Payers of the solidarity tax are employees, domestic employees with the employer – a foreigner, foreign employees with the employer – a foreigner –, and self-employed persons subject to the State social insurance and whose object of the State social insurance mandatory contributions (hereinafter – mandatory contributions) exceed the stipulated maximum amount.
Solidarity tax rate in 2020 is 25.5%
The object of the solidarity tax is income which pursuant to the law On State Social Insurance exceeds the maximum amount of the object of mandatory contributions stipulated for the relevant calendar year. In the period from 2019 until 2021 the maximum amount of the object of mandatory contributions is stipulated in the amount of 62,800.00 euros.
The same mandatory contribution rate, which is applied to a person’s income up to the maximum amount of the object of mandatory contributions (62,800 euros), must be applied to the object of the solidarity tax in the taxation year. Hence, if the employer calculated mandatory contributions by applying the rate of 35.09%, also the solidarity tax must be calculated by applying the same rate.
The difference between the actually paid solidarity tax, e.g., in the amount of 35.09%, and the calculated solidarity tax in the amount of 25.50%, is to be regarded as the solidarity tax overpayment and it shall be refunded.
The State Social Insurance Agency must calculate the solidarity tax overpayment for the taxation year of 2019 by 1 June 2020. The State Social Insurance Agency must calculate the solidarity tax overpayment for the taxation year of 2020 by 1 June 2021.
If the mandatory contribution rate is split between the employee and the employer, as specified in Section 18 of the law On State Social Insurance, the solidarity tax overpayment shall be refunded to the employer only.
Solidarity tax shall be administered by the State Revenue Service. After the Treasury has withheld 1% of the total payment of mandatory contributions, which is transferred to health insurance, the State Social Insurance Agency accounts, allocates and transfers the solidarity tax in accordance with the provisions laid down in Section 8.1 and Section 9 of the Solidarity Tax Law.
The State Social Insurance Agency accounts and allocates only the actually paid solidarity tax.
Allocation of the solidarity tax in 2020
The State Social Insurance Agency allocates the solidarity tax paid for the taxation period from 1 January 2020 as follows:
- 14% is allocated to the State special pension budget, registering this in the taxpayer’s personal account for the 2nd tier pension scheme;
- 10.5% is allocated to the personal income tax payment.
Solidarity tax which has been paid for the taxation year of 2018 is allocated according to the procedures effective by 31 December 2018.