SLOVENIA Law and Practice Contributed by: Blaž Ogorevc, Miha Štravs and Blaž Murko, Odvetniki Šelih & partnerji, o.p., d.o.o.
In addition to the foregoing, construction agree - ments commonly require that the contractor delivers bank guarantees, either for good perfor - mance, return of the advance payment or reme - diation of defects during the warranty period. 7.4 Management of Schedule-Related Risk Construction contracts commonly foresee con - tractual penalties for delays in the execution of works. The contractual penalties are typically foreseen not only in case of delays in the com - pletion time, but also penalise delays to (certain) interim milestones. 7.5 Additional Forms of Security to Guarantee a Contractor’s Performance It is common for investors to seek additional forms of security to guarantee the contractor’s performance on a project. The most common forms of security are (different) bank guarantees, bills of exchange, enforcement notes, parent company guarantees, retained amounts, etc. 7.6 Liens or Encumbrances in the Event of Non-payment Although possible, it is very uncommon for contractors and/or designers to encumber real estate in the event of non-payment by the inves - tor. Such encumbrance would be possible only upon explicit agreement between the contrac - tor/designer and the investor as the owner of real estate and would need to be perfected in the land register. In such case, removal from the land register would be possible based on a deletion permit issued by the contractor/designer. 7.7 Requirements Before Use or Inhabitation Where a building permit had to be obtained before the commencement of the construction project, it is also necessary to obtain a use permit
upon its completion. A use permit is a decision issued by the administrative unit authorising the use of the building. In certain more complicated constructions, a successful technical inspec - tion is also one of the conditions for obtaining the use permit. In instances of certain specific commercial uses, additional permits may also be required.
8. Tax 8.1 VAT and Sales Tax
VAT is payable in certain (but not all) sale and purchases of real estate. The sale and purchase of real estate is taxed with VAT only if the seller is a taxable person identified for VAT purposes. Moreover, VAT may be applied depending on the type of real estate being transferred and whether the parties opt into VAT treatment of the trans - action. As to types of real estate being transferred, the supply of land is exempt from VAT; however, the supply of (empty) building land is subject to VAT. Furthermore, the supply of buildings or parts of buildings and land on which the buildings are located is also exempt from VAT, unless the sup - ply is made before the buildings or parts of the buildings are occupied or used for the first time, or if the supply is made before two years have elapsed from the beginning of the first use or first occupancy. Nevertheless, if the buyer is also a taxable person identified for VAT purposes with the right to deduct input VAT, the parties may opt into VAT treatment of the transaction, even though the supply would otherwise be exempt from VAT. VAT must be paid by the buyer. However, the buyer may deduct the amount from input VAT and demand reimbursement from the state,
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