Determination of Taxable Sum. — Income-tax is levied, in the first place, on income already liable to one or other of the taxes previously mentioned and also on income, like salaries, wages and remuneration of the liberal professions, on which no tax has been paid. Income-tax returns must be filed before April 15th by individuals and before May 15th by companies.

The taxable sum is the total net income of all classes, less certain deductions of income derived from no specific source.

The law divides income the total of which is liable to income-tax into income from capital, income from land and buildings, industrial and commercial profits, wages and salaries, remuneration of the liberal professions and miscellaneous income. It has therefore to be determined for each of these classes how the net amount is to be computed, before adding them all together:

This income too is assessed at its net amount. Pensions paid to persons disabled in the war and to the widows and orphans of fallen soldiers are tax-free.

All this net income is added together, including, in the case of a taxpayer with wife or children not of age living under his roof, the income of the latter, except income from their work. The authorised allowances are then deducted, giving the final sum taxable.

The deductions allowed from total net income are:

The following may not be deducted from total net income:

The net amounts having been added together and the above deductions made, the result is the net taxable sum.

Computation of Tax. — The tax is only levied if the taxable sum exceeds 2,000 lats. Its scale is graduated (see Annex) and rises from 58.30 lats for incomes between 2,000 and 2,010 lats to 36.692 lats for incomes of 150,000 lats, plus one-quarter of the income in excess of 150,000 lats.

The method of computation is different for legal entities which pay profits tax (whose profits, that is, exceed 3 per cent of their registered capital). In their case, the income-tax is equal to half the profits tax for the same year.

The income-tax of legal entities which pay no profits tax is computed according to the ordinary rules.