Somehow imperceptibly we approached the end of this year as well. The month of December is particularly interesting for employers and there are many challenges before them. In full force, this applies to staff payroll employees. For them, the procedure for preparation and execution of annual taxation /equalization/ of income from employment relations has started. As part of this procedure, the Personal Income Tax Act – Personal Income Tax Act regulates the right of workers and employees, upon their declared desire, to benefit from tax benefits at their main employer. The practice imposed as a very useful sequence of steps to be followed in order to achieve a correct and problem-free performance of the procedure.
1. Preliminary preparation by the employer, in the person of the employees making the salaries:
1.1. the persons with TELK decisions are inventoried – all persons who have a valid TELK decision, have used a current tax preference or will use one in the annual taxation, must be notified and submit within a period of 30.11.2022 – to 31.12.2022 a Declaration of lack of public obligations or a Declaration of Commitment to submit a Tax Declaration under Article 50 of the Income Tax Act. If the person does not provide one of the two declarations, the employer is obliged to recalculate the tax withheld from the persons during the annual taxation, as they lose their right to tax preference.
1.2. the persons who entered the enterprise during the year are inventoried – all must be provided with an official note according to Art. 45, paragraph 1 of the Income Tax Act for income received in 2022 from a previous employer. This is in the exclusive interest especially of individuals to certify sufficient taxable income in an annual aspect in order to enjoy a tax preference in full.
1.3. all persons who have used current / monthly / preference for additional health or life insurance with the employer are inventoried. They are also obliged to present to the employer, within the period from 30.11.2022 – to 31.12.2022, a Declaration of the absence of public obligations or a Declaration of commitment to submit a Tax Declaration under Article 50 of the Personal Income Tax Act. If the person does not provide one of the two declarations, the employer is obliged to recalculate the tax withheld from the persons during the annual taxation, as they lose their right to tax preference.
1.4. It is good to inform the company’s workers – in detail and correctly – about the conditions and circumstances under which they can enjoy tax benefits from the employer, such as sufficient taxable income from 2022, i.e. persons in maternity and long-term sick leave and unpaid absences should do the necessary check.
2. Declarations for the use of tax benefits and the accompanying mandatory documents shall be submitted to the employer within the period from 30.11.2022 to 31.12.2022.
3. The employer is not responsible for the information declared by the persons, but it is his duty to control whether all the details have been filled in, whether all the mandatory accompanying documents have been attached and, last but not least, whether the children for whom a preference is declared meet the conditions – to be no more than 18 years old, completed in the year of using the preference – in this case 2022.
4. The employer performs and calculates the result of the annual taxation in the payroll for the month of December 2022, within a period of 31.01.2023.
Electronic application and approval of absences: https://youtu.be/BcykR8qv0cs
Raya Stoimenova – expert TRZ
Employee Adasoft OOD
23.11.2022
