Planned tax changes in 2020

On 27 August, the Government adopted the 2020 budget bill draft (the “Draft”). The budget should be balanced, with revenues and costs planned on the same level. According to the budget assumptions published by the Council of Ministers, the State budget revenues in 2020 will be determined mainly by the condition of the economic environment and continued efforts to seal up the tax system.

The implementation of these assumptions is to be facilitated, among other things, by certain amendments to the tax regulations. The Draft refers to the following planned changes to the tax and social insurance regulations:

1. Lifting the cap on the annual age and disability pension insurance premiums;
2. Substituting the existing special VAT settlement mechanisms based on reverse charge and joint-and-several liability with a mandatory split payment mechanism;
3. Excluding the entities doing business in fraud-sensitive industries from the group eligible for VAT exempt status;
4. Increasing excise tax rates on alcoholic beverages, tobacco products, cured tobacco and innovative products;
5. Imposing taxation on e-cigarette liquids and innovative products;
6. Modifying the General Anti-Abuse Rule and amending the Mandatory Disclosure Rules on tax arrangements;
7. Imposing taxes on unrealized capital gains of the entities that move their assets, tax residency or permanent establishment abroad;
8. Implementing Employee Capital Plans and revamping the Open Pension Funds’ business model.

We will keep you informed about the planned changes of tax regulations.

Please contact us for assistance if any of these planned changes raise your concerns.