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 Federal Finance Ministry circular of 12 November 2014 on the taxation of salaries for tax treaty purposes has been revised by a committee made up of from both the Federal and the States’ governments.
