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The General Directorate of Taxes would like to remind to all taxpayers that amendments have been made to the Law No. 39/2018, dated 09/07/2018 “On some amendments and addenda to the Law No. 8438, dated 28/12/1998 “On income tax”, as amended, (published in the Official Journal No. 134, dated 18/09/2018).
A very relevant amendment reflected in Article 33/1 “Submitting the decision on the approval of the annual result and income destination”, is the removal of the obligation from the “Natural Person” entity to submit a decision on dividend distribution, regardless of the tax liability, given that the Natural Person, as per the definition of the trade law, has no legal personality and shall be responsible with all its assets.
In a summary, the amendments consist in two aspects:
Such regulations are due to the reflection of the amendments made in the Instruction No. 5, dated 30/01/2006 “On income tax”, as amended, which in its paragraph 2.3.9 stipulates that: “The income of the natural trade person from the trade activity shall be taxed only pursuant to Chapter III “Income tax” (Articles 16-32 of the Law) in case of entities with a turnover above ALL 8 million a year and pursuant to the Law No. 9632, dated 30/10/2006 “On local tax system”, as amended, for entities with a turnover up to ALL 8 million a year. The natural trade person shall not have a legal personality different from the individual (registered as a trader), compared to the case of trade companies and its individual shareholders and, therefore, the net income of the natural trade person shall not be considered as a personal taxable income of the individual, subject to paragraph “g” of Article 8 of the law”.
The General Directorate of Taxes is committed to accurately and timely inform the taxpayers in order to correctly fulfil their tax liabilities.