Amendments to the Law on Vehicle Operation Tax and Company Car Tax will come into force on 1 January 2016 and includes a number of clarifications in the tax administration, as well as additional exemption from (to) Company Car Tax (CCT).
Starting with 1 January 2016, the Company Car Tax will not be charged for an individual's vehicle which is being used on the basis of lease contract and on which from the person when paying the rental fee, the personal income tax is withheld according to the procedure prescribed by law “On Personal Income Tax”.
Personal Income Tax should be withheld at source from lessor by the lessee in case if the lessor of cars is not registered with the State Revenue Service (SRS) as a performer of economic activity.
By contrast, if the lessor is registered with the SRS, the tax from the remuneration paid should not be withheld because the tax shall be calculated and paid by the lessor himself, which is a fairly common practice. Currently, it is not clear whether the legislator from the scope of the exemption has deliberately turned off the last payer category or in the future, this situation could be corrected.
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