New Legislation -
Compensation & Benefits – Modification of the tax regime for severance amounts paid as of September 1, 2012
Article 30 of the public finance act (modifying the 2012 budget) substantially reduced the threshold above which severance indemnities (including legal and conventional termination and retirement obligations) for employees and officers (including corporate officers) are subject to social security contributions in full and from the first euro. Effective, September 1, 2012, the previous threshold of 30 times the annual social security ceiling was reduced to 10 times the amount of the annual social security ceiling.
C is the annual social security ceiling decided by the government. This is the basis of computation of social contributions.
SO is the amount of the severance or retirement obligations provided by law or the applicable collective bargaining agreement.
SI is the additional amount potentially paid by the company in compensation for an out of court settlement.
*CSG and CRDS are the acronyms for specific social contributions corresponding to 8% out of 97% of the total amount.
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