A reduction in the corporate tax rate from 22 to 21 percent, and the scrapping of mandatory health insurance contributions from dividends and replacing them with a tax totalling 7 percent are among the changes to be introduced by an amendment to the income tax law approved by Parliament. Retroactive dividend taxation, which was heavily criticised by employers, will be abandoned as well. "The amendment is aimed at improving the business environment and increasing the motivation to pay taxes," the Finance Ministry said in a statement.
The amendment also increases the ceiling for the flat rate expenditures of self-employed citizens. In line with the new rules, the self-employed will be able to claim for flat rate expenditures up to 60 percent of total costs, with a maximum of €20,000 annually.
The amendment is set to toughen sanctions if the result of a taxpayer's activities is the deliberate circumvention of a tax obligation. Conversely, sanctions for taxpayers should be eased if they pay their fines on time. "These are measures aimed at combating tax evasion and letterbox companies," the ministry communique said.
The salaries of constitutional officials, MPs and Government ministers, but not judges and prosecutors, will remain frozen in 2017, according to an amendment to the law on the salaries of some constitutional officials which was approved at the same sitting of Parliament.
