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Retrospective: How they will be taxed – The scenarios for returns

Up to 55% «hairstyle»From the tax office will be affected by the retroactive payments they will receive in the near future six months more than 1,000,000 pensioners (as a return on the cuts suffered by their main pensions during the period 11-5-2015 to 12-5-2016).

This is – according to the magazine “Eleftheros Typos” – the scenario that will apply Ministry Finance does not legally intervene to exclude these amounts from the excessive income tax charges and in particular the solidarity allowance provided by Articles 15 and 43A of the current Income Tax Code (Law 4172/2013).

Specifically, «hairstyle»Will vary in percentage from 23% to 55% if the retrospective is normally explained as income of the years 201

5 and 2016, or in percentages from 24.2% up to 54% if they are reported as a one-time income in 2020!

As noted by publication, from the text of the provision of Article 114 of the recently adopted Act 4714/2020, which concerns the payment of retroactive reductions head pensions during the period 2015-2016, it results – directly but clearly – that from these retroactive amounts will be withheld immediately, before they are paid to the recipients, income tax 20%.

Thereafter, the amounts before tax must be indicated by them beneficiaries either in the 2021 income tax return as a one-time income 2020 or as income for the years 2015-2016, by submitting change declarations for the specific years.

THE once Explanation of amounts in the income tax returns 2020 will result in The tax burden in the liquidation in 2021 to increase significantly for the eligible pensioners, as the total taxable income of each, by adding the full retroactive amount, will skyrocket and will “climb»At a higher level tax scale, where income tax rates reach 44%, while the special solidarity allowance amounts to 8%, or even 10%.

In her case retrospective statement, with the submission of amendment declarations for the years 2015 and 2016, the payment of the additional tax and the extra special solidarity contribution that will arise should be made in a lump sum, within one month from the submission of these declarations! Particularly:

1) “clean» amounts of retroactive, before being paid to the beneficiaries, 20% income tax will be withheld in accordance with the provisions of paragraph 60 of Article 60 of the current Income Tax Code (Law 4172/2013).

2) The amount of retroactive will be further reduced due to further taxation that they will be affected this year or 2021, as beneficiaries will be asked to declare them either as a lump sum or with overdue amended income tax returns for the years 2015-2016.


A. Om post declared in a lump sum by the beneficiaries, in the income tax returns they will submit next year, for the 2020 income, thereafter the total “net» post, including amounts not collected due to withholding tax of 20%, is added to the second taxable income from pensions for 2020 resulting in an increase abruptly the total amount of their taxable income.

That is, they will be considered as a whole as taxable income for the year 2020 and will taxed cumulatively, together with the amounts of ordinary pensions received by the beneficiaries in 2020. Their taxation will be double, as it will be based on the extent of the taxation of income from paid services and then based on the calculation scale of the special solidarity allowance.

As a consequence of this development, the recipients of the retroactive payments will be taxed for these retroactive amounts by “cumulative»Tax rates, from 4.2% to 34%.

And this will happen because:

a) Under liquidation of tax statements beneficiaries 2021 to declare 2020 income, these retroactively, as they will be considered taxable income from 2020 from pensions, will be taxed at a tax rate of 22% to 44% of the tax scale applicable to annual pensions over 10,000 euros . Then, from the income taxes that will be in proportion to these amounts will be deducted from the income taxes that have already been deducted by a percentage of 20%, upon their payment, so the additional amounts to be paid income tax that will be confirmed will correspond to percentages from 2% to and 24% on retroactive.

(b) Furthermore, in the amounts of retroactive a special solidarity contribution will be introduced frequency scaling from 2.2% up to 10%.

Hence the final additional fee of retroactive will reach the levels of 4.2% to 34% under the settlement of tax returns to be submitted by the beneficiaries in 2021. If we calculate the original withholding tax of 20%, the total tax burden for the retroactive will eventually reach the levels of 24 , 2% -54%, depending on the total income of each beneficiary.

B. If the retrospective is declared with an amended income tax return for the years 2015 and 2016, the taxable income for each year will increase significantly and additional amounts for income tax and special contributions will arise again. solidarity paid for both 2015 and 2016. For calculation of corresponding taxes on retroactive Cumulative tax rates of 23% to 49% will be taken into account for 2015 (due to the fact that the year’s minimum income tax rate was 22% and a maximum of 45%, while the minimum rate for the special solidarity contribution was 1% and the maximum 4%) and cumulative tax rates at 24.2% up to 55% for 2016 (due to the fact that that year minimum coefficient tax income was 22% and a maximum of 45%, while the minimum special solidarity contribution level was 2.2% and a maximum of 10%).

IN Continuity 20% of the income tax already contained will be deducted from the corresponding tax amounts that will arise, so that the additional tax amounts to be paid will correspond to percentages of 1% up to 29% on the retroactive 2015 and to percentages of 4.2% up to 35% on the retroactive ones in 2016. These additional tax amounts should actually be paid in a lump sum, no later than the following month from the month in which they were submitted and liquidation amending declarations pursuant to Article 5 (1) Code of Public Revenue Collection.

The above results – directly – from the text of Article 114 of the recently adopted Act 4714/2020, which concerns the payment of retroactive payments, as this provision did not contain a paragraph for favorable tax treatment of the specific amounts. Unless such a paragraph is added with its more recent legislative effort Treasury, everything described above will apply.

The addition to a provision for favorable tax treatment of these retroactive is necessary in order not to turn into a failure for the government the whole project of – at least – returning the memorandum to the pensioners. After all, there is a legislative precedent with its retrospective special salary, for which the Government of SYRIZA legislated the payment by Law 4575/2018 without first taking care of their exemption from the excessive burden based on the income tax scale for natural persons – where the rates ranged from 22% to 45% – and a special solidarity allowance – where the rates ranged from 2.2% to 10%.

The result was to show up duty of public to introduce taxes with total tax rates from 24.2% up to 55% on the specific retrospectives.

The disclosure and marking of this issue provoked strong reactions from the recipients results the then government to be forced to legislate gradually the independent taxation of those who are retroactive by 20% and the depletion of another tax obligation, including the special contribution to solidarity.

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