# Slovenia Tax Guidance for US Expat



## teksmith (Jan 19, 2021)

I am currently a US citizen working in the US. I am looking at places to move when we retire in a few years.
My wife and I really like Europe and are looking at places like Portugal, France, Italy, and Slovenia.
Does anyone know how Slovenia will tax my retirement income?
I don't expect to earn any other income once we retire, but need to understand how Slovenia will tax my retirement income.
My retirement income will come from the following sources:
1. 401K
2. 401K Roth
3. IRA's

Thanks!


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## 255 (Sep 8, 2018)

teksmith -- See Articles 18 & 19 of the following tax treaty: TAX CONVENTION WITH SLOVENIA (irs.gov) Cheers, 255


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## Moulard (Feb 3, 2017)

The tax treaty of course only tells you who has the primary right to tax the income, but not how Slovenia, would tax it under its domestic tax laws - which I had assumed when I saw the post was the crux of the question.. The technical explanation of the treaty parses diplomatic language and may be easier for you to follow when read alongside the treaty..






Slovenia Treasury Explanation | Internal Revenue Service


Department of the Treasury Technical Explanation of the Convention Between the Government of the United States of America and the Government of the Republic of Slovenia for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital




www.irs.gov





But by way of a shortcut 

Article 18(1) deals with private pensions - encompassing payments made by private retirement plans and arrangements in consideration of past employment for any non-government employer. According to the tax treaty, once you are a tax resident of Slovenia, it would have the primary right to tax the distribution (either periodic distributions or lump sums) 

As to how it is taxed.... according to The Republic of Slovenia pensions distributions would be taxed as ordinary income at a progressive rate between 16% and 50% depending on your total taxable income

Assuming that you are either a US citizen or green-card holder, you do need to bear in mind that the Savings Clause in Article 1(4) allows the US to continue to tax your private pensions as if the treaty were not in effect. Per Article 23 of the treaty, you would be able to claim a foreign tax credit for Slovenian taxes paid.

As to other sorts of Pension income that could be in the mix... but that you do not mention directly...

Article 18(2) deals with public pensions (a pension paid from public funds for anything other than government service ... things like US social security benefits) - only taxable by the country making the payment. This is in essence a means for the country to recoup benefits paid through the tax system.

Article 19(2) deals with government service pensions - ie a pension paid from public funds in light of services rendered at a Federal, State, to a governmental agency - either as an employee or as a contractor to a government body. This would only be taxable by Slovenia if you were to become a citizen or gained permanent residency rights.


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## teksmith (Jan 19, 2021)

Moulard said:


> The tax treaty of course only tells you who has the primary right to tax the income, but not how Slovenia, would tax it under its domestic tax laws - which I had assumed when I saw the post was the crux of the question.. The technical explanation of the treaty parses diplomatic language and may be easier for you to follow when read alongside the treaty..
> 
> 
> 
> ...


Your answer is more aligned with what I was looking for. Thanks.
Let's consider a hypothetical.
How much tax would I have to pay to Slovenia if I were a resident there and my income was as follows:
$70K a year from 401K
$30K a year from 401K Roth
$50K a year from US Social Security

Thanks in advance for any help on this.


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## Moulard (Feb 3, 2017)

100k in private pensions taxable by Slovenia under Article 18(1) and the US under the savings clause
50k in public pension taxable only by the US under Article 18(2)

Difficult to say how much tax you would actually pay.. You would need to delve into domestic Slovenian tax rules.

While your US Social Security payments would not be taxable by Slovenian, The key question is how US Social Security payments affect the taxation of your private pension income.

Is the 100k taxed as if you had a total income of 100k; (ie the 50k is excluded from your assessable income) or ..
is the 100k taxed at your true income of 150k. (ie the 50k is NOT excluded but is simply not assessed)

I can't answer that.


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## DannyIII (6 mo ago)

Moulard said:


> 100k in private pensions taxable by Slovenia under Article 18(1) and the US under the savings clause
> 50k in public pension taxable only by the US under Article 18(2)
> 
> Difficult to say how much tax you would actually pay.. You would need to delve into domestic Slovenian tax rules.
> ...


Are you sure Slovenia treats US Social Security payments as a "public pension" and not taxable? From what I've been able to determine both Portugal and Spain consider them "private pensions" since they originate from employment at private companies. They both tax them.


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## Bevdeforges (Nov 16, 2007)

Depends on the tax treaty. Some of them (like France) recognize US SS as a public pension and does not tax it (or rather offers a full tax credit at French rates, which is much the same thing).


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