More tips of the month
Rework your pretended contracts
Changes of the taxation act effective in 2006
Rework your pretended contracts
Subcontractor’s agreements and assignment contracts between companies and private individuals, entrepreneurs or small-sized companies has to be reviewed, if they include such conditions which may refer to an employment relationship with private persons. The moratorium to reform these contracts is going to expire on 30 June 2006. Afterwards, the tax authorities are expected to focus on pretended contracts and to levy hard penalties if they can prove that the contract is an employment contract in fact in spite of its title.
Changes of the taxation act effective in 2006
The changes of the taxation act effective in 2006 were announced on 15 November 2005. Let us, however, call your attention to the fact that the Budget Act for 2006 to be announced on 19 December 2005 might affect the taxation acts effective for 2006, so further changes can be expected.
It's worth paying taxes accurately
The category of qualified taxpayers will be introduced by the Tax Authority as of 1 January 2006. Under the terms of the Act, taxpayers operating for at least three years before the submission of the request with no tax shortfall stated and no judicial enforcement initiated by the Tax Authority within the limitation period before the submission of the request and no application for a payment allowance or a tax abatement are regarded as qualified taxpayers. Companies regarded as qualified taxpayers will enjoy an advantage in public procurement procedures and tax inspections. Taxpayers may qualify for the acquisition of the title "qualified taxpayer" on request.
From 1 September 2005, the 29% social security contribution to be paid on benefits in kind must be paid for the amount including the 44% personal income tax. Should you be planning such a benefit in the near future, it is reasonable to pay it to the employees before 31 August.