Withholding tax rules on the income categories related to Personal Income Tax and Corporate Income Tax
With the approval of the Personal Income Tax Code (PIT Code) and the Corporate Income Tax Code (CIT Code), the taxation of natural and legal persons is clear, in different statutes and with different taxes. Both Codes refer to the regulation of the withholding tax system for separate statutes. This statute creates conditions for the stable establishment of the disciplinary framework for withholding tax. At the level of the entities where the law imposes the obligation to withhold, the natural difficulties of tax substitution have been overcome, and the obligations on each subject of the tax legal relationship are clearly and objectively distributed. The PIT Code shall be based on five fundamental income categories, which only partially coincide with the categories accepted by Income Tax and which bring about a significant increase in its incidence, with gains of tax equality. The withholding tax regime that has been approved begins with this division of income into different categories, creating different rules for withholding tax depending on the type of income concerned. This statute also provides for the rules applicable to the withholding tax on income obtained by legal persons. It should be noted that the current tax withholding system has some drawbacks that need to be removed in order, on the one hand, to make it easier to enforce and, on the other hand, to create a simple and efficient mechanism through which the respective formulas or tables may be approved and published in due time.