Text file: 8269.txt
author: Ferenc
downvotes: 4
end consideration date: 2017-05-25
id: '8269'
number comments: 13
number views: 5043
proposal type: Competent authority response
response: "Response from the Ministry of Finance\nWith regard to the proposal received\
  \ proposing to amend the Income Tax Act (ZDoh-2) in relation to the taxation of\
  \ pension annuities from voluntary supplementary pension insurance, we would like\
  \ to start by stating, in general terms and from a tax policy perspective, that\
  \ when assessing the tax treatment of the system of taxation of voluntary supplementary\
  \ pension insurance (VPSI), it is necessary to take into account all the phases\
  \ of the system, i.e. the tax treatment of premium contributions, the income earned\
  \ by the pension fund and the payments from the voluntary supplementary pension\
  \ insurance (VPSI).\nThe Law on Pension and Disability Insurance (ZPIZ-1), which\
  \ introduced the Pensions and Disability Insurance Scheme (PDPZ) as of 1 January\
  \ 2000, regulated, among other things, the payment of PDPZ premiums and tax relief.\
  \ With the reform of the tax system on 1 January 2005, the latter were regulated\
  \ in the tax regulations, and the provisions of the PITI-1 relating to income tax\
  \ ceased to apply on 1 January 2005.  In the Income Tax Act - ZDoh-1 (which entered\
  \ into force on 1.1.2005) and subsequently also in ZDoh-2 (which entered into force\
  \ on 1.1.2007), the relief was determined in the same way as in ZPIZ-1.\nIn general,\
  \ under the current system, the following applies:\n the PIT premiums paid by the\
  \ employer on behalf of the employee are not included in the employee's tax base\
  \ up to a certain amount, or the resident may reduce his tax base by the PIT premiums\
  \ up to a certain amount (Art. 44(1)(2) ZDoh-2 and Art. 117(1) ZDoh-2, Art. 117(1)\
  \ ZDoh-2, Art. Article 2(2) of the Income Tax Act); an employer who pays PIT premiums\
  \ for the benefit of employees is granted a tax base reduction/tax credit of a certain\
  \ amount (Article 65 of the Income Tax Act and Article 58 of the Income Tax Act);\
  \ no corporate income tax is payable on the income of pension funds that collect\
  \ and administer PIT funds (Article 61(2) of the Income Tax Act). Article 50(1)\
  \ of the Social Insurance Act, Article 10 of the Social Insurance Act-1 and Article\
  \ 135 of the Social Insurance Act, all in conjunction with Article 144(3) of the\
  \ Social Insurance Act. Article 144, paragraph 3, of the ZPIZ-2); the entire payment\
  \ is included in the taxable amount for income tax purposes on the lump-sum payment\
  \ of the surrender value of assets contributed to the PDPZ plan, whereas only 50%\
  \ of the income is included in the taxable amount for income tax purposes on pension\
  \ annuities under the said insurance (Article 42, paragraph 3, of the ZD Tax-2).\n\
  Payments of the surrender value of assets contributed to a DB pension plan in a\
  \ lump sum are taxed as other income, while payments of DB pension annuities are\
  \ taxed as employment income under the Income Tax Act-2.\nThe amendment to ZDoh-2H,\
  \ which entered into force on 1 January 2011, provided for a more favourable tax\
  \ treatment of pension annuities compared to lump-sum payments of the surrender\
  \ value, even before the first insured persons under the PDPZ started to receive\
  \ a supplementary old-age pension under that insurance or to request a lump-sum\
  \ payment of the surrender value. Thus, only 50% of the income is included in the\
  \ taxable amount for income tax purposes in the case of the above-mentioned and\
  \ comparable pension annuities from abroad.\nThe less favourable tax treatment of\
  \ lump-sum lump-sum lump-sum payments was intended to destimulate lump-sum lump-sum\
  \ lump-sum payments and to encourage lump-sum lump-sum lump-sum payments in the\
  \ form of pension annuities, since the purpose of voluntary supplementary pension\
  \ insurance is to ensure the social and material security of the individual after\
  \ retirement. Since pension annuities provide income for old age in the form of\
  \ a regular income over a longer period of time, they are better suited to providing\
  \ social security for old age. Thus, from the point of view of providing social\
  \ security for old age, pension annuities are encouraged through their favourable\
  \ tax treatment.\nA pension annuity paid under the PPLA is subject to a 25% income\
  \ tax surcharge and taxable persons are given the option to opt for a reduced rate\
  \ of income tax surcharge on this income, up to a maximum of 16%, if they consider\
  \ that the 25% income tax surcharge is excessive in relation to their annual income\
  \ tax assessment. The taxable person himself may opt for a reduced rate of income\
  \ tax if he considers that the income tax advance will be too high in relation to\
  \ his expected annual income tax. The taxable person must inform the tax authority\
  \ and the payer of the income of his decision.\nWe consider that the tax treatment\
  \ described above is appropriate and that pensioners are not unduly taxed on the\
  \ pension annuity they have saved for during their service, as stated in the proposal.\n\
  \ "
response date: 2018-01-22
response due date: null
sent date: 2017-04-26
title: Unacceptable, unacceptable, obscene tax on pension annuities
upvotes: 14
url: https://predlagam.vladi.si/predlog/8269
