/EEIGs must be validated by the Court. Changes made to other registers connected to the Court Register do not need this Court decision and such changes to other registers are automatically transferred to the Court Register.

Tax law
119. 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. 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 information relevant for tax purposes must be communicated separately to the tax authorities. The list of information that should be included in the Tax Register

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includes the members of a legal entity (s.41(2)(11) TAA). In respect of partnerships 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). 120. 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). 121. As taxable legal entities in Slovenia, partnerships and EIGs/EEIGs are required to file a tax return on an annual basis and the annual report (that includes accounting records) submitted to the AJPES is considered as part of the income tax return. Therefore tax returns filed by partnerships and EIGs/ EEIGs are subject to the same controls as those mentioned above for companies. Follow up and sanctions for late filing or for incomplete tax returns are exactly the same as explained above for companies.

Foreign partnerships
122. 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 requirement 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. 123. If a foreign partnership carries on business in Slovenia or derives taxable 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
124. 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 15days. 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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125. Registration requirements for partnerships and EIG/EEIGs are exactly the same as registration requirements for companies described under SectionA.1.1., as confirmed by Slovenias authorities. The practical application of the legal requirements is effective. The practical standards that are enforced by the registration and tax authorities are such that ownership and identity information in respect of partnerships and EIG/EEIGs is available, is verified and easily retrievable, and hence, is in line with the standard set out in the Terms of Reference (except for foreign partnerships carrying on a business in Slovenia or deriving taxable income in Slovenia). There are no foreign partnerships carrying on a business in Slovenia or deriving taxable income in Slovenia and no EOI requests in relation to partnerships were received during the period under review.

Trusts (ToRA.1.4)
126. 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


127. Section4(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 relationship by establishing and verifying the identify of their customer and the beneficial owner (ss.7 and 8 PMLTFA). 128. 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 beneficiaries 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.

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129. 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 trusts authorised representative or authorised person, which might be the settlor(s) or a trustee. However, no clear obligation exists under the PMLTFA for trustees or trust administrators to identify persons other than the beneficiaries of more than 25% of the trust property. 130. Service providers 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). 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 EUR120000, depending on the seriousness of the offence (ss.91-93 PMLTFA).

Tax law
131. 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 subject 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 administrators 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 addition, 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
132. 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 attribute the income of a foreign trust to the resident trustee or trust administrator, unless that person can prove otherwise. The

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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. 133. The AML/CFT rules that apply to service providers also apply to trustees acting in a business capacity. Therefore they are subject to CDD rules, they are supervised directly by the Office for Money Laundering Prevention and subject to the inspection process of the Office for Money Laundering Prevention as described above for service providers. 134. However, the Slovene authorities have reported that trustees and trusts are not known to exist in Slovenia. During the period under review (July 2009 to June 2012), Slovenia did not receive any EOI requests relating to trusts, and therefore has no experience in this regard. Professionals in Slovenia are not known to have any experience in dealing with trusts. Similarly, non-professional trustees are not known in Slovenia. The Slovene tax authorities stand ready to answer any incoming requests received in relation to these arrangements.

Foundations (ToRA.1.5)
135. 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 beneficial if the foundation has been established for purposes in the fields of science, culture, sport, education and training, health care, child and disabled 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 foundation 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). 136. 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

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changes in the details registered must be notified within 30days (s.17a FA). Failure to notify can result in a fine of EUR625.94 on the foundation and a fine of EUR208.65 on the responsible person (s.35a FA). Updated information 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 30June 2013, there were 261 foundations in Slovenia. 137. In Slovenia, foundations must be created by a notary, who is subject to AML/CFT obligations, including CDD rules. Upon creation, the notary verifies all the information such as the identity of the founders, and the origin of the funding capital. Then the foundation needs to receive approval from the Ministry whose operating range covers the purpose of the foundation in order to obtain legal personality. 138. To approve a new foundation, the relevant Ministry verifies whether all the conditions are met (for instance, if the purpose is in line with the law, the purpose is beneficial or charitable), the origin of the founding capital and whether the founding capital is sufficient for the purpose of the foundation and has been provided. Once the new foundation is approved, the consent is sent to the Ministry of the Interior and the foundation can be registered in the Register of Foundations (which is public). 139. The notary submits the notarial record to the relevant Ministry to obtain approval of the deed of establishment (within 15days of the creation of the deed at the latest), including: (i)the name and the seat or residence of the founder, (ii)the name or the seat of the foundation, (iii) the statement of the founding capital and its value, (iv)the purpose of the foundation, (v)the manner and the procedure of the appointing of the members of the board of trustees, (vi) the members of the first board of trustees The foundation provides information of the persons authorised for representation purposes (personal name, identification number or date of birth and sex, nationality and permanent address or temporary address, if they have no permanent residence in Slovenia) directly to the Ministry of the Interior, which records the foundation, ex-officio, in the Register of Foundations after the Deed of Establishment is approved. Under the Foundations Act, the approval of the deed of establishment is issued by the relevant Ministry within 30days of receipt of the deed of establishment. 140. After the approval is issued the foundation receives its legal personality. All data are filed in the Register of Foundations after the approval from the relevant Ministry is issued and submitted to the Ministry of the Interior. Before the foundation is recorded in the Register of Foundations, the identification number is automatically assigned. The Register of Foundations is connected to other databases/registers administered by the Ministry of the

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Interior such as Central Population Register and other personal registers as well as to the Register of Spatial Units, operated by the Surveying and Mapping Authority of the Republic of Slovenia, which is very useful in relation to the availability of data concerning authorised persons representing the foundation, seat and address of the foundation and all the data are updated. The data from the Register of Foundations are automatically transmitted to the Business Register operated by AJPES. The personal data from the Business Register are also connected to other registers containing personal data to keep them accurate (Central Population Register, Court Register, Tax Register). 141. Changes in the information in the Register of Foundations must be notified within 30days. Some specific information, such as the name of the foundation, seat, purpose of the foundation or a decrease in the founding capital, must receive approval from the relevant Ministry before being effective and reflected in the Register of Foundations. 142. Every foundation must file an annual report to its relevant Ministry on its work and financial operations, which includes accounting information. The report is verified by the relevant Ministry who can request additional information from the foundation. If a problem is detected, the relevant Ministry can launch an audit, apply fines for violation of the obligations (for instance if the purpose of the foundation is not respected or a change has not been reported) or even dismiss the directors. For the period under review, all changes and reports were filed on time or after a reminder (no statistics exist on reminders sent), therefore no enforcement measures have been taken. 143. Given Slovenias legal requirements and practices in relation to foundations, identity information is available. The Slovene tax authorities have not reported any specific concerns as regards the availability of identity information in relation to foundations for the period under review. During the period under review, no EOI requests in relation to foundations were received by Slovenia.

Enforcement provisions to ensure availability of information (ToRA.1.6)


144. Jurisdictions should have in place effective enforcement provisions to ensure the availability of ownership and identity information, one possibility 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 sectionA.1 are enforceable and failures are punishable. Questions linked to access are dealt with in PartB.

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145. 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 15days. In respect of limited liability companies and general and limited partnerships failure to register and to register any changes is punishable with a fine of between EUR16000 and EUR62000 on the company or partnership and between EUR1000 and EUR4000 on the individual responsible for the failure (s.685 CA). In respect of EIGs/EEIGs, failure to register and to register any changes may lead to a fine of EUR1600 on the EIG/EEIG and a fine of EUR600 on the individual responsible for the failure (s.53 CRA). 146. Information reported in the Court Register is verified upon the submission of the application for entry in the register and on an annual basis, when the legal entity files its annual report with the AJPES. When the application for entry in the register is filed, the AJPES reviews the information and does not process applications that are incomplete. Applications are rarely refused, however around 10 % of the applications are incomplete and need additional information in order to be processed. In such cases, the applicant will need to provide the required information to complete the application; otherwise the application will be rejected. 147. For 2009, 5.4% of the annual reports were not filed on time, 5% of the annual reports for 2010 were not filed on time, 4.4% in 2011 and 4.5% in 2012. Approximately 99% of the missing reports were filed after a warning or a fine. 148. For the period under review, there were 7 cases of failure to report a change in the Court Register, in one case a warning was issued and a sanction was applied in the six other cases. 149. 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 capital. 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 penalties apply for failing to keep a share register. Supervision of the CSCC is the responsibility of the Securities Market Agency (s.437 of the Financial Instrument Market Act), 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). The Securities Market Agency conducted 13 inspections in the period 2002-11 but no violations were found.

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150. 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 EUR3000 and EUR30000 on a legal entity, between EUR200 and EUR1000 on the individual responsible within the legal entity and between EUR1000 and EUR10000 on a sole proprietor or self-employed person. Serious offences (s.92 PMLTFA): between EUR6000 and EUR60000 on a legal entity, between EUR400 and EUR2000 on the individual responsible within the legal entity and between EUR2000 and EUR20000 on a sole proprietor or self-employed person. Most serious offences (s.91 PMLTFA): between EUR12000 and EUR120000 on a legal entity, between EUR800 and EUR4000 on the individual responsible within the legal entity and between EUR4000 and EUR40000 on a sole proprietor or self-employed person.

151. 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). The Office for Money Laundering and Prevention is not able to provide any statistics on measures and sanctions applied to trusts since the concept of trust is not recognised in Slovenia (except under AML legislation) and the authority is not aware of any trust in Slovenia. For other professionals under the direct supervision of the Office for Money Laundering and Prevention (such as tax advisors and service providers), no fines were applied and 29 warnings were issued during the period July 2010-June 2012. 152. Any person resident in Slovenia, including a person acting as a trustee 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 EUR800 and EUR10 000 on a sole proprietor or self-employed individual, a fine ranging between EUR1200 and EUR15 000 on a legal person and a fine ranging between EUR3 200 and EUR30000 on a medium or large company (s.397 (10) TPA. 153. Given that the concept of trust is not recognised in Slovenia (other than under AML law) and given that the Slovene authorities indicated that they were not aware of any trust existing in Slovenia, no enforcement measures were taken with regard to trustees and trusts. With regard to the application of the legal requirement to keep records relevant to the tax liability in Slovenia applicable to other persons (ss. 31, 39 and 41 of the Tax Procedure Act), 211 penalties were applied (for a total of EUR162000 and 10 reminders) for both individuals and legal entities, during the period under review.

