In a landmark decision, the Constitutional Court has annulled the controversial 15% tax law imposed on free professions. The court ruled that individuals earning up to 14 million ALL will now be exempt from tax, while those earning above this threshold will be taxed at a rate of 23%. The court highlighted that the law violated the principles of legal certainty and proportionality.
Holta Zaçaj, President of the Constitutional Court, emphasized that the measure was disproportionate and that affected categories will be subject to standard small business taxation in 2029.
“The court scrutinized the legislator’s broad discretion in fiscal matters and found that Article 69, point 1, letter dh, second and third sentence, of Law No. 29/2023, along with Article 4 of VKM, infringed on economic freedom by failing to uphold the principles of legal certainty and clarity, as well as proportionality,” Zaçaj stated. “The 15% tax was implemented abruptly, not allowing sufficient time for taxpayers to adjust to the new scheme.”
The court’s decision partially accepted the request, annulling the specified parts of Article 69 and Article 4 of VKM 753/2023, while dismissing calls for the repeal of other provisions. The court’s final ruling will be issued within the legal deadlines.
This decision marks a significant victory for free professionals, ensuring fairer taxation and adherence to constitutional principles.
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