Romania's Constitutional Court says progressive taxation of special pensions breaches Constitution

Romania's Constitutional Court (CCR) admitted on Tuesday, December 15, the objections expressed by the Ombudsman and the High Court (ICCJ) to taxing special pensions by up to 85%, Profit.ro reported.

A draft law provisioning the progressive taxation of the so-called "special pensions," namely those not backed by the recipients' past contributions, was passed by the lawmakers but referred to the Constitutional Court by the Ombudsman and ICCJ.

Therefore, the law was declared unconstitutional and will return to Parliament to be revised in line with the CCR's decision.

On June 17, the Chamber of Deputies passed the law on special pensions taxation by up to 85%, a decision supported by all major political parties. Thus, a tax rate of 10% will be applied to pensions between RON 2,000 (EUR 400) and RON 7,000 (EUR 1,400), and 85% to those that exceed RON 7,000.

In its complaint to CCR, the High Court argued that the bill violates several principles, including that of fair and equitable taxation and that of judges' independence. 

andrei@romania-insider.com

(Photo source: Inquam Photos/Octav Ganea)

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Romania's Constitutional Court says progressive taxation of special pensions breaches Constitution

Romania's Constitutional Court (CCR) admitted on Tuesday, December 15, the objections expressed by the Ombudsman and the High Court (ICCJ) to taxing special pensions by up to 85%, Profit.ro reported.

A draft law provisioning the progressive taxation of the so-called "special pensions," namely those not backed by the recipients' past contributions, was passed by the lawmakers but referred to the Constitutional Court by the Ombudsman and ICCJ.

Therefore, the law was declared unconstitutional and will return to Parliament to be revised in line with the CCR's decision.

On June 17, the Chamber of Deputies passed the law on special pensions taxation by up to 85%, a decision supported by all major political parties. Thus, a tax rate of 10% will be applied to pensions between RON 2,000 (EUR 400) and RON 7,000 (EUR 1,400), and 85% to those that exceed RON 7,000.

In its complaint to CCR, the High Court argued that the bill violates several principles, including that of fair and equitable taxation and that of judges' independence. 

andrei@romania-insider.com

(Photo source: Inquam Photos/Octav Ganea)

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