Do employees relocated through subcontract reform submit an annual return?

One of the major challenges facing companies in 2021 was the implementation of labor, tax and social security reforms for subcontractors.

With the reform, many companies relocated their staff, and they did so with the following actions.

  • Employer replacement.
  • Transfer of employees with recognition of their acquired rights.
  • Resumption of employment, re-establishment of employees in relevant companies.

According to the published analysis ProsecutionThe above actions assume that the transferred employees had more than one employer during the financial year 2021.

The analysis shows that the above raises doubts about the calculation of the annual income tax (ISR) of these employees և, if necessary, the submission of their annual declaration for fiscal year 2021 in April 2022.

Calculation of annual employee tax

in the analysis Prosecution It is explained that in order to decide how to act in this situation, it is necessary to start the analysis from the point of view of regularity. In this regard, he pointed out that Article 97 of this law Income tax law It defines as an obligation of the employer to calculate the annual tax of the employees. This is called “annual adjustment” in colloquial language, և companies usually do this as a bonus.
The same provision mentions three cases when the employer will not make the annual calculation. One of them is the following.

  • When the employee has started providing services after January 1 of the given year or has stopped providing services to the custodian until December 1 of the year for which the payment is made.

The analysis shows that the case is debatable, as it could be assumed that in the cases where the employer was replaced, the employee did not actually start providing services after January 1, but rather, he had already worked that There was a replacement, but since his rights և seniority are protected, the employee does not fit in this case. This will lead to the conclusion that the employer should calculate the employee’s annual adjustment.

Nevertheless, Prosecution notes that the following points need to be considered:

Employer replacement

In this respect, it is necessary that in case of replacement of the employer, this is exactly what happened – the replacement of the employer. That is, as of January 1, 2021, the employee had an employer, and at the end of the year, the employee has another employer, even if the transition took place by replacing the employer, the labor rights have been preserved. In this case, then, the relationship with the new employer started at the beginning of the year.

With this sequence of ideas, we have that the current employer has employees who have not started providing services since January 1, therefore, in exceptional cases, making the annual adjustment set forth in Article 97 of this law. Income tax lawleading to the conclusion that the employer should not calculate the annual adjustment.

Transfer of employees վերականգ Restoration of employment relations

In the case of other methods of relocation of employees that have not taken place with the replacement of the employer, it is clearer that the employment relationship started after January 1, 2021, so the employers are under the exception of և will not count. annual adjustment.

Prosecution He noted that it is clear that the employer’s exclusion from the annual calculation of employees transferred by any mechanism or means, that for this reason they do not have the entire working year. Thus, it is possible to conclude that: The employer is exempted from making an annual calculation of its employees.

As for the obligation of employees to submit their annual declaration, the legislation gives two interpretations with opposite results.

  • On the one hand, it can be argued that there is no obligation to submit the declaration, as the services of more than one employer were not provided at the same time.
  • On the other hand, it can be concluded that it is enough that the benefit was given to two employers during the year, even if it did not happen at the same time.

The second interpretation is more in line with the tax filing mechanism.

Therefore, Prosecution Considers that, in the event that employees are required to submit their annual declaration, it would be appropriate to establish appropriate means of communication to guide them, and, if possible, to provide them with the necessary assistance to do so. a problem that can be difficult for people in general.

– According to information from the Prosecutor’s Office.


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