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154. 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 foundations is entered in the register. Any changes in the details registered must be notified within 30days. Failure to notify can result in a fine of EUR625.94 on the foundation and a fine of EUR208.65 on the responsible person (s.35a FA). For the period under review (July 2009-June 2012), 115 requests for a change in the Register of Foundations were received, of which 28 were in relation to a change of administrators, 17 for a change of address and the rest for miscellaneous changes. In addition, foundations are obliged to submit to the competent Ministry, on an annual basis (by the end of March), a report on their work and financial operations. For the period under review, all changes and report were filed on time or after a reminder (no statistics exist on reminders), therefore no enforcement measures were taken. 155. 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 information with the tax authorities. 156. When a taxpayer fails to submit a corporate tax return within the time limit, the tax authorities invite the taxpayer, by letter or by phone, to submit the return within eight days for corporate tax returns (five days for individual tax returns). If the return is not filed after this reminder, a fine for late filing is applied. For the period from 1July 2009 to 31December 2011 (information for the period 1January to 30June 2012 is not available), there were 1730 offences for failure to file a tax return on time and fines were applied amounting to a total of EUR1768500. For the same period, there were 171 offences for incorrect or incomplete information in tax returns, amounting to a total of EUR36800 in fines. The Slovene tax authorities indicated that generally, the level of compliance is satisfactory, while noting some delays that were solved rapidly when a reminder was issued.

Conclusion
157. Enforcement provisions are in place in respect of the relevant obligations 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 keeping 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.

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There is a variety of possible sanctions provided by Slovenias laws depending of the level of the infraction. Each requirement to maintain ownership information is complemented by sanctions. Slovenias authorities have confirmed that the application of sanctions, when necessary, has a deterrent effect and rarely needs to be repeated. The enforcement provisions to ensure the availability of ownership information appear to be dissuasive enough to ensure the legal requirements are respected.
Determination and factors underlying recommendations
Phase1 determination The element is in place. Factors underlying recommendations Ownership information on foreign companies having sufficient nexus with Slovenia (in particular, having their place of effective management in Slovenia) and on foreign partnerships carrying on business in Slovenia or deriving taxable income is not consistently available. Recommendations Slovenia should ensure that ownership information on foreign companies with sufficient nexus with Slovenia (in particular, having their place of effective management in Slovenia) and on foreign partnerships carrying on business in Slovenia or deriving taxable income is available in all cases.

Phase2 rating Compliant

A.2. Accounting records


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

158. The Terms of Reference sets out the standards for the maintenance of reliable accounting records and the necessary accounting record retention period. It provides that reliable accounting records should be kept for all relevant entities and arrangements. To be reliable, accounting records should: (i)correctly explain all transactions; (ii)enable the financial position of the entity or arrangement to be determined with reasonable accuracy at any time; and (iii)allow financial statements to be prepared. Accounting records should further include underlying documentation, such as invoices, contracts, etc. Accounting records need to be kept for a minimum of five years.

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General requirements (ToRA.2.1)


159. 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 presentation 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 company11 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 companys operations and financial position (s.60(1) CA). 160. 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 sections63 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. 161. 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 publication to the 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 publication (s.58(2) CA). Failure to submit the annual report to AJPES can result in a fine ranging from EUR6000 to EUR40000 on the company and a fine ranging from EUR300 to EUR4000 on the individual responsible for the failure (s.686(1) (2) CA). 162. The rules on keeping books of account and records pertaining to domestic companies apply mutatis mutandis to foreign undertakings conducting business in Slovenia, whether they are tax resident in Slovenia or not (s.680(2) CA). 163. 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
11. 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 EUR8800000 (iii) value of assets does not exceed EUR4400000 (s.55 CA).

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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 statement (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). 164. 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
165. 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, co-operative entities and foundations are covered by the AA, as they are legal entities in Slovenia. Under section55 of the Accounting Act penalties for non-compliance can be imposed on a legal entity in the event of the following: a failure to keep books of accounts according to double-entry accounting method; for financial statements that fail to give a true representation of assets and liabilities, revenues, expenses and profit or loss; a failure to keep accounting documents and books of accounts; a failure to value items in financial statements in accordance with accounting standards.

166. These failures can result in a fine of between EUR417.29 and EUR25037.56. In addition, a fine of between EUR41.73 and EUR2 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 section30 FA. A foundation that does not keep books of account in accordance with the law is subject to a fine ranging from EUR834.59 to EUR16691.70 (s.35 FA). The individual responsible for the offence may be imposed with a fine between EUR208.65 and EUR1043.23 (s.35 FA).

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Tax law obligations


167. 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 persons taxes to be assessed and paid (s.31(1) TPA). As companies, partnerships, EIGs/EEIGs, co-operative entities and foundations are required to keep accounting records under the Companies Act and the Accounting Act respectively, 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 section3(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). Section357 TPA further specifies that the following 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 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. 168. 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 information 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 section357 TPA. This information is automatically forwarded by AJPES to the tax authorities (s.59(4) CA). 169. 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

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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). 170. If companies, partnerships, EIGs/EEIGs, co-operative entities, foundations or natural persons 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 sections31 and 41 TPA would therefore also cover the accounting records of a foreign trust with a trustee resident in Slovenia.

AML/CFT legislation
171. Under sections7 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 EUR120000, depending on the seriousness of the offence (ss.91-93 PMLTFA). 172. In practice, in Slovenia, financial statements are filed with the AJPES by all business entities (including companies, foreign companies, partnerships, foreign partnerships, EIG/EEIGs individuals carrying on a business) with their annual report. Financial statements for banks must also be filed with the Bank of Slovenia where they are verified. Foundations must file their financial statements both with the AJPES and with their annual report to the relevant Ministry. 173. The annual report of a business entity needs to be filed with the AJPES at the end of March, except for medium and large entities, for which the filing deadline is eight months after the end of the year since their accounting records must be audited. Foundations must also file their annual report no later than 28February. 174. If an annual report is not filed in due time, a warning is issued first, giving an additional five days to file the annual report. If the report is not filed after the warning, then a fine is applied. For 2009, 5.4% of the annual reports were not filed on time, 5% of the annual report for 2010 were not filed on time, 4.4% in 2011 and 4.5% in 2012. Approximately 99% of the missing reports were filed after a warning or a fine.

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175. Once the annual report is filed, the information is processed by AJPES and automatically transferred to the Tax Administration (for foundations at the end of March, for companies and partnerships at the end of April, for audited annual reports at the end of October and also within five days upon the request of the Tax Administration), including the accounting records, which are part of the report. The annual report filed with the AJPES is considered as a part of the Tax Return by the Slovene tax authorities. 176. If a business entity has not filed its accounting records with the AJPES, it can file them directly with the tax authorities while filing its tax return. In cases where the accounting records are not filed at all (neither with the AJPES nor with the tax return), the tax return is considered incomplete and if the information is not provided after a reminder, a fine for incomplete tax return is applied, in addition to the fine for incomplete annual report. 177. For the period 1July 2009 to 31December 2011 (information is not available for the period 1January to 30June 2012), there were 1730cases of tax returns not filed on time for which there were total fines of EUR1768500, and 171 cases of incomplete tax returns for which there were total fines of EUR36800. 178. Considering the corporate, accounting, tax and AML/CFT legislation in Slovenia, as well as the practices of Slovenias authorities and comments received from Slovenias treaty partners, it may be concluded that accounting data is available in accordance with the standard. During the period under review (1July 2009 to 30June 2012), Slovenia received 38 EOI requests in relation to accounting information. The information was available and exchanged in all cases.

Underlying documentation (ToRA.2.2)


179. 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 (paragraph21 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

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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. 180. In addition, section54(6) CA states that companies and partnerships 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 business report. A similar distinction is made in section30 AA that applies to EIGs/EEIGs, co-operative 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. 181. 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). 182. The requirements in the SAS, section54(6) CA and section30 AA (together applying to companies, partnerships, EIGs/EEIGs, co-operative 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 Phase1 assessment found that the requirements were worded in a general way and did not go into detail regarding the type of underlying documentation to be kept. The Phase1 assessment concluded that this could result in an uneven application of the obligation to keep underlying documentation. It was therefore recommended that Slovenia clarifies the legal requirements to keep all underlying documentation in respect of all relevant entities and arrangements. 183. However, Slovene authorities have confirmed that the requirements to provide details regarding the type of underlying documents to be kept were clearly expressed in section21 SAS and suggest that this conclusion was reached only because this piece of legislation was not available to the assessment team during the Phase1 assessment. Slovenia realised during the PRG meeting that this section would have been important to avoid the recommendation but decided that it was too late to open this issue at that stage. 184. After the review of section21 SAS that was provided by the Slovene authorities during the Phase2 evaluation, it is concluded that the obligation to keep underlying documentation is clear enough and the type of information to be kept is detailed. The Phase1 recommendation is therefore removed.

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185. For the period under review, the Slovene authorities received 38 EOI requests which required, amongst other things, underlying documentation. In all cases the information was available and was exchanged.

5-year retention standard (ToRA.2.3)


186. Companies, co-operative 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. 187. Under the Accounting Act, EIGs/EEIGs 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 two, three or five years, depending on the type of document (s.30 AA). 188. Notwithstanding the above outlined retention obligations under the Companies and Accounting Act, pursuant to the TPA companies, partnerships, EIGs/EEIGs, co-operative 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 EUR800 to EUR30000, 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). For the period from 1July 2009 to 31December 2012 (the information is not available for the period 1January to 30June 2012), there were 148 cases of failure to keep or store books of accounts and records pursuant to the tax legislation. Total fines of EUR48000 were applied. 189. Considering the retention period provided for by legal requirements, considering that Slovenias authorities have demonstrated that they are in a position to effectively supervise the obligation to maintain accounting records and underlying documentation for the five year period prescribed by the standard, and considering the comments received from Slovenias treaty partners, it may be concluded that the time period during which accounting

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records must be kept by Slovene entities and the practices of the authorities are fully consistent with the Terms of Reference.

Conclusions
190. Companies (including foreign companies), and partnerships and co-operative entities are required to keep accounting records under both the Companies Act and tax law. EIGs/EEIGs 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 trusts income. 191. Obligations exist for all entities and arrangements to keep underlying documentation, under the Companies Act, the Accounting Act and the SAS. In addition, 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
Phase1 determination The element is in place. Phase2 rating Compliant

A.3. Banking information


Banking information should be available for all account-holders.

192. 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 July 2013, there were 18 banks, 3 savings banks and 3 branches of foreign banks active in Slovenia. 193. 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 customers identity (s.35 PMLTFA).

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Record-keeping requirements (ToRA.3.1)


194. 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 specifically 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


195. Section4(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 establishing a business relationship, such as opening a bank account (ss.7 and 8 PMLTFA). 196. 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 registration 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. 197. 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 EUR120000, depending on the seriousness of the offence (ss.91-93 PMLTFA).

