The Explanation of the Ministry of Finance no. 011-0-326/2012-04 of 05.06.2012 (Explanation) was published at the website of the Tax Administration on 13.06. The Explanation clarifies the application of the provisions of Art. 30a of the Law on Tax Procedure and Tax Administration, which regulates the obligation of banks to allow payment of wages or salaries only if claims for taxes and contributions for compulsory social insurance are also paid.

Explanation actually reduces the bank’s duties under the provisions of Art. 30a, because the banks will be required only to provide certain Tax Administration data, while the banks will not be able to refuse payment of salaries at the same time if taxes and contributions for compulsory social insurance were not paid.

As of 1 July 2012, the banks which realize payment of wages and salaries, including the agreed compensation for temporary and occasional jobs, have to deliver information on completed payments of wages/salaries (in the form of electronic records) to the Tax Administration by the end of the day orders for these payments are executed. Electronic records shall contain the following information:

• name of bank,
• payment date,
• payer,
• the amount of wages and salaries, including the agreed compensation for temporary and occasional work, which are executed during that day on behalf of each payer,
• the amount of income tax and mandatory social insurance that were paid,
• public revenues account on which the payments were made and
• other data directly related to payment of wages.

Upon receipt of information from banks, Tax Administration will undertake activities within its jurisdiction, performing the office or field control, and when legal requirements are met, will request the initiation of a misdemeanor or a motion to initiate criminal proceedings against the payer of such income, and initiate procedures for regular or forced collection of public revenues.