The government is incorporating in its draft law on occupational social security stronger tax incentives aimed at introducing more employees and self-employed professionals to savings and investment, as well as giving a boost to collective bargaining.
The regulation will grant workers the option for even 35% of their gross salary to be deducted from taxable income – with the obvious consequence of reducing tax withholding and state income tax revenue – so that this amount is systematically invested mainly in a mutual fund.
The goal will be to accumulate over the years an amount that will be paid out upon retirement either as a lump sum or as an extra pension.
The tax incentives are also strengthened upon the disbursement of the accumulated capital. In the case of a lump sum payment, a 10% tax will be imposed if someone retires between the ages of 62 and 67, and 5% for retirement after 67.
In the case of pensions, the tax rate is 5% per year for retirement before 67 and 2.5% for retirement after 67.
