The Finance Act 2014 introduces a new temporary tax due by companies paying high gross remuneration to their employees in 2013 and 2014 exceeding EUR 1 million.

This temporary tax must be paid by companies at a rate of 50% on the portion of the remuneration paid in 2013 and in 2014 to their employees which exceed EUR 1 million.

The remuneration and benefits covered by the 50% tax include all types of income (eg wages, salaries, equivalent income, stock options, free shares and all benefits in kind or in cash, attendance fees, pensions).

This 50% tax is applied on remuneration paid in 2013 and in 2014 on an annual basis and is capped each year at 5% of the turnover of the company (eg a company serves a remuneration of EUR 1.5 million, the sum EUR 500,000 that exceeds EUR 1 million is subject to the new tax: EUR 500,000 x 50% = EUR 250,000 capped at 5% of the turnover of the company).

The 50% tax is calculated company by company and is considered to be deductible from the corporate income tax paid by the company but not deductible from the additional temporary surtax of 10.7%.