Slovenia targets economic and healthcare reform with proposed Intervention Development Act

What businesses and employers need to know

The change in the Slovenian political environment signals a new approach to the economy

Although a new government has yet to be formed in Slovenia, political parties are advancing initiatives aimed at easing the tax burden on the economy. The proposed Intervention Development Act, if approved by Parliament, would introduce wide‑ranging tax relief for companies, entrepreneurs, and highly skilled workers. While it remains uncertain whether these measures will ultimately be adopted in their current form, the underlying policy considerations are expected to continue to feature prominently in the political debate.

1. Background

Following the general election held on 22 March 2026, Slovenia remains without a formed government. On 25 April 2026, President Nataša Pirc Musar announced that she would not nominate a candidate for Prime Minister. The initiative now shifts to Parliament, which has a 14‑day window to propose a candidate.

In this context, the Slovenian Democratic Party (SDS), led by Janez Janša and currently the frontrunner to form a government, has tabled a bill aimed at streamlining the structure of government. The bill is scheduled to be voted on Wednesday, 29 April 2026. Observers view the voting behaviour of the parliamentary parties as a key indicator of whether a centre‑right government led by Janez Janša is likely to emerge in the near term.

Separately, several centre‑right parties have taken the initiative to propose an Intervention Development Act, which Parliament is expected to vote on before a new government is formed. The primary objective of the proposed legislation is to deliver consumer and business relief measures promised during the election campaign. The bill has received support from the Slovenian Chamber of Commerce, stating that this is a first step towards reducing the tax and social security contribution burden on companies, which in Slovenia is seen as a constraint on economic development. The bill has attracted criticism from parties on the political left, who argue that it may jeopardise fiscal stability and disproportionately benefit higher‑income groups.

2. Key tax relief measures

The proposed Intervention Development Act aims to address the energy crisis by temporarily lowering VAT from 22 % to 9.5 % on the supply of energy, including electricity, natural gas, district heating and firewood. If adopted, the reduced rate would apply from 1 July 2026 to 31 March 2027.

In the food sector, a reduced VAT rate of 5 % would apply to 15 key food items. If adopted, the measure would take effect two months after the Intervention Development Act enters into force.

In the real estate sector, the personal income tax rate on rental income shall be reduced from 25 % to 15 %. Where the rental property is an apartment or a house leased to an individual supporting a child or to a person under the age of 30, the applicable tax rate is further reduced to 5 %. If adopted, the lowered income tax rate would apply from 1 January 2026.

For both employers and employees, the Act proposes a cap on the social security contributions at EUR 7,500 (razvojna kapica).Contributions would be calculated and paid only up to this threshold, with no levies applying to income above it. The measure is intended to strengthen the retention of highly skilled workers by increasing net earnings and to incentivise higher wage levels. If adopted, the cap would apply from 1 July 2026.

It further proposes a higher threshold for qualifying for the flat-rate expense taxation regime for sole proprietors. The threshold for reporting flat-rate expenses would increase from EUR 30,000 to EUR 70,000 for part-time workers (popoldanski normiranci) and from EUR 60,000 to EUR 150,000 for full-time workers (polni normiranci).

This change would align with broader reforms in the healthcare sector, as it is intended to incentivise a larger pool of healthcare professionals to take on additional contracted work enabled under the reformed system.

3. Key changes in the healthcare sector

3.1 Bridging the gap between the public and private healthcare sector

Healthcare professionals employed in public healthcare institutions may work part-time in the private sector (up to 8 hours per week), subject to prior approval by the director of the public institution. However, obtaining the required approval under the current system is difficult. If a decision on the application is not issued within 30 days of receipt, approval is deemed not to have been granted. As a result, many healthcare professionals may apply but might not be granted the necessary approval.

The Intervention Development Act proposes a simplification of the approval procedure for part-time work in the private sector. Under the proposed system, if the director of a public healthcare institution does not issue a decision within 30 days of receiving the application, consent is automatically deemed to have been granted.

The two sectors would become further interconnected, as public healthcare institutions would also be able to engage healthcare professionals or associates operating as private sole proprietors, provided that:

• the nature of the work cannot be arranged through regular employment (due to its occasional nature or limited scope);
• it involves a one-off expansion of the programme for the purposes of compulsory health insurance; or
• the public institution cannot fulfil its contract with the Health Insurance Institute of Slovenia using its existing staff.

The proposed changes in the healthcare sector aim to retain key professional and highly qualified personnel by allowing them to work (part time) in the private sector without previous restrictions, while continuing their employment in the public sector.

Likewise, the restriction on the director of a public healthcare institution would be lifted, allowing them to also act as a healthcare provider, including undertaking supplementary work with a concession holder.

3.2 Lifting restrictions for the concession holders

One of the most significant proposals of the Intervention Development Act is to allow concession holders providing healthcare services under a concession to operate on a for-profit basis. Under current legislation, they are required to reinvest any surplus revenue into the performance and development of healthcare services. Under the new proposal, this requirement would apply only to public healthcare institutions.

Furthermore, concession holders would be allowed to engage healthcare workers or healthcare associates operating as sole proprietors, without restrictions, to cover for absent healthcare staff. This measure will also help address the staffing shortage in the healthcare sector.

4. Key changes for employers

4.1 New approach to retirement

The Intervention Development Act reforms the rules on employees working after meeting retirement eligibility conditions.

Under the new proposal, an employment contract terminates by operation of law on the day the employee meets the old-age pension eligibility conditions, with a statutory severance payment.

However, the Act proposes that the employee may submit a written proposal to continue the employment relationship without interruption no later than 90 days before reaching retirement age. This would introduce a dual status for pension recipients. An individual who has met the conditions for an old-age pension and continues working or re‑enters the workforce will simultaneously hold the status of insured person and pensioner, with the pension paid in full. This is highly relevant for businesses in sectors with workforce shortages, as it removes the current financial disincentive for retirees to remain in or return to employment.

If the Intervention Development Act is adopted, offer letters and termination procedures would need to be adjusted to reflect the new framework for employment after reaching retirement age.

It is important to note that if the employer rejects the proposal without justified reasons, the employee may seek judicial protection.

4.2 Limited liability of the employer for damages caused

The Intervention Development Act proposes to cap compensation claims that the Health Insurance Institute may bring against an employer for damages caused to an employee. Under the new proposal, such claims may be brought only for:

• damages resulting from gross negligence of the employer (where previously any form of negligence was sufficient); and are
• limited to a maximum of twenty times the minimum pension base.

This provision is intended to improve predictability in companies’ risk assessments and will take effect upon the Act’s adoption and publication in the Official Gazette of the Republic of Slovenia.

5. Outlook

Although the Intervention Development Act has not yet been adopted, it is expected to be discussed among the upcoming items on the agenda of the Slovenian National Assembly. While the draft bill reflects policy priorities advocated by several political parties, its adoption in the proposed form remains uncertain, particularly in light of ongoing discussions regarding the current state of public finances and the evolving political landscape. Even if the Act were not approved as currently drafted, the underlying policy topics it addresses—most notably tax relief, limitation of social security contributions, and economic competitiveness—are likely to remain part of the broader political debate in the period ahead.