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How will taxes be calculated for late payments?
How will taxes be calculated for late payments?
If a bonus for the year 2025 is paid to an employee in February 2026, should income tax withholdings be made in accordance with the legislation of 2025 or 2026?
The State Tax Service under the Ministry of Economy has stated that if a bonus related to 2025 is paid to an employee in February 2026, the income tax withholdings on this bonus should be made in accordance with the tax legislation in force in 2026. According to the Tax Code, the taxable object for income tax purposes is formed on the date the income is actually received. In this context, it is not the period to which the income relates that is decisive, but the date on which it is actually paid (granted) to the employee.
Therefore, although the bonus relates to 2025, since the payment is made in February 2026, this income is considered to have been received in 2026, and income tax withholdings are carried out in accordance with the legislation of 2026.
If a bonus for the year 2025 is paid to an employee in February 2026, should income tax withholdings be made in accordance with the legislation of 2025 or 2026?
The State Tax Service under the Ministry of Economy has stated that if a bonus related to 2025 is paid to an employee in February 2026, the income tax withholdings on this bonus should be made in accordance with the tax legislation in force in 2026. According to the Tax Code, the taxable object for income tax purposes is formed on the date the income is actually received. In this context, it is not the period to which the income relates that is decisive, but the date on which it is actually paid (granted) to the employee.
Therefore, although the bonus relates to 2025, since the payment is made in February 2026, this income is considered to have been received in 2026, and income tax withholdings are carried out in accordance with the legislation of 2026.