The ministry wants to patch a tax law loophole often used by doctors and lawyers to evade income tax. Officials are seeking to stop the practice whereby people draw dividends for regular salaried work. Under the new bill, dividend rights will be restricted to people with significant ownership stakes in companies.
Physicians have for example through their own one-man companies been able to become partners in the private health centres in which they work. The centres’ profits have been channelled to holding companies from which doctors have been able to cash in on tax free annual dividend payments up to 90,000 euros. Law firms have also been known to use this escape clause.