The authors explain their initiative by noting that some employers have begun to use this mechanism for tax optimization purposes, disguising wages as such payments and thereby underreporting the total payroll. Although, according to the law, payments from incentive capital may be made once a year.
To prevent incentive capital from being used as an alternative mechanism for paying salaries, it is proposed to abolish it entirely.
It is expected that, if approved, the proposal will take effect upon its publication.
Currently, the law permits the formation of incentive capital from a company’s net profit to reward employees under certain conditions and increase their interest in the company’s effective operations.
By law, these payments are taxed in the same way as dividends. No social security or health insurance contributions are levied on them, and the income tax rate is 6%.
It should be emphasized, however, that incentive capital and a stock option plan are different instruments, differing both in their legal regulation and in their tax treatment.
