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The Romanian Constitutional Court (CCR) postponed, on Tuesday, a decision on notifications from the Ombudsman and the High Court of Cassation and Justice (ICCJ) regarding the law on the new system of taxation of service pensions.
The Constitutional Court has once again postponed by up to 85% the sentence on the unconstitutionality exceptions formulated by the Ombudsman’s Office and the Superior Court of Cassation and Justice (HCCJ) in relation to the taxation of special pensions by up to 85% , by Dec. 15, sources informed News. in.
On June 18, the United Sections of the Superior Court of Cassation and Justice decided to refer the matter to the Constitutional Court on the law that establishes a new system of taxation of retirement pensions.
The Supreme Court alleges that the Law that modifies and completes Law 227/2015 of the Fiscal Code is unconstitutional as a whole, for violating the provisions of various articles of the Constitution.
The ICCJ indicates in the decision of the CCR that one of the five principles of taxation regulated by the Tax Code is “tax justice or fiscal equity”, which “ensures that the tax burden of each taxpayer is established on the basis of the tax power respectively according to the size of your income or property. “
“The fair and equitable solution of the tax burden constitutes one of the components of the rule of law, as defined by the Romanian State in article 1, paragraph 3, of the Constitution. (…) In the jurisprudence of the Constitutional Court It has been systematically argued that the State has a wide margin of appreciation in the establishment of fiscal policy and it is the exclusive competence of the legislator to establish the amount of taxes and grant exemptions or exemptions from these obligations in favor of certain categories of taxpayers and certain deadlines. , subject to compliance with article 56 of the Constitution on the fair liquidation of tax burdens, ”the sentence reads.
The Supreme Court observes that the law that is the subject of the notification establishes the income tax for pensions and old-age benefits established on the basis of special laws, establishing the legislator “a new tax regime applicable only to certain income, namely, income for pensions and / or old-age benefits received on the basis of special laws / statutes “.
The law establishes an income tax for pensions regulated by special laws that is different from the income tax and accumulates with the latter, which means that both the income tax, which is subject to taxation according to the criticized law, applies to this income category. “It follows that pensions covered by the law are subject to double taxation, contrary to the principle of non-discrimination and the principle of fair and equitable taxation,” says the ICCJ.
According to the Supreme Court, the new “tax” is not only discriminatory and represents a “disguised” income tax, but is practically calculated on net pension income, after deducting income tax from the gross pension. , which would lead to a certain level, a tax rate calculated on the gross pension of 95%.
“Under these conditions, due to the high amount, the taxation measure is a real confiscation and is likely to affect the very substance of the law. The option promoted by the law in question is a subterfuge that damages the very substance of the law. pension, “he said. remission.
The ICCJ also shows that, referring to the amount of 7,000 lei of the amount not subject to the criticized tax, the taxation is directed to a limited category of taxpayers who obtain income from pensions and old-age benefits under the conditions of special laws.
The Supreme Court also accuses the violation of the principle of clarity, predictability and predictability of the law, the principle of independence of the judges, as well as the violation of the principles of art. 1 of Protocol no. 1 the ECHR.
Another argument is that the notified law was first submitted to debate and adoption by the Senate, with the Chamber of Deputies being the decision-making body, which contradicts the constitutional norms that establish another procedure in terms of the regulations on the condition of judges and prosecutors. .
The Ombudsman notified the RCC about the taxation of special pensions
The Ombudsman also sent the Constitutional Court a notification on the same normative act.
On June 17, the Honorable Chamber of Deputies voted to reform and complement Law 227/2015 of the Tax Code, which aims to regulate the establishment of an income tax and age limit benefits.
According to an amendment, pensions with a value of up to 2,000 lei inclusive are not taxed, those between 2,000 and 7,000 are taxed at 10%, and pensions with a value greater than 7,001 lei are taxed at 85% for whatever exceeds This quantity. .
