In a most recent decision, the Supreme Tax Court held that the income tax payable on the compensation for loss of earnings which was subsequently reimbursed by the tortfeasor (injuring party) is subject to income tax in the hands of the injured party.
The finance ministry has issued a circular on employee redundancy payments, dealing essentially with the question of income accumulation in a single tax year.
The Supreme Tax Court has held that the tax-free portion of a redundancy settlement should be deducted from the down-payment in determining the income accumulation entitlement to progressive rate spread.
