SOCIAL SECURITY

Retroactives’ automatic tax deduction

retroactives-automatic-tax-deduction

The government is considering the submission to Parliament of a regulation that would abolish the 100-euro fine imposed on the belated submission of amending declarations for the retroactive amounts paid toward pensions, following a strong reaction by pensioners.

Athens is also mulling the imposition of a 20% tax deduction on retroactive payments to retirees, which could increase to 25% or 30% for larger amounts.

Although no final decision has been made, the government wishes to put an end to the income amending declarations that recipients of retroactive payments have to submit today, with the tax rate of the year those incomes refer to.

That way, the deduction will be made automatically by the tax authorities before the money is credited to recipients, and they will have no further tax obligations on those amounts.

The main reason the government is thinking of abolishing the fine is the fact that thousands of pensioners had received no notification from the entity about their payment regarding the transfer of the retroactive dues to their bank accounts back in 2015 or 2016, therefore they were not aware of the fact they had collected retroactive dues.