Payment Services and Systems Act


198. According to section143 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 transaction 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 on a daily basis (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 proprietor 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. 199. The register of transaction accounts is publicly available, although not all information is accessible to the public because of rules regarding privacy (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. 200. In Slovenia, banks are subject to AML/CFT obligations, including CDD measures such as the identification and verification of a customers identity, determining the ultimate beneficial owner, obtaining data on the purpose and intended nature of the business relationship and regular ongoing monitoring. CDD measures are required when a business relationship is established with a customer, when a transaction amounting to EUR15000 or more is carried out (in a single operation or in several operations that are linked), when there are doubts about the veracity and adequacy of previously obtained data about the customer or the beneficial owner, and whenever there is a suspicion of money laundering or terrorist financing, regardless of the amount. 201. Banks as well as Slovenian branches of banks from other jurisdictions are authorised to directly perform banking services in Slovenia and are supervised by the Bank of Slovenia which, besides prudential supervision, also supervises banks compliance with AML/CFT obligations. The Bank

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of Slovenia is also the supervisory body of other financial institutions such as payments institutions (there are three payments institutions in Slovenia), e-money institutions (0 in Slovenia) and exchange offices (26 in Slovenia). 202. In order to supervise banks compliance with AML/CFT obligations, the Bank of Slovenia conducts different types of inspections: regular (planned), follow-up (planned), extraordinary (unplanned) and thematic (planned). Two members of the supervisory team are specifically dedicated to AML/CFT issues. 203. The plan of supervision takes a risk-based approach. Each institution has to complete an AML/CFT questionnaire which is used as a basis to define the banks risk profile as regards AML/CFT. Institutions with higher risk exposure to Money Laundering or Terrorist Financing are supervised more frequently and in more detail. Extraordinary inspections can also be performed to address a specific AML/CFT issue in a bank. 204. All AML/CFT inspections are done on-site, the team in charge of the on-site visit can request all information and documents from the bank. Most of AML/CFT inspections are full scope and include the assessment of internal controls and the sample of customer files. The sample of customer files is used to check how the bank ensures CDD measures are applied, including on-going monitoring. Interviews with staff and with the compliance officer are also performed during the on-site inspection. 205. Some inspections (as indicated above) are based on a specific theme (thematic inspections) and are performed on several banks at the same time. The last thematic inspection was carried out in 2010 in order to verify the process of closing down of the saving passbooks (numbered accounts) as required by law (following a Moneyval12 request). 206. If a deficiency is detected during an on-site inspection, the supervisory team meets with the AML compliance officer, internal audit and the Board of Directors in order to inform them about findings and deficiencies and to obtain adequate explanation from the bank. Then, a report is sent to the bank with the findings, including measures imposed in case of deficiencies. The Bank of Slovenia also defines the time limit within which the deficiencies have to be removed. A follow up inspection is always carried out in order to check whether the situation has been corrected. The follow up inspection is normally limited to the deficiencies previously identified. 207. Sanctions are also applied when deficiencies are noted during an on-site inspection. In general the Bank of Slovenia has power to issue two types of measures. According to the Banking Act, the Bank of Slovenia
12. The Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism of the Council of Europe.

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imposes measures such as recommendations, warnings, orders to eliminate the deficiency, orders with additional measures. The purpose of such measures is to improve risk management systems within the bank. In the case of serious deficiencies the Bank of Slovenia can appoint a special administration to the bank, withdraw the licence or liquidate the institution but these types of measures have not yet been used for the purpose of AML/CFT. In most cases of AML/CFT deficiencies, warnings and different types of orders have been imposed. Under the PMLTFA the Bank of Slovenia has also the power to issue administrative sanctions (fines) on the responsible person. Recommendations can be made, but this is not the usual practice in relation to AML/CFT matters. 208. Statistics provided by the Bank of Slovenia show that one regular inspection was carried out by the Bank of Slovenia during the second half of 2009, five regular, one follow up, two extraordinary and one thematic inspections were carried out in 2010, three regular and six follow up inspections were carried out in 2011 and one regular and five follow up inspections were carried out in the first half of 2012. The two extraordinary inspections carried out in 2010 referred to specific customers. In one case an inspection was provided on the basis of information received from the Slovene Financial Intelligence Unit. 209. With regard to sanctions (which are in relation to identified deficiencies with regard to ultimate beneficial owners), one warning was issued in the second half of 2009, five warnings were issued in 2010, three orders to eliminate violations were issued in 2011 and one in the first half of 2012. While the Bank of Slovenia has power to issue other administrative sanctions (fines), these have not been required in practice. 210. The Bank of Slovenia indicated that banking supervision is the most important part of its work. It also mentioned that the situation in banks with regard to the respect of AML/CFT obligations was improving and banks were rapidly correcting the situation when deficiencies were identified. The relationship between banks and the Bank of Slovenia is good. Close co-operation between supervisor and the banking industry is ensured via an/the AML committee established within the Banking Association. The Banking Association and AML committee organise activates such as: training for banks, workshops on different issues, annual conference of AML compliance officers.

Conclusion
211. 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. Slovenias AML/CFT

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legislation, as well as its implementation in practice by financial institutions, and the supervision performed by the Bank of Slovenia ensures that banking information pertaining to any account holders is maintained by financial institutions. 212. For the period under review, Slovenia received five EOI requests for banking information, in all cases the information was available and was exchanged. It is concluded that banking information is available in Slovenia in all cases, in accordance with the standard and as confirmed by comments received from Slovenias treaty partners.
Determination and factors underlying recommendations
Phase1 determination The element is in place. Phase2 rating Compliant

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B. Access to Information

Overview
213. A variety of information may be needed in respect of the administration 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 Slovenias legal and regulatory framework, and its implementation in practice, 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. 214. 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 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 request. 215. 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, selfemployed 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 information gathering powers in respect of all individuals and entities in Slovenia. 216. Over the three years of the review period, Slovenia received 74 EOI requests. The requests for exchange of information both to and from Slovenias EOI partners vary in complexity and cover a wide range of material. To answer these requests, Slovenias authorities use their broad access powers to collect this information either by letter, directly on the premises of the businesses or through a tax audit. Based on comments received from its

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treaty partners, Slovenia has been able to collect the requested information in all instances and irrespective of the type of information requested. 217. 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 committing the offence. 218. Slovenias legal framework recognises both bank secrecy and professional privilege. However, the obligation to provide information to the tax 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. Further, the application of rights and safeguards do not unduly prevent or delay effective exchange of information in practice.

B.1. Competent Authoritys 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).

219. Under Slovenias information exchange agreements the Ministry of Finance or its authorised representative is the designated competent authority. Section265 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 (section86).

Slovenias competent authority


220. The Ministry of Finance is the competent authority in Slovenia. The Ministry of Finance has designated the General Tax office of the Tax Administration to carry out all tasks in relation to exchange of information in the field of direct taxation, VAT and recovery of claims for requests made under bilateral double taxation conventions (DTCs), Tax Information Exchange Agreements (TIEAs), the OECD/Council of Europe Multilateral Convention on Mutual Administrative Assistance in Tax Matters, Council Directive 2011/16/EU of 15February 2011 on administrative co-operation in the field of taxation, Council Directive 2003/48/ES of 3June 2003 on taxation of savings income in the form of interest payments, Council Regulation 904/2010 of 7October 2010 on administrative co-operation and combatting fraud in the field of value added tax and Council Directive 2010/24 of

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16March 2010 concerning mutual assistance for the recovery of claims relating to taxes, duties and other measures. 221. The International Information Exchange Unit (the Unit) of the Department for Tax Supervision, International Information Exchange and Tax Register, is part of the General Tax office and has been designated as the central liaison office (CLO). It acts as the point of contact for competent authorities of other jurisdictions. The Unit has existed since 1999 and comprises seven employees (one Head of Unit, four senior advisers, one adviser and one analyst). Within the Unit, in addition to the Head of Unit, one person is in charge of EOI for direct taxation, one person is in charge of spontaneous EOI, two persons for automatic exchange, one person is in charge of VAT and one person is responsible for requests on recovery. 222. The Slovene competent authority is identified on the internet site of the Slovene Tax Administration, on the EU and OECD websites, and contact details of the Slovene competent authority are provided to the European Commission and to the competent authorities of Slovenias treaty partners. 223. The Slovene Tax Administration is divided into one General Tax Office, one Special Tax Office13 and 15 Local Tax Offices. Requests received are processed by the Unit, with the help of the Special Tax Office (for entities under its supervision) and Local Tax Offices when the information is not directly available at the level of the General Tax Office. The processing of incoming requests will be further described under sectionC.5 of this report.

Ownership and identity information (ToRB.1.1)


224. The powers to obtain information for tax purposes are provided for in the TPA. Section39(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 otherwise 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.

13.

The Special Tax Office (Large Business Office) is in charge of: banks, savings banks, insurance companies, companies, which organise classic permanent games of chance and special games of chance, companies, which organise special games of chance in gambling halls, stock exchanges, bourse brokerage companies, investment companies, management companies, pension companies and central securities clearing corporations. The Special Tax Office is also in charge of companies, whose total revenues in the previous tax year exceeded EUR50million. The Special Tax Office also performs tasks related to the audit of gaming.

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225. As described in sectionA.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, individuals carrying on business (including acting by way of business as a trustee of a foreign trust) must keep records under section31(2) TPA. All of these persons are therefore covered by the obligation to provide the tax authorities with information under section39(1) TPA. 226. 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 databases are linked and automatic access is already granted to the tax authorities. 227. Section39(3) TPA specifies that information from the persons covered by section39(1) TPA may be obtained either (i)automatically, (ii)upon written request or (iii) on-the-spot. The automatic provision of information 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 business premises of the taxpayer (see also B.1.4). 228. The obligation to provide information that applies to the persons covered by section39(1) TPA is extended to information in the possession of affiliated persons14 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 jurisdictions territorial jurisdiction. 229. 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).

14.

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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Information gathering in practice Information directly available to the International Information Exchange Unit
230. In Slovenia, the International Information Exchange Unit (the Unit), which is part of the General Tax office, has direct access to a wide range of information to answer incoming EOI requests. When the information is already directly available to the Unit, further inquiry is not necessary and the request is processed and answered directly by the Unit in less than a month. 231. The Unit has access to all tax information available to the Tax Administration, including information from the Tax Register, information from direct tax (individual and corporate) and VAT returns, the value added tax information exchange system, information pertaining to taxes on profit, property sale tax, gift and inheritance tax, withholding tax, data on audit and tax investigations and information received or exchange with other jurisdictions. 232. The Unit has access to the Tax Register which is managed by the Tax Administration and contains information received from databases maintained by other government authorities: the Court Register, the Central Population Register, the Health Insurance Register (information on employment such as the name of the employer, date and nature of employment), the Register of Spatial Units (information on address and postal code), the Register of transaction accounts and transaction account holders see SectionA.1 above);

In addition the Unit has access to the other databases maintained by other government authorities, including: the Register of Foundations, the Real Estate Register (information on ownership, value and type of immovable properties); the Land Register (current and historical data about ownership, information on liens and mortgage); information held by the Customs Administration (data on the total value of import and exports and data on decisions issued by the Custom Administration concerning VAT refund); information held by AJPES (information on procedural acts and insolvency proceedings of the entity bankruptcy, liquidation information from balance sheet and profits and loss accounts, information about transactions and balance on bank accounts);

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information held by the Public Payment Administration (that contains information on the payment of taxes in Slovenia); and data held by the Ministry of Infrastructure (register of motor vehicle and boats, including ownership information).

