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Englishnj Posted 14 years ago
Grammar
Withholding tax
There is a general withholding tax levied by employers on income paid to its non-resident employees. In this case, the employer must withhold income tax at the following graduated rates : 0%, 12% and 20%. This withholding tax is in full discharge of income taxation for the fraction taxable at 12%, not exceeding the limit of EUR 40,716 for 2010. This fraction is not taken into account for the calculation of the income taxation and this withholding tax cannot be computed.
Question:
In this paragraph, we see the company levys a graduated tax on the income of its non-resident employees. If the employee's income is below EUR40716, it's crystal clear what will happen - the company withholds 12% or 0% and the employee pays no more income tax. My question is, what if the staff earns more than EUR 40716 and thus deducted 20% for withholding tax? Does he have to pay another 8% for income tax?
Question:
In this paragraph, we see the company levys a graduated tax on the income of its non-resident employees. If the employee's income is below EUR40716, it's crystal clear what will happen - the company withholds 12% or 0% and the employee pays no more income tax. My question is, what if the staff earns more than EUR 40716 and thus deducted 20% for withholding tax? Does he have to pay another 8% for income tax?
Top answer
The paragraph is technically flawed in different areas. From a taxation point of view, an employer has no legal authority to "levy" any tax on its employees, In jurisdiction where withholding tax on employees income is operational, the general situation is for employers being legally obligated to "withhold" a prescribed rate or rates of income tax from salary payments made to its employees. Under this scenario, the employer is not "levying" a tax on its employees.
- The paragraph is technically flawed in different areas.
- From a taxation point of view, an employer has no legal authority to "levy" any tax on its employees, In jurisdiction where withholding tax on employees income is operational, the general situation is for employers being legally obligated to "withhold" a prescribed rate or rates of income tax from salary payments made to its employees.
- Under this scenario, the employer is not "levying" a tax on its employees.
- Instead, the employer is collecting tax (in a manner and at a rate or rates prescribed by relevant taxation legislation) on behalf of the tax authority.
- The employer in also obligated under law to pass on the withholding tax so collected to the tax authority within a reasonable period of time.
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2 Answers
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The paragraph is technically flawed in different areas.
From a taxation point of view, an employer has no legal authority to "levy" any tax on its employees, In jurisdiction where withholding tax on employees income is operational, the general situation is for employers being legally obligated to "withhold" a prescribed rate or rates of income tax from salary payments made to its employee
From a taxation point of view, an employer has no legal authority to "levy" any tax on its employees, In jurisdiction where withholding tax on employees income is operational, the general situation is for employers being legally obligated to "withhold" a prescribed rate or rates of income tax from salary payments made to its employee
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Thanks!
Could you tell me what will happen if an employee earns more than EUR 40716?
Could you tell me what will happen if an employee earns more than EUR 40716?
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