Amendments to the Law on compulsory social security contributions
The latest amendments to the Law on compulsory social security contributions were adopted on December 14, 2017. The amendments come into force on January 1, 2018.
Nevertheless, most of them will be enforceable on later dates. There are not key changes, most of them are technical, introduced in order to harmonize this law with the latest amendments to the Law on individual income tax.
First of all, it is emphasized that the income which employee obtains from the employer and which is not subject to personal income tax does not constitute the employer’s and employee’s contributions base.
Secondly, the provisions regulating the lowest and the highest contributions base are changed, or, more precise, specified. Amendments also specify payment of contributions for entrepreneur obtaining compensation on the basis of birth and nursing of a child.
As for tax incentives, the amendments introduce new incentive, the same one that is imposed by the latest amendments to the Law on personal income tax. A newly established employer can achieve tax exemption from compulsory social contributions for his own salary, if he has an employment agreement with the entity, or for salaries of maximum 9 newly employed persons, provided that they have graduated from high school or faculty in the last 12 months, or they have been unemployed for at least 6 months.
Also, a new provision regarding payment of contributions for income obtained from employer’s associated enterprise is introduced. In this event, the tax payer is the employee. Furthermore, he is obliged to calculate and pay the contributions himself, in a way prescribed for payment of personal income tax.
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