Minimum director fee: penalty of 5% removed from Income Tax Code


The Corporate Income Tax Reform Act had introduced a distinct taxation of 5% due by each company (large or small) that does not grant a minimum director fee of EUR 45,000 (EUR 75,000 for a group of affiliated companies). The tax was due on the difference between the highest compensation actually paid and the required amount, and is tax deductible.

On 4 April 2019, however, the Chamber adopted the proposal eliminating the sanction for non-compliance with the minimum remuneration condition (adopted text not yet available).

Article 219quinquies is removed from the Income Tax Code. Therefore, the distinct taxation of 5% will be considered never to have existed and will not apply to any company, regardless of the amount of the director fee since 1 January 2018.

The provisions referring to this article will also be modified. Except for one provision, theses changes will be applicable as from the assessment year 2019 that is linked to a taxable period that starts, at the earliest, on 1 January 2018.

The adopted text has still to be published in the Official Gazette.