Minister of Finance on outstanding social and health contributions
Payment by the payer of contributions of overdue social security contributions and health contributions relating to employees, contractors, former employees or contractors does not give rise to income on the part of these taxpayers, according to a general interpretation by the Minister of Finance of 30 March 2023 (No. DD3.8203.1.2023).
The Minister also emphasised that the payment by the payer of the said overdue contributions does not constitute an asset gain increasing the taxpayer’s assets and cannot be considered as a gratuitous benefit for the taxpayer.
Consequently, payment by the payer of the outstanding social and health contributions should be considered as a tax-neutral activity for the taxpayer. Thus, the payment of these contributions does not create on the part of the payer the status of a PIT payer and the information obligation referred to in Article 42a of the PIT Act. At the same time, it must be remembered that the overdue contributions will not be a tax cost on the part of the payer of these contributions.
– The position presented by the Minister of Finance in the general interpretation is consistent with the presented and uniform approach in administrative courts. The interpretation is favourable for PIT taxpayers (employees, contractors), but not favourable for employers as the overdue contributions cannot be deducted for corporate tax purposes – assesses Adam Allen, tax adviser, partner at Thedy & Partners.