PERSONAL INCOME TAX / PRESIDENTIAL DECREE REPEALED
The President has repealed Decree No. 1215 of 18 August 1996 (see our Tax Alert 10/96 on tax enforcement decrees) which put in place a general withholding principle for personal income tax and provided for the imputation of deemed interest income for employers granting loans to employees.
Presidential Decree No. 1325 of 6 September 1996
PERSONAL INCOME TAX / BUSINESS TRIPS / TRAINING OF STAFF
It has been confirmed that, in the absence of documentation to support certain business trip expenses incurred, compensation paid out to employees is subject to personal income tax which must be withheld by the employer. Compensation for other types of business trip expenses, such as meals, taxi rides etc. is considered as taxable income, even if fully documented, if the daily norm is exceeded. Any entertainment element of training expenses in respect of an enterprise's own employees is taxable. If a company incurs expenses for individuals employed under civil law agreements or secondment agreements (i.e. not its own employees) such payments are considered to be income of the individuals and income tax should be calculated and withheld from future payments to the individual.
Letter Of The State Tax Service Of 14 June 1996 No. Vg-8-08/442
DOUBLE TAX TREATIES / RATIFICATION
Double tax treaties with the following countries have been submitted for ratification: Israel, China, Albania, Slovenia, Croatia, Canada, United Republic of Yugoslavia. International treaties are ratified by federal law; after passing through the Duma and receiving approval from the Federation Council, the law must be signed by the President. Most treaties enter into force on 1 January of the year following the year in which they are ratified.
Government Regulation of 24 August 1996 No. 1017
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