Expected changes to income tax
The Ministry of Finance submitted to the professional public an outline of the changes to income tax to be implemented in the future for comments and discussion. The substance of the changes is mainly regulations which should come into effect on 1 January 2017 and a proposal relating to the new tax regime concept for public service organisations, the implementation of which will occur over the long term. The outline of changes indicates that no fundamental reforms are planned in the area of income tax but only certain discrepancies or ambiguities in the current Income Tax Act are to be solved. We describe briefly below some of the topics relating to the planned changes:
- A new tax regime concept for public service organisations;
- A new comprehensive solution to regulating the taxation of gratuitous income;
- Regulations relating to the tax aspects of joint shares, in particular, their increas;
- Extending financial leasing to intangible asset;
- Limiting the possibility of not taxing revenues related to tax non-deductible expenses in such a way that it will concern only revenues from expenses transferred from other accounting records;
- The tax regime for advance payments on profit sharing;
- The possibility of taxing income from small-scale dependent activity with a withholding rate;
- Restricting the possibility of deductions from the tax base of dependent activity claimed for research and development; and
- Regulations concerning the possibility of collecting taxes and the taxation of some income of non-resident.
In addition, the outline summarises the suggested changes that are in the phase of approval, and their effectiveness is planned for 1 January 2016. Examples include:
- Adjustment of taxation for profit sharing paid to a person other than members of a company;
- Creation of tax reserves related to contributions for the liquidation of solar panels;
- Adjustment of the criteria defining the basic investment fund that applies the concessionary 5 per cent tax rate (proposed effectiveness in 2015);
- Increases in tax relief for children; and
- Exemptions for pension income paid for at least 10 years.