233. All other information that is available to another government agency and that is not directly available to the Unit must be provided to the Unit upon request (s.39(1) TPA), such as information from the Central Securities Clearing Corporation (for ownership information of public limited companies and limited partnerships with share capital, including ownership information on holder of bearer shares), and the database of credit rating reports.

Collection process
234. Whilst much information is already available to the Unit, in the majority of cases, the EOI requests are transferred to the Local Tax Office or the Special Tax Office in charge of the person concerned identified in the request. These offices are responsible for collecting the information from the person concerned or from third parties. Each Local Tax Office, as well as the Special Tax Office has a person designated as contact person for EOI, who is responsible for overseeing EOI requests and communicating with the Unit. When a request is transferred to the Local Tax Office/Special Tax Office, it is transferred to this contact person. The request is assigned to a local agent based on availability of the staff within the Local/Special Tax Office. 235. The collection process is taken care of by the Local/Special Tax Office in charge of the person concerned. The information can be collected by letters, by on-site visits (used in practice for legal entities only) or by way of a tax audit, depending of the type of information requested. In practice, tax audits are generally performed. There is no specific timeframe given to the person concerned or to the person in possession of the information to answer the letter requesting the information. The deadline to provide the information is decided by the agent in charge of the request, it depends on the information needed and is generally around a few days. Slovenias authorities have confirmed that the information is provided on time in the vast majority of cases. 236. The decision to collect the information from the person concerned, from a third party in possession of the information or from both belongs to the local agent in charge of the request and depends, amongst other things, on the type of information needed (bank information is generally requested from the bank). 237. If the person concerned or the third party in possession of the information fails to provide the information requested within the allocated timeframe, the local agent in charge of the request sends a reminder or can decide to collect the information from another person in possession of the

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information. Fines can be applied for failure to provide the requested information in such circumstances, although no such fines were applied during the period under review, as the information was obtained in all cases (from the person requested). See sectionB.1.4 below for penalties applicable for failure to provide the information. 238. Slovenia indicated that during the period under review, the answer was provided directly by the Unit to 15% of requests received. However, in most cases the request had to be transferred to the Local Tax Office/Special Tax Office for collection (78% of the cases) or the information was requested from another governmental authority (7% of the cases). 239. In sum, Slovenias tax authorities have several tools to collect information requested by a treaty partner. All these tools are flexible and can be used and this gives broad assurance that Slovenia will be in position to provide information on request. In practice, Slovenias authorities have confirmed that these measures are efficient as they are able to collect the requested information in all instances. This is also confirmed by Slovenias treaty partners.

Bank information
240. Banks must have the legal form of a public limited company and they are therefore required to provide information to the tax authorities under section39(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 sectionA.3 of this report, most of this information (but not on inflows) must also be provided to AJPES for registration. 241. In Slovenia, banks need to report information on bank accounts to the Register of Transaction Accounts and Transaction Account Holders which is linked to the Court Register, and to which the Tax Administration and the Unit have direct access. Therefore, Slovenia can answer a request that only provides the bank account number as other information (name of the bank, name of the account holder) is available in both the Court Register and the Register of transaction accounts and transaction account holders. Slovenia can also answer a request when the bank account number is not mentioned provided the request includes information to identify the account holder. 242. The collection of bank information is carried out under the same process as explained above. The information that is not available to the Unit can be collected either from the person concerned, directly from the bank or from both. In practice, bank information is generally requested directly from the bank. During the period under review, five EOI requests received were in relation to bank information. In all cases the information was collected from the bank and provided on time by the banks and the Competent Authority to its partners.

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Conclusion
243. 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 section39(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 section39(1) TPA. Finally, section41 TPA provides the power to obtain information from individuals who are not self-employed. It can be expected that most information will be obtained under section39(1), as information that is 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 (ToRB.1.2)


244. 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). 245. In practice, the collection of accounting information is subject to the same collection process as ownership and banking information, as explained above. The Slovene tax authorities indicated that tax audit is generally preferred for the collection of accounting information. 38 EOI requests dealing with accounting information were received during the period under review and in all cases the information was available and exchanged.

Use of information gathering measures absent domestic tax interest (ToRB.1.3)


246. As explained under B.1.1 above, Slovenias 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 section39(1) TPA. 247. When information must be obtained from individuals not performing self-employed activities, the access powers of section41 TPA apply. In addition, section8 of the Constitution states the following: Laws and regulations must comply with generally accepted principles of international law and with treaties that are binding on Slovenia. Ratified and published treaties shall be applied directly.

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248. In the previous version of section39 TPA, a second paragraph was included clearly stating that these powers could also be applied by the tax authorities pursuant to a valid international agreement binding on Slovenia. However, this precision did not exist in sections40 (information requested from affiliate persons) and 41 TPA which created ambiguity on whether a domestic tax interest existed with regard to sections40 and 41 TPA since a similar paragraph was not included in these two sections. 249. In order to clarify the situation and considering that paragraph2 of section39 TPA was not necessary for the interpretation of section39(1) TPA, Slovenia amended the TPA by deleting section39(2) TPA. As a result, sections39, 40 and 41 are now similarly drafted without any specific reference to international agreements, thus there is no longer any uncertainty with regard to the interpretation of these three sections. 250. Pursuant to section8 of the Constitution and to section2 of the TPA that states that The tax authority shall proceed pursuant to this Act [] when providing assistance in the collection of taxes or exchange of information with other EU Member States, or in implementing the international treaties binding upon the Republic of Slovenia, it is now clear that information foreseeably relevant to the enforcement of the domestic tax laws of the treaty partner can be obtained and exchanged as if it were information regarding a Slovene tax obligation, hence it is clear that Slovenia can use all of its access powers for EOI purposes. Furthermore, no requests for EOI have ever been turned down because of a domestic tax interest requirement.

Compulsory powers (ToRB.1.4)


251. Jurisdictions should have in place effective enforcement provisions to compel the production of information. 252. Any person covered by sections39 and/or 40 TPA failing to make available to the tax authority the information contained in its records, databases, 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 EUR800 and EUR10000. In the case of a legal person other than a large or medium sized company: between EUR1200 and EUR15000. In the case of a company which is regarded as a large or medium sized company according to the Companies Act: between EUR3200 and EUR30000.

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253. In addition, separate fines may be imposed on the individuals responsible for committing the offence (for example the director of a company). The amount of the fine can range between EUR400 and EUR4000 (ss.397(2) and 397(3) TPA). 254. 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 EUR400 to EUR2000 (s.395(3) TPA). 255. For the period under review, all information requested from individuals or legal entities for EOI purposes was provided in due time, therefore no fines or other sanctions were applied. Although no fines were applied, some general guidelines on the application of fines exist, referring to such considerations as the importance of the offence, whether it is the first time or a repetitive offence and the size of the entity (a bank would receive a more significant fine than an individual). In practice, sanctions are determined and applied directly by the local agent in charge of the file or by the auditor. 256. One of the procedures for the Slovene tax authorities to obtain information 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 30days (s.19(1) TAA). There were 76 cases of seizure under s. 19(1) TAA during the period under review, however, it is not possible to specify the proportion of these seizures that were undertaken for EOI purposes. 257. It seems clear that Slovenia has the necessary powers to compel the provision of information and answer the incoming requests. In practice, Slovenia has not experienced any situations where information could not be provided because of ineffective compulsory powers or sanctions.

Secrecy provisions (ToRB.1.5) Bank secrecy


258. Bank secrecy is established in section214 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). 259. However, the obligation to protect confidential information does not apply under certain circumstances. One of such circumstances mentioned is

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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 reference is made to this Act. The obligation to provide the tax authorities with information under section39 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 authorities on the basis of section37 TPA (see also B.1.1).

Professional privilege (attorney-client privilege)


260. Under section6 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 lawyers duty in practising the legal profession (section77(b)(1) of the Statutes of the Bar Association of Slovenia). 261. 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 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, Article7(3) of the Model TIEA and its Commentary). 262. 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. 263. In a decision regarding the obligations of Slovene attorneys to act as a representative of the Bar Association during the execution of a search warrant at the premises of another attorney, the Constitutional Court refers in a footnote to the professional privilege as follows15: 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. 264. 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
15. Constitutional Court of Slovenia, 15April 2010, case reference Up-2530/06-26, footnote 4.

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highest 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 accodance with the standard. 265. In Slovenia, lawyers cannot disclose confidential information (as described above) received from their clients. The Slovene authorities have advised that the professional secrecy of lawyers has never hindered the access to information for tax purposes since the legal privilege has never been invoked by lawyers. In addition, during the period under review, no information was requested from lawyers to answer EOI requests.
Determination and factors underlying recommendations
Phase1 determination The element is in place. Phase2 rating Compliant

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.

266. Rights and safeguards should not unduly prevent or delay effective exchange of information. For instance, notification rules should permit 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 (ToRB.2.1)


267. There is no requirement in Slovenias 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. 268. There are therefore no restrictions in practice in accessing information due to a notification procedure. No comments have been received from treaty partners suggesting that the provision of information might be delayed by Slovenia because of rights and safeguards.

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Determination and factors underlying recommendations


Phase1 determination The element is in place. Phase2 rating Compliant

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C. Exchanging Information

Overview
269. Jurisdictions generally cannot exchange information for tax purposes 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 allow it to achieve effective exchange of information in practice. 270. Slovenia has a network of information exchange mechanisms that covers 94 jurisdictions (including all relevant partners), 58 by way of a DTC, and 3 by way of a TIEA. In addition, the OECD/CoE Convention on Mutual Administrative Assistance in Tax Matters covers 33 jurisdictions that Slovenia does not have a bilateral agreement with. 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. 271. While this report is focused on the terms of its EOI agreements and practices concerning EOI on request, Slovenia is also involved in spontaneous and automatic exchange of information, e.g.under the EU Savings Directive 2003/48/EC. Slovenia also exchanges information on VAT and recovery with other European jurisdictions. 272. During the period under review (July 2009-June 2012), Slovenia received a total of 74 requests for information (18 requests received from 1July 2009 to 31December 2009, 18 for 2010, 27 for 2011 and 11 for the period from 1January 2012 to 30June 2012), from 17 treaty partners, the most significant being Austria, Croatia, Germany and Italy.

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273. The confidentiality of information exchanged with Slovenia is protected 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. 274. Slovenias information exchange agreements ensure that the contracting 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. With regard to confidentiality, no issues were raised, as the confidentiality of information is ensured throughout the collection and exchange process. 275. Slovenias response timeframe is generally good, on average, for the period under review, 60% of requests were answered in less than 90days and 85% in less than 180days. However, some peers have noted that status updates are not provided even though answers cannot be provided within 90days. Hence, it is recommended that Slovenia establish a process to update requesting authorities on the progress of their requests where a full response cannot be provided within 90days. 276. In practice, comments received by Slovenias main treaty partners are very positive and reflect the efficient EOI process in place in Slovenia and the appropriate resources devoted to it. They show that Slovenia is a valuable treaty partner able to provide complete answers to the majority of the many EOI requests they receive every year in less than 180days and in the form requested.

