FINANCE

Massive drop in corporate tax takings

massive-drop-in-corporate-tax-takings

Most enterprises will pay reduced tax this year, compared to what they paid in 2020 for their 2019 incomes, according to data from the first declarations submitted and processed, while many more will register losses for the first year of the pandemic.

The health crisis and the extended lockdowns made corporate turnover shrink, so that about eight in every 10 corporations are declaring reduced earnings or losses. Finance Ministry data show some 800,000 enterprises have suffered a financial blow from the pandemic.

The state budget originally provided for corporate income tax takings of 4.48 billion euros, to be revised later to €2.6 billion; now the latest estimates put the expected inflow from companies to state coffers to come to just €2.3 billion, following the decision for the reduction of the income tax deposit this year by about €900 million.

The 2018 corporate earnings that led to taxes of €4.36 billion were followed in 2019 by taxes of €3.4 billion, before losing a further €1.1 billion for the taxes to be collected this year. That means corporate income tax takings this year will amount to just under half of those in 2019, concerning the 2018 corporate earnings.