Question of the day

The general basis of tax practice has been supplemented by SFS Order No. 326 of 14.6.2021 with information on how to grant exemptions to natural persons going on maternity leave.

The SFS notes that in accordance with the provisions of Articles 33 to 35 of the Fiscal Codeevery taxpayer (resident natural person) is entitled to an annual personal exemption, an annual exemption for each person maintained in the size of the indicator provided for in that Article.

The tax regime and method for determining the income tax on the salary and other payments made by the employer for the benefit of the employee are laid down in the Regulation on the deduction of income tax from salary and other payments made by the employer for the benefit of the employee and from payments made for the benefit of natural persons not engaged in business activity, approved by Government Decision No 697 of 22 August 2014.

Therefore, in accordance with point 48 of that regulationwhen the last taxable payment (salary, prize, etc.) is made to the employee going on maternity leave (which includes prenatal and postnatal leave), the income tax is withheld by granting the exemptions requested:

— if the person considers himself/herself employed since the beginning of the tax year – for 12 months;

— if the person has taken up employment during the tax year – for the number of months during which he considers himself to be employed, from the month following that in which he took up employment and submitted the application for the exemptions until the end of the tax year.

If the person concerned returns to the service in the tax year in which the maternity leave payments were paid, the income tax on the subsequent payments shall be deducted from the total amount of the exemptions granted when the maternity leave payments were paid.

If the person on maternity leave withdraws his application for exemptions at the end of the tax year, the employer must recalculate the income tax withheld by granting him only the amount of the exemption to which he is de facto entitled.

[Amendments made pursuant to the approval of Government Decision No 970 of 3.10.2018 in force 1.10.2018]

Source: bizlaw.md