C.1. Exchange of information mechanisms


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

277. Slovenia is party to a variety of bilateral and multilateral exchange of information mechanisms. Bilaterally, Slovenia has concluded 58 DTCs and 3 TIEAs (see Annex2). This section of the report explores whether these agreements allow Slovenia to effectively exchange information. 278. In addition to its bilateral agreements, on 27May 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 33 jurisdictions16 with which Slovenia does not
16. These jurisdictions are: Argentina, Aruba, Australia, Belize, Brazil, the Caribbean part of the Netherlands (islands of Bonaire, Sint Eustatius and Saba), Colombia, Costa Rica, Curaao, Faroe Islands, Ghana, Greenland, Guatemala, Indonesia, Japan, Mexico, Montserrat, Morocco, New Zealand, Nigeria, Saudi Arabia,

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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 1June 2011. 279. Since the Phase1 review, three protocols have entered into force (Austria, Germany and Switzerland) and one protocol has been signed (Luxembourg). In addition, seven new agreements have entered into force (Armenia (DTC), Azerbaijan (DTC), Georgia (DTC), Guernsey (TIEA), Iceland (DTC), Isle of Man (TIEA) and Kuwait), and four have been signed (Jersey (TIEA), Kosovo (DTC), United Arab Emirates (DTC) and Uzbekistan (DTC)). 280. As an EU member state, Slovenia also exchanges tax information under various other multilateral mechanisms, including: Council Directive 2011/16/EU of 15February 2011 on administrative co-operation in the field of taxation, replacing Council Directive 77/799/EEC concerning mutual assistance by the competent authorities of the Member States of the EU in the field of direct taxation and taxation of insurance premiums. Council Directive 2003/48/EC of 3June 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. Council Regulation (EU) 904/2010 of 7October 2010 on administrative co-operation and combating fraud in the field of value added tax.

281. 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 themselves. There are no domestic rules in Slovenia requiring it to choose between mechanisms where it has more than one agreement involving a particular 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.
SintMaarten, South Africa, and Tunisia. Whilst the convention is already in force in Argentina, Aruba, Australia, the Caribbean part of the Netherlands (islands of Bonaire, Sint Eustatius and Saba), Costa Rica, Curaao, Faroe Islands, Ghana, Greenland Japan, Mexico, Montserrat, Slovenia and Sint Maarten, the convention is yet to come into force in the other jurisdictions.

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282. Slovenia also exchanges information automatically under DTCs the EU Savings Directive and Council Regulation (EU) 904/2010 concerning VAT matters, and spontaneously under DTCs, EU Council Directive on Administrative Cooperation in the Field of Taxation 2011/16/EU and Council Regulation (EU) 904/2010. 283. With regard to automatic exchanges, for the period under review (July 2009 to June 2012), Slovenia received more than 61000 pieces of data and sent more than 100000 pieces of data to 37 jurisdictions. With regard to spontaneous exchanges, during the period under review, Slovenia received spontaneous exchanges in relation to 447 taxpayers and sent pieces of data spontaneously to other jurisdictions in relation to 51 taxpayers, mainly to Austria, France, Germany and the United Kingdom. Slovenia is also party to multilateral audits under the EU Fiscalis program. 284. As a member of the European Union, Slovenia is involved in the European common VAT system and as a consequence in the VAT exchange of information that takes place under the EU regulation (EC) 904/2010 that entered into force on 1January 2012 (previously (EC) 1798/2003). For the period July 2009-June 2012, 813 requests for information were received and 673 international requests were made by Slovenia, with regard to VAT. 285. During the period under review, Slovenia responded to 74 EOI requests received from more than 17 jurisdictions. Slovenias main treaty partners are Austria, Croatia, Germany and Italy.

Foreseeably relevant standard (ToRC.1.1)


286. 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 foreseeable relevance which is included in Article26(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 Articles1 and 2.

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287. 17 of Slovenias DTCs (with Armenia, Austria, Azerbaijan, Belarus, Cyprus1718, Germany, Georgia, Iceland, Kosovo, Kuwait, Luxembourg (protocol), Norway, Singapore, Switzerland, United Arab Emirates, the United Kingdom and Uzbekistan) and its TIEAs with Guernsey, the Isle of Man and Jersey use this or similar language and therefore clearly meet the foreseeably relevant standard. 288. It is noted that the DTC with Cyprus includes a provision requiring the requesting state to demonstrate the foreseeable relevance of a request by providing certain specified information. The provision in question mirrors Article5(5) of the OECD Model TIEA and, therefore, the requirement is consistent with the international standard. Similar provisions are included in Slovenias TIEAs. 289. 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 Article26(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. Slovenias authorities state that they interpret these alternative formulations as equivalent to the term foreseeably relevant. Therefore, all of Slovenias information exchange agreements meet the foreseeably relevant standard.

In respect of all persons (ToRC.1.2)


290. For EOI to be effective it is necessary that a jurisdictions 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.
17. Footnote from Turkey: The information in this document with reference to Cyprus relates to the southern portion of the Island. There is no single authority representing 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. 18. Footnote by all the European Union Member States of the OECD and the European Union: 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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291. The DTCs applicable to Russia and Sweden 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. 292. All other information exchange agreements do specifically provide for exchange of information in respect of all persons.

Obligation to exchange all types of information (ToRC.1.3)


293. 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 ownership information. Both the OECD Model Convention (Article26(5)) and the OECD Model TIEA (Article5(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. 294. The DTCs concluded by Slovenia before the update of the OECD Model Tax Convention in 2005 do generally not contain a provision corresponding to Article26(5), which was introduced at that update. Only the DTCs with Armenia, Austria, Azerbaijan, Belarus, Cyprus,19 Germany, Georgia, Iceland, Kosovo, Luxembourg (protocol), Norway, Qatar, Singapore, Switzerland, United Arab Emirates, the United Kingdom and Uzbekistan, as well as the TIEAs with Guernsey, the Isle of Man and Jersey 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 Article26(5) indicates that while paragraph5 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 information. Slovenias domestic laws allow it to access and exchange the information covered by Article26(5) even in the absence of such provision in the DTC. 295. Restrictions in accessing bank information in the absence of a provision corresponding to Article26(5) of the OECD Model Tax Convention may exist in
19. See footnotes 17 and 18.

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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 (ToRC.1.4)


296. 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. 297. The DTCs concluded by Slovenia before the update of the OECD Model Tax Convention in 2005 do generally not contain a provision corresponding to Article26(4), which was introduced at that update and which stipulates that a domestic tax interest may not be a reason to decline an information request. Only the DTCs with Armenia, Austria, Azerbaijan, Belarus, Cyprus,20 Germany, Georgia, Iceland, Kosovo, Luxembourg (protocol), Norway, Qatar, Singapore, Switzerland, United Arab Emirates, the United Kingdom, the United States and Uzbekistan, as well as the TIEAs with Guernsey, the Isle of Man and Jersey contain such a provision. However, the absence of this provision does not automatically create restrictions on the exchange of information. The Commentary to Article26(4) indicates that paragraph4 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 Slovenias laws even in the absence of a provision corresponding with Article26(4) of the OECD Model Tax Convention. 298. A domestic tax interest requirement may however exist for some of Slovenias treaty partners. It is recommended that Slovenia monitor effective exchange of information with such treaty partners and, if necessary, renegotiate its information exchange agreements to incorporate wording in line with Article26(4) of the OECD Model Tax Convention.

Absence of dual criminality principles (ToRC.1.5)


299. 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 criminality principle.
20. See footnotes 17 and 18.

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300. 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 (ToRC.1.6)


301. 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 information requested for tax administration purposes (also referred to as civil tax matters). 302. All of the information exchange agreements concluded by Slovenia cover both civil and criminal tax matters.

Provide information in specific form requested (ToRC.1.7)


303. According to the Terms of Reference, exchange of information mechanisms should allow for the provision of information in the specific form requested (including depositions of witnesses and production of authenticated copies of original documents) to the extent possible under a jurisdictions domestic laws and practices. 304. 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. 305. 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 addition, the DTC with India obliges the contracting parties to exchange certified copies of documents if so requested. 306. Slovenias authorities have confirmed that they are ready to provide information in the specific form requested to the extent permitted by Slovenias laws and administrative practices. In addition, according to comments received from Slovenias treaty partners, there do not seem to have

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been any instances where Slovenia was not in a position to provide the information in the specific form requested or in an acceptable format.

In force (ToRC.1.8)
307. 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. 308. Of the 61 bilateral information exchange agreements concluded by Slovenia, seven are not in force (with Egypt, Iran, Jersey (TIEA), Kosovo, Luxembourg (Protocol), United Arab Emirates and Uzbekistan). Slovenia has completed all internal procedures and notified its treaty partners of the completion of the ratification procedure in respect of the agreement with Egypt. 309. In Slovenia, treaty negotiations generally take place in English and once the text of the treaty is agreed and initialled, it has to be translated into Slovene before signature. The translation takes approximately one month. When the translation is completed, a report is prepared by the Ministry of Finance, which is reviewed by the Ministry of Foreign Affairs and then presented to the Government21. The Government decides who will sign the treaty. 310. Once the treaty is signed, the Ministry of Finance prepares a letter to the Ministry of Foreign Affairs for them to prepare the draft law for ratification. This draft law is then sent to the Government for approval and then to the Parliament for adoption. 311. Once the law is adopted, the treaty is published in the Official Gazette and the Ministry of Foreign Affairs exchanges a notice with the partner jurisdiction to notify the ratification. When the date of entry into force is known, it is published in the Official Gazette. 312. It generally takes approximately a year between the end of the negotiations and the ratification of the treaty.

Be given effect through domestic law (ToRC.1.9)


313. 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. 314. International agreements are published in the Official Gazette once ratified by the Slovene National Assembly. Section8 of the Constitution
21. The Prime Minister and Ministers, who meet weekly.

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states that [r]atified and published treaties shall be applied directly, meaning that publication of a DTC or TIEA in the Official Gazette gives direct effect to those agreements and sufficiently implements them in Slovenias domestic law. In addition, Slovenias legal and regulatory framework ensures that the authorities can access and provide information under its information exchange agreements.
Determination and factors underlying recommendations
Phase1 determination The element is in place. Phase2 rating Compliant

C.2. Exchange of information mechanisms with all relevant partners


The jurisdictions network of information exchange mechanisms should cover all relevant partners.

