The Constitutional Court of Romania (CCR) found on Thursday that the provisions of the Fiscal Code on the progressive taxation of pensions are unconstitutional.

According to a statement sent to AGERPRES, in Thursday’s meeting, the CCR, in the framework of the a posteriori constitutionality control, with a majority of votes, admitted the exception of unconstitutionality and found that the provisions of art. 101 of Law 227/2015 on the Fiscal Code is unconstitutional.

„Essentially, the Court found that, with regard to the method of calculating the tax based on the contributory and non-contributory part of pensions, as well as on two variable indicators (average gross salary and average net salary), the text does not specify what is the specific way of calculating the contributory part, respectively the period to which the contributory part of pension income is related, which determines the violation of the provisions of Article 1, paragraph (5) of the Constitution”, the release reads.

Also, the Court said that reporting to the same variable indicators is maintained in the case of pensions that only have a non-contributory component, namely military pensions.

„Since the indicators used in the calculation formula are not constant, and their value is established annually, with the adoption of the state social insurance budget law for the respective year, the criticized text of the law creates the conditions for the pension being paid to be permanently reinstated under discussion and to be subject to an annual recalculation, by reporting to each new level of the gross average wage and the average wage net, which violates the provisions of art. 1 para (5), as well as art. 15 para. (2) of the Basic Law”, says the Constitutional Court.

At the same time, the Court observed that the legislator has the right to regulate the formation, administration, use and control of the financial resources of the state, as it results from the provisions of the Fundamental Law, but this right is subject to the constitutional requirements regarding the principle of legality and security of fiscal legal relations, in the composition regarding the quality of the rules.

The Court found that, under these conditions, the provisions of the Fiscal Code regarding the 10% tax rate applicable to each source in each category of taxable income remain applicable.

AGERPRES