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Constitutional Court declares taxation of pensions unconstitutional

Constitutional Court declares taxation of pensions unconstitutional

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The Constitutional Court of Ukraine, by its decision of February 27, recognized as unconstitutional the taxation of pensions. This was reported on the website of the court.
"The decision concerns constitutional proceedings in cases on the constitutional filing of 48 People's Deputies of Ukraine and the Supreme Court of Ukraine, united with the decision of the Constitutional Court of January 26, 2016 in one constitutional proceeding," the court explained.
Judges have established that the taxation of a pension, starting from its certain size, violates a fair approach in establishing a pension, since it leads to its actual reduction
Judges have stated that the taxation of a pension, starting from certain amount, violates a fair approach in establishing a pension, since it leads to its actual reduction.
"The Constitutional Court of Ukraine also stated that after the introduction of the taxation of pensions in the Ukrainian legislation from July 1, 2014, the Verkhovna Rada of Ukraine for two years made three amendments. Under such circumstances, persons who are entitled to pension payments could not be confident in stability of legal regulation in this sphere. Therefore, the establishment by the Verkhovna Rada of Ukraine of the taxation of pensions and the change in the amount from which begins such taxation is contrary to such elements of the constitutional principle of the rule of law such as legal certainty, legal predictability, legitimate expectations and fairness, " the court’s  press service explained.

The court decided to recognize as unconstitutional the provisions of the Tax Code, which stipulate that the total non-taxable income of the taxpayer includes the amount of pensions or monthly life allowance.
Thus, the provisions of the Tax Code on the taxation of pensions lose their force from the date of adoption of this court decision. The decision is final and can not be appealed.
As it was reported earlier Ukraine joined the last ten countries of the rating 'Best Countries for Comfortable Retirement' made by US News, Wharton Business School and BAV Group. Ukraine took the 72nd place out 80 represented in the list. It stays between Angola and Algeria.
Poland took 32nd, Hungary – 39th, the Czech Republic – 37th, Romania – 50th, Turkey – 46th, Belarus – 66th place.
Russia got 79th place and Iran occupied the last place.
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