Key Changes to the Lump-Sum Expense System for Sole Proprietors (s.p.)

On 11 November 2025, the National Assembly of the Republic of Slovenia adopted, under an urgent procedure, the Act on the Right to a Winter Payment and the Reform of the Determination of the Tax Base Taking into Account Lump-Sum Income. The novelties introduced by the Act for lump-sum expense sole proprietors apply already to the 2026 tax year. The key changes are presented below.

1.     Entry into the Lump-Sum Expense System

A taxpayer who wishes, for the year 2026, to switch from determining the tax base based on actual expenses to determining the tax base using lump-sum expenses may do so provided that their revenues in 2025:

• do not exceed EUR 50.000 (previously EUR 30.000), or

• do not exceed EUR 120.000 (previously EUR 60.000), and the taxpayer was compulsorily insured on the basis of self-employment for full-time work continuously for at least 9 months.

An important novelty is that a taxpayer who exited the system in the past or ceased performing an activity may re-enter the lump-sum expense system only after five tax years have elapsed, whereby the tax year in which the activity ceased is not taken into account.

2.     Exit from the Lump-Sum Expense System

A taxpayer will be required to determine the tax base on the basis of actual revenues and actual expenses and to keep appropriate accounting records, if the average of their revenues for the two consecutive preceding tax years exceeds:

• EUR 120.000 in the case where the condition of compulsory insurance based on self-employment for full-time work continuously for at least 9 months is met in both tax years (»full-time sole proprietor« in both preceding years),

• EUR 50.000 in the case where the condition of compulsory insurance based on self-employment for full-time work continuously for at least 9 months is not met in both tax years (»part-time sole proprietor« in both preceding years),

• EUR 85.000 where the conditions from the first and second indents are not met (one year as a »full-time sole proprietor« and the other year as a »part-time sole proprietor«).

  
  

These conditions are already taken into account for exit in 2026, based on the average revenues for the years 2024 and 2025.

When calculating the average revenues for the purpose of exiting the lump-sum expense system, the tax year in which the taxpayer did not perform any activity is now also taken into account, whereby revenues for that year are considered to be zero. In the case of high revenues in the first year of operation, this may result in the taxpayer being required to exit the lump-sum expense system already after the first year.

3.     Change in the Tax Rate for Taxpayers Determining the Tax Base Using Lump-Sum Expenses

For the 2026 tax year and onwards, the tax rate changes for taxpayers who determine the tax base using lump-sum expenses.

Ø  Taxpayers compulsorily insured on the basis of self-employment for full-time work continuously for at least 9 months (Full-time sole proprietor)

The personal income tax rate on the tax base (revenue minus lump-sum expenses) amounts to 20% up to EUR 72,000 and 35% on the amount exceeding EUR 72,000.

The lump-sum expenses are determined and gradually phased out as follows:

Full-time sole proprietor
Revenue	Expense flat-rate deduction
up to EUR 60.000	80%
over EUR 60.000	0% on revenue over EUR 60,000

“Part-time sole proprietors” or taxpayers who do not meet the condition of compulsory insurance based on self-employment for full-time work continuously for at least 9 months (Part-time sole proprietor)

The personal income tax rate on the tax base (revenue minus lump-sum expenses) amounts to 20% up to EUR 33,000 and 35% on the amount exceeding EUR 33,000.

The lump-sum expenses are determined and gradually phased out as follows:

Part-time sole proprietors
Revenue	Expense flat-rate deduction
up to EUR 12.500	80%
EUR 12.500 EUR to EUR 30.000	40% on revenue over EUR 12.500
over EUR 30.000	0% on revenue over EUR 30.000

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