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Case study
Personal tax advising
Correctness of declaring and retaining of Income Tax from Capital Growth
Task - Solution - Result
TASK:
In 2021, a tax consulting request was received from one of our Clients. They were not sure about the correctness of one situation from the tax point of view and could not find any legal argument to support it.
Question: “A legal person has purchased agricultural land from an individual based on a sale-purchase agreement. Was correctly declared in the tax reports IPC18 and IALS the amount of the capital increase and the income tax related to it ? How can this operation be legally justified for the authorities? “
SOLUTION:
According to the Instruction on how to complete the Report on income tax retaining, mandatory medical insurance and state social insurance contributions (Form IPC18) – Annex no. 2 to the Order of the Ministry of Finance 126 of 04.10.2017, the code 31 col.4 indicates the amount of income from which the income tax is supposed to be retained in advance, according to art.90 of the Fiscal Code.
At the same time in accordance with art. 40 par. (1) of the Fiscal Code, the amount of capital increase or loss resulting from the sale, exchange or other form of alienation of capital assets is equal to the difference between the amount received (income obtained) and the value base of these assets. At the same time, according to par. (7) of the same article, the amount of the capital increase during the fiscal period is equal to 50% of the excess amount of the capital increase recognized above the level of any capital loss incurred during the fiscal period.
RESULT:
It was confirmed that the Client entity correctly calculated and reported to the authorities the capital increase value and the related income tax.
Thus, as a result of the Client verification by the tax institution in the context of the exact situation, the correctness of the solution offered by VIOSER was confirmed.
Vioser Consulting over time has offered over 200 SOLUTIONS for individual FISCAL CONSULTANCY projects on the basis of which companies have obtained clarity in their situations from the Tax point of view. All Clients benefited from PROFESSIONAL answers legally argumented, according to the legislation in force.
