The 2nd Panel of the Superior Chamber of the Administrative Council of Tax Appeals (CARF), in a change of understanding, decided that social security contributions are not levied on Profit Sharing (PLR) payments made to directors who are not employees of the company, since such amounts do not form part of the contribution salary.
According to the Tax Authorities’ understanding, the understanding maintained through the CARF decision applies only to employees, which does not cover directors who are individual taxpayers, but in the decision of the CARF judges, it was clear that the exemption covers both employees and non-employed directors, since such payment is not of a remunerative nature, capable of being included in the calculation basis of the social security contribution.