315. 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. 316. In Slovenia, the team in charge of treaty negotiations comprises four persons, none of them being exclusively dedicated to treaty negotiations. Slovenia has never refused to enter into negotiations but has sometimes postponed the negotiations due to limited resources of the negotiation team. 317. Slovenias priority over the last few years has been to update its network of existing treaties to bring them to the standard. Slovenia has also signed agreements with new jurisdictions. Negotiations of agreements with new partners are decided on the basis of criteria such as economic interest. Slovenia has indicated that the priority for the coming years will be to sign TIEAs with new jurisdictions that have committed to the standard. All new agreements concluded by Slovenia are based on the OECD Model Tax Convention and include a full version of Article26 of this Model Convention (including paragraphs4 and 5).

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318. Slovenia has exchange of information relationships with 94 jurisdictions, of which 58 are through a DTC and 3 through a TIEA. In addition, the OECD/CoE Convention on Mutual Administrative Assistance in Tax Matters, which covers 76 jurisdictions, 33 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 and 77 of the Global Forum member jurisdictions.

319. In the last year, three protocols have entered into force (Austria, Germany and Switzerland) and one protocol was signed (Luxembourg). In addition, seven new agreements have entered into force (Armenia (DTC), Azerbaijan (DTC), Georgia (DTC), Guernsey (TIEA), Iceland (DTC), Isle of Man (TIEA) and Kuwait), and four were signed (Jersey (TIEA), Kosovo (DTC), United Arab Emirates (DTC) and Uzbekistan (DTC)). 320. Comments were sought from the jurisdictions participating in the Global Forum in the course of the preparation of this report, and no jurisdiction advised the assessment team that Slovenia had refused to negotiate or conclude an information exchange agreement with it. In summary, Slovenias network of information exchange agreements covers all relevant partners. Slovenia has made a considerable amount of effort and progress in updating and developing its network of treaties to the standard, leading to an exchange of information relationship with 94 partners.
Determination and factors underlying recommendations
Phase1 determination The element is in place. Factors underlying recommendations Recommendations Slovenia should continue to develop its EOI network with all relevant partners. Phase2 rating Compliant

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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 (ToRC.3.1)


321. 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. 322. 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 Slovenias information exchange agreements can be applied directly according to section8 of the Constitution. 323. Slovenias domestic law also provides that tax officials and other persons who, due to the nature of their work, come into contact with confidential 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 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 Slovenias domestic tax laws. Any individual disclosing information in contravention with section16 TPA is subject to a fine ranging from EUR400 to EUR2000 (s.395(2) TPA). 324. In practice, Slovenia has strict confidentiality measures and controls in place. All employees of the Tax Administration have a duty of confidentiality, including contractual staff such as translators. Employees and other staff are acquainted with their obligations laid down in the confidentiality provisions of the Tax Administration by signing a statement of acknowledgment of these provisions when they start their employment. Different types of training on confidentiality are provided (such as seminars), and internal guidelines are available. In addition, access to the Tax Administration building (where paper and electronic information is stored) is protected with

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organisational, physical and technical measures. Entry to the tax authority premises is restricted, protected by an electronic code and a security guard is present at all times. Besides applying to all employees of the tax authority, duty to protect confidential tax information applies to employees of all other government agencies as well as to all other personnel, experts, translators, minutes keepers and other persons who co-operate or have co-operated in the collection of taxes, and all other persons who, due to the nature of their work, come into contact with information regarded as confidential tax information. 325. To prevent unauthorised access to confidential data, the tax authorities have set up a system of procedures and measures for safeguarding confidential information. The Tax Administration has a password-protected IT system and a password is also needed to enter different databases. In addition, the Tax Register allows tracking of which data has been accessed and by whom. Access to the database is limited only to employees who need the information in connection to their work. Each entry has to be justified and traceability is ensured. No one can obtain confidential information before it is needed or to a greater extent that is required for the performance of the work. 326. There are other policies and practices that the Tax Administration uses to protect information sent electronically. Information is not sent electronically except for the exchange of information amongst EU Countries via CCN/CSI22 mail. The information exchanged automatically with non-EU countries is sent on encrypted CDs, marked with Tax Confidentiality. Information exchanged between government agencies or between the General Tax Office and Local Tax Offices is exchanged through secured e-mails. 327. When received, an EOI request is registered in the centralised documentation database of the Tax Administration (EPIS) and an identification number is attributed to the request. A hard copy is prepared (marked confidential) and stored at the premises of the General Tax Office in a locked storage unit. Additionally, the request is recorded in the intranet application of the Tax Administration called Maks. Access to the EOI records in Maks is only granted to the International Information Exchange Unit (the Unit) and the contact persons of the Local/Special Tax Offices for requests that are under the competence of their tax office. 328. When an EOI request is transferred from the Unit to a Local/Special Tax Office, the transfer is done by secure e-mail. In addition, the statement This information is furnished under the provision of Double Tax Convention and/or Council Directive and/or Tax Information Exchange Agreement and its use and disclosure must be governed by the provisions named there is added to protect the confidentiality of information.
22. CCN is a secured network mainly devoted to exchange of information in tax matters between EU member states.

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329. When the information needs to be collected from the person concerned or from a third party in possession of the information, the minimum information necessary to collect the information is disclosed. The fact that the information is needed for EOI purposes is not mentioned and in no instance can the person concerned or the third party in possession of the information access the request. 330. Given the measures in place with Slovenias tax authorities to protect the confidentiality of information and given that no treaty partners have raised doubts about the ability of the Slovene authorities to respect confidentiality nor have any cases been reported where this obligation was violated, the assessment team it can be concluded that the disclosure, use, and safeguard of confidential information in Slovenia is in line with the standard.

All other information exchanged (ToRC.3.2)


331. 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. 332. 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 information concerning the tax liability of a person liable to tax, which presumably refers to Slovene tax liability. However, as explained above, the confidentiality provisions of Slovenias information exchange agreements, which cover any information exchanged, can be applied directly according to section8 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 confidential as if it was information regarding a Slovene tax liability (see also sectionB.1.3 of this report). 333. During the Phase1 evaluation, the question arose as to whether the domestic enforcement measures under section16 TPA are available with respect to the broader confidentiality duty under an information exchange agreement. In this regard, section2(1) TPA stated: The tax authority shall proceed pursuant to this Act when deciding 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.

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334. The Phase1 evaluation found that: this provision combined with section8 of the Constitution mean that the Slovene authorities can use the enforcement procedures provided for a breach of confidentiality in section16 TPA also for a breach of confidentiality under a DTC. It should be noted that TIEAs and other international treaties are not mentioned in section2(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 three TIEAs concluded by Slovenia and the 33 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). The Phase1 evaluation recommended that Slovenia ensures that it can use enforcement measures for breach of confidentiality in all cases. 335. Since the Phase1 evaluation, Slovenia has amended section2(1) TPA by removing the specific reference to DTCs. The new provision reads as follow: The tax authority shall proceed pursuant to this Act when deciding on the obligations and rights of individuals, legal persons and other parties [] in implementing the international treaty binding upon the Republic of Slovenia. 336. With this amendment, enforcement measures referred to in this section are no longer limited to DTCs, they are now applicable to all international treaties. Considering the amendment made to section2(1) TPA, Slovenia is now in a position to use enforcement measures for breach of confidentiality in all cases, although this new provision has not been used for enforcement purposes since there has been no breach of confidentiality. The Phase1 recommendation is therefore removed. 337. Finally, it is noted that a specific provision is in force to lift the obligation 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
Phase1 determination The element is in place. Phase2 rating Compliant

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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 (ToRC.4.1)


338. The international standard allows requested parties not to supply information in response to a request in certain identified situations. 339. In line with the standard, under all of Slovenias information exchange agreements the contracting 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. In addition to professional secrecy, the TIEAs with Guernsey and the Isle of Man specifically refer to legal privilege. These terms are not defined in the respective agreements, meaning that domestic law definitions apply. No issues were found in Slovenias domestic legal and regulatory framework in respect of secrecy provisions (see sectionB.1.5 of this report). 340. Taking account of the answers provided by peers, there have not been any instances where the rights and safeguards of taxpayers or third parties were not preserved by Slovenia.
Determination and factors underlying recommendations
Phase1 determination The element is in place. Phase2 rating Compliant

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 90days (ToRC.5.1)


341. 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 international co-operation as cases in this area must be of sufficient importance to warrant making a request.

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342. There are no specific legal or regulatory requirements in place which would prevent Slovenia from responding to a request for information by providing the information requested or providing a status update within 90days of receipt of the request. 343. During the period under review (July 2009 June 2012), Slovenia received a total of 74 requests for information (18 requests received from 1July 2009 to 31December 2009, 18 in 2010, 27 in 2011 and 11 in the period from 1January 2012 to 30June 2012), from more 17 treaty partners, the most significant being Austria, Croatia, Germany and Italy. 344. For these years, the percentage of requests where Slovenia answered within 90days, 180days, one year, or more than one year, were:
2009 (July-Dec) nr. Full response*: 90days 180days (cumulative) 1 year (cumulative) >1 year (b) (c) 11 15 (a) 17 1 0 0 0 % 2010 nr. % 2011 nr. % 56% 85% 0% 0% 0% 0% 2012 (Jan-June) Total Average nr. 6 9 0 0 0 0 % nr. % 100% 60% 85% 98% 2% 0% 0% 0%

Total number of requests received** (a+b+c+d+e) 18 100% 18 100% 27 100% 11 100% 74 61% 12 83% 15 94% 17 6% 0% 0% 0% 1 0 0 0 67% 15 83% 23 6% 0% 0% 0% 0 0 0 0 55% 44 82% 62 0% 0% 0% 0% 2 0 0 0

94% 27 100% 11 100% 72

Declined for valid reasons

Failure to obtain and provide information Requested(d) Requests still pending at date of review (e)

* The time periods in this table are counted from the date of receipt of the request to the date on which the complete and final response was issued. ** Slovenia counts each written request from an EOI partner as one EOI request even where more than one person is the subject of an inquiry and/or more than one piece of information is requested.

345. 98% of requests received during the period under review were answered within one year. On average, for the period under review, 60% of the requests were answered in less than 90days and 85% in less than 180days. However, one treaty partner has commented that answers have sometimes been delayed. Only two requests took more than a year to answer during the whole period. Slovenia explained that these two requests were responded to in more than a year because both cases were related to a complex situation where verification of a large number of businesses and business transactions between several Slovene taxpayers and taxpayers in third countries was necessary.

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346. In addition, Slovenia has transposed the new EU Council Directive on Administrative Cooperation that came into effect on 1January 2013 into its domestic law. The new Directive requires that the information must be exchanged within six months of the receipt of the request for complex cases, except when the requested party already has this information available. In the latter cases, answers must be provided within two months. Slovenia mentioned that they are able to meet the requirements of the new Directive without difficulty and that it has not created any additional burden on the Tax Administration. 347. Over the course of this peer review, some of Slovenias partners mentioned that, generally speaking, Slovenia does not advise the requesting jurisdiction of the status of the request when a response cannot be provided within 90days, unless the requesting jurisdiction specifically requests it. The Slovene authorities agreed that this is a shortcoming in their co-operation and they are improving this situation with the implementation of a new IT system which will generate status updates for requests not answered within 90days. Slovenia is therefore recommended to monitor the implementation of this new system to ensure that updates are provided to requesting authorities on the progress of their requests where a full response cannot be provided within 90days.

