In a recent decision the Second Senate of the Federal Constitutional Court discontinued proceedings arising from two referrals by the Supreme Court under Article 100(1) of the Constitution in relation to flat rate payroll tax on withdrawals from pay-as-you-go supplementary pension schemes.
The Supreme Tax Court has held that the payment by the employer of a fine levied on an employee cannot be for a valid business reason and is therefore a taxable benefit subject to payroll withholding tax.
The finance ministry has issued a decree on the application to similar cases of a Supreme Tax Court judgment holding that a fraudulent salary increase was not a salary and that the tax office should return the withholding tax paid over without cause.
