On January 1, 2016 new regulations concerning the tax rate of 75% for the undisclosed income tax will come into force. This regulation is a result of judgments of Constitutional Court, which has stated the previous regulations to be incompliant with the Constitution because of their imprecision.
The new law provides that the income in the amount corresponding to the excess spending of the taxpayer in the tax year over the taxable or tax-free revenues obtained before incurring the expense shall be taxed with the punitive rate. The tax obligation arises on the last day of the year in which revenue has been created and penalty tax may be charged within 5 years from that date. It is the duty of the taxpayer to prove the sources of income.
According to the new wording of the law introducing the amendment the new regulations shall apply also before the day of its coming into force if the limitation period has not expired.