Organisational process and resources (ToRC.5.2)


348. 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.

Organisational process
349. When an EOI request is received by the Tax Administration it is first registered in the centralised documentation database of the Tax Administration (EPIS) with the date of reception and an identification number which will be used to track the request. A paper copy is also created and confidentially archived. All the incoming and outgoing requests are also recorded in the intranet system (Maks) by the Unit. The request is then attributed to the agent in charge of EOI on request who verifies, within a few days, whether the request is complete, includes all documents and attachments, is valid, was sent by the partners competent authority, has legal basis and is foreseeably relevant. 350. When a request is not complete, the tax authorities first try to find the information by themselves; if they cant, they then ask the requesting jurisdiction for additional information. In practice, approximately one request received per year is incomplete.

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351. If the requested information is directly available to the Unit, the request is answered directly by the agent in charge of EOI on request within one month of receipt of the request. If the information is not directly available to the Unit, the request is translated and then transferred to another government agency or to the Local/Special Tax Office for collection of the information. The translation is usually done directly by the Unit in approximately two weeks. The translation can also be done by the translation service of the Slovene government in more complex cases (but the timeline remains the same). 352. Once translated, if the information is available with another government agency, a letter is sent to that agency requesting the information and the information is required within 15days. The original request is not sent to the other government agency; the information requested is set out in the letter. In practice, Slovenias authorities have confirmed that the information is always provided by other government agencies in due time and no follow-up measures are needed. 353. If the information is not available in any government agencies, the request is transferred (after translation) to the Local/Special Tax Office in charge of the person concerned, that is responsible for collecting the information from the person concerned or from a third party in possession of the information. 354. Transfers to the contact person of the Local/Special Tax Office are always made through secure email. There is no specific timeframe given to the Local/Special Tax Office to obtain the information, but Local/Special Tax Offices prioritise EOI requests received from the Unit. Slovenias authorities confirmed that the collaboration with Local/Special Tax Offices is very good and the information is obtained and transferred to the Unit with three months in the vast majority of cases. If the information is not received in two months, the Unit follows-up by e-mail and gives an additional deadline to provide the information (cases where the information is not obtained within three months are generally complex cases where additional time is needed). From 1January 2013, the Unit has introduced a two-month deadline for Local/ Special Tax Office to provide the request information. 355. Once the information is obtained, the contact person of the Local/ Special Tax Office verifies the information to make sure it is complete, and transfers the answer to the Unit. Once received by the Unit, the information is verified by the agent in charge of EOI on request and translated before the answer is sent to the requesting partner, within a few days of receipt of the answer from the Local/Special Tax Office.

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96 Compliance with the Standards: EXchanging Information

Resources
356. As mentioned above, the Unit is staffed with seven employees, one Head of Unit, four senior advisers, one adviser and one analyst. Within the Unit, in addition to the Head of Unit, one person is in charge of EOI for direct taxation, one person is in charge of spontaneous EOI, two persons for automatic exchange, one person is in charge of VAT and one person is responsible for requests on recovery. A reorganisation of the Tax Administration is expected to be implemented soon, including the merger of the Tax Administration and the Customs Administration and the reduction of the number of Local Tax Offices. As a consequence, some additional employees are expected to be transferred to the Unit in the near future. 357. All employees of the Unit are from the Tax Administration and thus have appropriate tax training and experience. They have access to a manual for the international exchange of information issued by the Tax Administration, which outlines the administrative processes and relevant legal bases. The manual is available on the Maks system. It provides detailed instructions to all persons involved in EOI. Information on forms used amongst EU partners, prepared by the European Commission, is also available in the IT system in the Slovene language. 358. Various training courses are available to employees of the Unit, including EOI training organised by the Tax Administration as well as conferences and workshops organised by the EU, the OECD and the Global Forum, to ensure continuous improvements to administrative procedures and practices. The Unit also organises various events in which employees involved in EOI, such as Local/Special Tax Office employees, receive information and updates on EOI. In the last three years, the Unit organised regular training for contact persons nominated at Local/Special Tax Offices (all contact persons have received this training), training for auditors, and other training courses which included EOI aspects. 359. Employees also have access to E-learning tools developed by the European Commission. The modules are available on the intranet site of the Tax Administration in Slovene. Other training in relation to EOI is also organised by the Tax Administration, such as training on international cooperation and on the protection of personal data and confidentiality. 360. Overall, Slovenia has dedicated appropriate financial, human and technical resources to the various areas of its exchange of information system taking account of the volume of requests it receives. All competent authority staff maintain high professional standards and have adequate expertise and training specific to exchange of information.

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Compliance with the Standards: EXchanging Information 97

Absence of unreasonable, disproportionate or unduly restrictive conditions on exchange of information (ToRC.5.3)


361. Exchange of information assistance should not be subject to unreasonable, disproportionate, or unduly restrictive conditions. There are no legal or regulatory requirements in Slovenia which impose unreasonable, disproportionate or unduly restrictive conditions. Nor are there any such conditions on exchange of information in practice.
Determination and factors underlying recommendations
Phase1 determination This element involves issues of practice that are assessed in the Phase2 review. Accordingly no Phase1 determination has been made. Phase2 Rating Compliant Factors underlying the recommendations In instances where it cannot provide an answer within 90days, Slovenia does not provide, routinely, a status update to its treaty partners. Recommendations Slovenia should ensure that it responds to EOI requests in a timely manner, by providing the information requested within 90days of receipt of the request, or if it has been unable to do so, by providing a status update.

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SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 99

Summary of Determinations and Factors UnderlyingRecommendations

Determination

Factors underlying 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 foreign companies having sufficient nexus with Slovenia (in particular, having their place of effective management in Slovenia) and on foreign partnerships carrying on business in Slovenia or deriving taxable income is not consistently available. Phase2 rating: Compliant Jurisdictions should ensure that reliable accounting records are kept for all relevant entities and arrangements (ToR A.2) The element is in place. Phase2 rating: Compliant Banking information should be available for all account-holders (ToR A.3) The element is in place. Phase2 rating: Compliant Slovenia should ensure that ownership information on foreign companies with sufficient nexus with Slovenia (in particular, having their place of effective management in Slovenia) and on foreign partnerships carrying on business in Slovenia or deriving taxable income is available in all cases.

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100 SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS


Factors underlying recommendations

Determination

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. Phase2 rating: Compliant 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. Phase2 rating: Compliant Exchange of information mechanisms should allow for effective exchange of information (ToR C.1) The element is in place. Phase2 rating: Compliant 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.

Phase2 rating: Compliant 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. Phase2 rating: Compliant The exchange of information mechanisms should respect the rights and safeguards of taxpayers and third parties (ToR C.4) The element is in place. Phase2 rating: Compliant

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SUMMARY OF DETERMINATIONS AND FACTORS UNDERLYING RECOMMENDATIONS 101

Determination

Factors underlying recommendations

Recommendations

The jurisdiction should provide information under its network of agreements in a timely manner (ToR C.5) This element involves issues of practice that are assessed in the Phase2 review. Accordingly no Phase1 determination has been made. Phase2 rating: Compliant In instances where it cannot provide an answer within 90days, Slovenia does not provide, routinely, a status update to its treaty partners. Slovenia should ensure that it responds to EOI requests in a timely manner, by providing the information requested within 90days of receipt of the request, or if it has been unable to do so, by providing a status update.

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ANNEXES 103

Annex1: Jurisdictions Response to the Review Report23


Slovenia wishes to express its gratitude and deep appreciation for the excellent work carried out by the assessment team. Slovenia believes that the report is a fair and accurate picture of its legal and regulatory framework in force and in practice. Slovenia is at the end of an exciting journey. The years 2012 and 2013 were dedicated to the peer review process. We are satisfied with the outcomes of the peer review process. Even though Slovenia has been assigned a rating of Compliant for each essential element, the recommendations made in the report are under consideration by the Ministry of Finance. Due to the amendments of the relevant legislation we have already addressed some recommendations of the Phase1 Report. Three recommendations are made as a result of the Phase2 Report. The recommendation on foreign companies is dealt with in the new Financial Administration Act. Slovenia continues to develop its exchange of information network with all relevant partners. Committed to the work of the Global Forum and improvement of the process of exchange of information, Slovenia will provide information in a timely manner or if not being able to do so provide a status update to the requesting country. Slovenia is at the end of the exciting journey and at the beginning of the global story a story of a greater transparency and automatic exchange of information. We welcome the new standard in automatic exchange of information developed by the OECD and are therefore committed to early adoption of the Common Reporting Standard. MSc. Irena Popovi Director General

23.

This Annex presents the jurisdictions response to the review report and shall not be deemed to represent the Global Forums views.

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104 ANNEXES

Annex2: List of all Exchange-of-Information Mechanisms inForce

EU regulations and multilateral agreements Slovenia exchanges tax information under:


EU Council Directive 2011/16/EU of 15February 2011 on administrative cooperation in the field of taxation. This Directive came into effect on 1January 2013. It repeals Council Directive 77/799/EEC of 19December 1977 and provides inter alia for exchange of banking information on request for taxable periods after 31December 2010 (Article18). The current EU member states, covered by this Council Directive, are: Austria, Belgium, Bulgaria, Croatia, Cyprus,24 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 3June 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 7October 2010 on administrative co-operation and combating fraud in the field of value added tax.

24.

See footnotes 17 and 18.

