On 18 June 2019, the Ministry of Finance proposed changes to personal income tax (PIT) and corporate income tax (CIT) rates, which are expected to be introduced in 2020. The proposed measures are:

Individual tax:

An increase in the thresholds for all personal income tax brackets and a reduction in the second bracket rate from 27% to 26% and a reduction in the third bracket rate from 34% to 32%.

The rate of personal income tax on capital gains (interest, dividends and profits from capital) is increased from 25% to 27.5%, but the rate would go down in increments based on the holding period, as follows:

  • 27.5%- up to 5 years;
  • 20%- 5 to 10 years;
  • 15%-10 to 15 years;
  • 10%-15 to 20 years; and
  • 0%- over 20 years.

An increase in the personal income tax on rental income from 25% to 27.5%, with an increase in the standardized cost percentage from 10% to 15%.

Corporate tax:

The tax rate on income of legal entities is increased by one percentage point, from 19% to 20%; and

A minimum corporate tax at a rate of 7% is introduced.