20% profit-sharing tax credit

Article 2 of the act on earned income creates a tax credit for companies that have signed a profit-sharing agreement (Article 244 quater T of the General Tax Code). It equals 20% of the difference between the profit-sharing bonuses due for the financial year and the average bonuses due under the previous agreement, or 20% of the bonuses when no agreement was in force in the previous four financial years. It applies to agreements or amendments signed between the act's publication and 31 December 2014. The credit is set against income tax or corporate tax, with any excess refunded. The 2011 finance act restricted it to companies with fewer than 50 employees and raised its rate to 30%.