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ANNEXES 105

Multilateral agreement
Slovenia is a signatory to the multilateral OECD/CoE Convention on Mutual Administrative Assistance in Tax Matters. The status of the multilateral Convention and its amending 2010 Protocol as at 21November 2013 is set out in the table below.25 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.
Original Convention Signature (opened on 25-Jan-88) Entry into force Protocol (P)/ Amended Convention (AC) Signature (opened on 27-May-10) Entry into force 01-03-2013 (AC) 01-12-2013 05-11-2013 (AC) 01-03-2014 03-11-2011 (AC) 01-01-2013 01-09-2013 03-11-2011 (AC) 01-12-2012 29-05-2013 (AC) 04-04-2011 (P) 29-05-2013 (AC) 03-11-2011 (AC) 01-03-2014 28-04-2004 03-11-2011 (P) 27-08-2013 (AC) 24-10-2013 (AC) 23-05-2012 (AC) 01-03-2012 (AC) 11-10-2013 (AC) 26-10-2012 (AC) 01-03-2014 01-01-2014

Country Albania Andorra Anguillaa Argentina Arubab Australia Austria Azerbaijan Belgium Belize Bermudac Brazil British Virgin Islandsd Canada Cayman Islandse China Chile Colombia Costa Rica Croatia Curaaof Czech Republic

26-03-2003 07-02-1992

01-10-2004 01-12-2000

01-09-2013 01-03-2014

01-08-2013 01-09-2013 01-02-2014

25. The updated table is available at www.oecd.org/document/14/0,3746 ,en_2649_33767_2489998_1_1_1_1,00.html.

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106 ANNEXES
Protocol (P)/ Amended Convention (AC) Signature (opened on 27-May-10) Entry into force 27-05-2010 (P) 01-06-2011 29-05-2013 (AC) 01-06-2011 27-05-2010 (P) 01-06-2011 27-05-2010 (P) 01-04-2012 03-11-2010 (P) 01-06-2011 03-11-2011 (P) 10-07-2012 (AC) 01-09-2013 01-03-2014 21-02-2012 (P) 01-09-2013 01-06-2011 05-12-2012 (AC) 12-11-2013 (P) 27-05-2010 (P) 01-02-2012 26-01-2012 (AC) 01-06-2012 03-11-2011 (AC) 30-06-2011 (AC) 01-09-2013 01-03-2014 27-05-2010 (P) 01-05-2012 03-11-2011 (P) 01-10-2013 27-05-2010 (P) 01-07-2012 29-05-2013 (AC) 21-11-2013 (AC) 07-03-2013 (P) 29-05-2013 (P) 26-10-2012 (AC) 01-09-2013 27-05-2010 (P) 01-09-2012 27-01-2011 (P) 01-03-2012 01-10-2013 21-05-2013 (AC) 27-05-2010 (P) 01-09-2013 26-10-2012 (AC) 01-03-2014 29-05-2013 (AC)

Country Denmark Estonia Faroe Islandsg Finland France Georgia Germany Ghana Gibraltarh Greece Greenlandi Guatemala Hungary Iceland India Indonesia Ireland Isle of Manj Italy Japan Korea Latvia Liechtenstein Lithuania Luxembourg Malta Mexico Moldova Montserratk Morocco Netherlands New Zealand Nigeria

Original Convention Signature (opened on 25-Jan-88) Entry into force 16-07-1992 01-04-1995

11-12-1989 17-09-2003 12-10-2010 17-04-2008

01-04-1995 01-09-2005 01-06-2011

21-02-2012

01-09-2013

12-11-2013 22-07-1996

01-11-1996

31-01-2006 03-11-2011 27-05-2010

01-05-2006 01-10-2013 01-07-2012

07-03-2013 29-05-2013 27-05-2010 27-01-2011 01-09-2012 01-03-2012

25-09-1990

01-02-1997

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ANNEXES 107

Country Norway Poland Portugal Romania Russia San Marino Saudi Arabia Singapore Sint Maartenl Slovak Republic Slovenia South Africa Spain Sweden Switzerland Tunisia Turkey Turks & Caicosm Ukraine United Kingdom United States

Original Convention Signature (opened on 25-Jan-88) Entry into force 05-05-1989 01-04-1995 19-03-1996 01-10-1997 27-05-2010 15-10-2012

27-05-2010 12-11-2009 20-04-1989

01-06-2011 01-12-2010 01-04-1995

30-12-2004 24-05-2007 28-06-1989

01-07-2009 01-05-2008 01-04-1995

Protocol (P)/ Amended Convention (AC) Signature (opened on 27-May-10) Entry into force 27-05-2010 (P) 01-06-2011 09-07-2010 (P) 01-10-2011 27-05-2010 (P) 15-10-2012 (P) 03-11-2011 (AC) 21-11-2013 (AC) 29-05-2013 (AC) 29-05-2013 (AC) 01-09-2013 29-05-2013 (AC) 01-03-2014 27-05-2010 (P) 01-06-2011 03-11-2011 (AC) 01-03-2014 18-02-2011 (P) 01-01-2013 27-05-2010 (P) 01-09-2011 15-10-2013 (AC) 16-07-2012 (AC) 01-02-2014 03-11-2011 (AC) 01-12-2013 27-05-2010 (P) 01-09-2013 27-05-2010 (P) 01-10-2011 27-05-2011 (P)

Notes: a. Extension by United Kingdom (receipt by depositary on 13November 2013) b. Extension by the Netherlands (receipt by depositary on 29May 2013) c. Extension by United Kingdom (receipt by depositary on 13November 2013) d. Extension by United Kingdom (receipt by depositary on 13November 2013) e. Extension by United Kingdom (receipt by depositary on 25September 2013) f. Extension by the Netherlands (receipt by depositary on 29May 2013) g. Extension by Denmark (receipt by depositary on 28January 2011) h. Extension by United Kingdom (receipt by depositary on 13November 2013) i. Extension by Denmark (receipt by depositary on 28January 2011) j. Extension by United Kingdom (receipt by depositary on 13November 2013) k. Extension by United Kingdom (receipt by depositary on 25June 2013) l. Extension by the Netherlands (receipt by depositary on 29May 2013) m. Extension by United Kingdom (receipt by depositary on 20August 2013)

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108 ANNEXES

Bilateral agreements
Exchange of information agreements signed by Slovenia as at November 2013, in alphabetical order:
Type of EoI arrangement DTC DTC DTC Austria Protocol Azerbaijan DTC Belarus DTC Belgium DTC Bosnia and Herzegovina DTC Bulgaria DTC Canada DTC China (Peoples Rep.) DTC Croatia DTC 26 Cyprus DTC Czech Republic DTC Denmark DTC Egypt DTC Estonia DTC Federal Yugoslav DTC Republic of Macedonia Finland DTC France DTC DTC Germany Protocol Georgia DTC Greece DTC Guernsey TIEA Hungary DTC Iceland DTC India DTC Iran DTC Ireland DTC Jurisdiction Albania Armenia Date signed 27February 2008 11October 2010 1October 1997 28November 2011 9June 2011 6October 2010 22June 1998 16May 2006 20October 2003 15September 2000 13February 1995 10June 2005 12October 2010 13June 1997 2May 2001 15December 2009 14September 2009 15May 1998 19September 2003 7April 2004 3May 2006 17May 2011 6December 2012 5June 2001 26September 2011 26August 2004 4May 2011 13January 2003 20September 2011 12March 2002 Date entered into force 4May 2009 23April 2013 1February 1999 1November 2012 10September 2012 31May 2011 2October 2002 20November 2006 4May 2004 13August 2002 27December 1995 10November 2005 19April 2011 28April 1998 3June 2002 26June 2006 29September 1999 16June 2004 1March 2007 19December 2006 30July 2012 25September 2013 8December 2003 9August 2012 23December 2005 11September 2012 17February 2005 11December 2002

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28

26.

See footnotes 17 and 18.

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ANNEXES 109

29 30 31 32 33 34 35 36 37

Jurisdiction Isle of Man Israel Italy Jersey Korea Kosovo Kuwait Latvia Lithuania

38 Luxembourg 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 Malta Moldova Montenegro Netherlands Norway Poland Portugal Qatar Romania Russia Serbia Singapore Slovak Republic Spain Sweden

54 Switzerland 55 56 57 58 59 60 61 Thailand Turkey Ukraine United Arab Emirates United Kingdom United States Uzbekistan

Type of EoI arrangement TIEA DTC DTC TIEA DTC DTC DTC DTC DTC DTC Protocol DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC DTC Protocol DTC DTC DTC DTC DTC DTC DTC

Date signed 27June 2011 30January 2007 11September 2001 28November 2013 25April 2005 26June 2013 11January 2010 17April 2002 23May 2000 2April 2001 20April 2013 8October 2002 31May 2006 11June 2003 30June 2004 18February 2008 28June 1996 5March 2003 10January 2010 8July 2002 29November 1995 11June 2003 8January 2010 14May 2003 23May 2001 18June 1980 12June 1996 7September 2012 11July 2003 19April 2001 23April 2003 12October 2013 13November 2007 21June 1999 11February 2013

Date entered into force 31August 2012 27December 2007 12January 2010 2March 2006 17May 2013 22November 2002 1February 2002 18December 2002 12June 2003 14November 2006 31December 2003 31December 2005 10December 2009 10March 1998 13August 2004 1December 2010 28March 2003 20April 1997 31December 2003 25November 2010 11July 2004 19March 2002 16December 1981 1December 1997 14October 2013 4May 2004 23December 2003 25April 2007 12September 2008 22June 2001 8November 2013

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110 ANNEXES

Annex3: 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 carrying out a business activity Tax Administration Act Tax Procedure Act

Miscellaneous
Constitution Legal Professions Act

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ANNEXES 111

Annex4: People Interviewed During the On-Site Visit


Representatives of the Ministry of Finance Representatives of the Directorate for the System of Tax, Customs and Other Public Finance Revenues Slovene Negotiation Team Representative of the Office for Money Laundering Prevention Representatives of the Tax Administration of the Republic of Slovenia Deputy Director General Division for Tax Supervision, International Information Exchange and Tax Register Head of the Unit for Data Processing and User Support Representative of the Legal Department Auditor from the Local Tax Office Representative of the Ministry of Economic Development and Technology Representative of the Ministry of Justice Representatives of the District Court and the High Court Representative of the Ministry of the Interior Representative of the Ministry of Education, Science and Sport Representative of the Central Securities Clearing Corporation Representatives of Bank of Slovenia (banking supervision) Representative of the Bar Association Representative of the Chamber of Notaries of Slovenia Representatives of the Chamber of Accounting Services Representatives of the Agency of the Republic of Slovenia for Public Legal Records and Related Services

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ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT


The OECD is a unique forum where governments work together to address the economic, social and environmental challenges of globalisation. The OECD is also at the forefront of efforts to understand and to help governments respond to new developments and concerns, such as corporate governance, the information economy and the challenges of an ageing population. The Organisation provides a setting where governments can compare policy experiences, seek answers to common problems, identify good practice and work to coordinate domestic and international policies. The OECD member countries are: Australia, Austria, Belgium, Canada, Chile, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Luxembourg, Mexico, the Netherlands, New Zealand, Norway, Poland, Portugal, the Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States. The European Union takes part in the work of the OECD. OECD Publishing disseminates widely the results of the Organisations statistics gathering and research on economic, social and environmental issues, as well as the conventions, guidelines and standards agreed by its members.

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Global Forum on Transparency and Exchange of Information for Tax Purposes

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This report contains a Phase 2: Implementation of the Standards in Practice review, as well as revised version of the Phase 1: Legal and Regulatory Framework review already released for this country. 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 reected 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 duciaries, 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 identied 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 jurisdictions 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.

Consult this publication on line at http://dx.doi.org/10.1787/9789264210158-en. This work is published on the OECD iLibrary, which gathers all OECD books, periodicals and statistical databases. Visit www.oecd-ilibrary.org for more information.

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