As an element of the changes in the tax laws submitted in the framework of the Economy Protection Action Plan, the social contribution tax and the simplified contribution to public revenues will decrease from 19.5% to 17.5% from 1 July 2019. The relevant bill was approved by the Parliament on 12 June 2019.

In connection with the decrease of the rate of the social contribution tax, the Personal Income Tax Act has also been amended. If a private individual is required to pay social contribution tax after his or her income, then in the future, 85% of the income will have to be considered as the tax base (instead of the current 84%).

As a result of the change of the social contribution tax in the middle of the year, the basis of the benefits for small taxpayers has also been changed. With a view to the fact that, within the itemised tax payment obligation the share of the social contribution tax will decrease, the part of the tax corresponding to individual contributions will increase.

As part of the summer tax package, in addition to the above, two other bills are also going to be put on the agenda of Parliament for debate and voting. The amendments proposed in these, however, typically contain changes in the tax regime applicable from 2020. We will inform our clients about the most important elements of these amendments after their parliamentary approval.

We do hope that we could be at your service with this information. Should you have any further queries, please feel free, to contact us!