Market fury over assumptions – Government to burden self-employed with thousands of euros in taxes

How the government’s legislative experiments are burdening freelancers with thousands of euros in head tax

In June 2023, 45% of the self-employed voted for ND because it lowered their taxes by cutting the tax rate on incomes up to €10,000 to 9% and because they believed Mitsotakis, who campaigned on a promise of “no tax increases”. But a few months later, the ND government introduced the new system of supposedly objective criteria, which freelance journalists rely on – regardless of what they collect or what they declare in myDATA, e-books, etc. and which was supposed to solve the problem of tax evasion – whereby they are taxed at a minimum supposed profit “claim” starting from €10,920 and going up to €50,000. In fact, it was decided that the new system would be applied retroactively to 2023 incomes.

Independent journalists cried foul, but their backlash was overshadowed by the government’s social automation campaign, which accused them of tax evasion, and their backlash subsided when the government promised that the evidence would be disproven.

Halima’s Tales

Until May, with the filing of tax returns, the freelancers discovered that the anti-presumption claims were fairy tales. In a circular issued a few days before the European elections, the AADE stipulated that the condition for challenging this presumption was to fill out a questionnaire on all income and assets, personal and family, to accept a retrospective audit over a period of five years and after paying the “suit” they were sewing for them, in the hope that they would be acquitted by the AADE or the administrative courts – if, when, one day… All this became known in the days when the ring with the sworn tax officials in Chalkida who were blackmailing companies was revealed.

Thus, the self-employed in the European elections were the losers – they voted with only 28% – while on 17 June the coordinator of their associations filed an appeal to the Council of State to annul Law 5073/2023 but mainly the AADE decision to monitor retroactively for five years.

This is how we saw last week Hatzidakis and Mitsotakis argue that the minimal number of data challenging the assumption made (because AADE blocked them with strict provisions) does not mean that the self-employed have a serious problem with presumptive income, but that the government will make some changes when the tax returns process is completed “provided that there are serious injustices” and “without affecting the philosophy of the law.”

In fact, as it has started to leak out of the Treasury, changes are becoming inevitable as the repeal of the AADE decision in the Center of Excellence is more than possible. There is even a Plan B if the bill that includes the supposed minimum profit, which would tighten the belts on e-books, is rejected.

All this paperwork ignores the depth of the anger that has been generated by successive legislative experiments to crack down on tax evasion, and the chaos they have brought to the market. Visiting their accountants these days to file their returns, thousands of self-employed people find themselves speechless when they discover that they are burdened with thousands of euros in head tax, not because they are evading taxes, but because the government cleverly lists everyone as income for everyone. What they declare is net profit from self-employment, wages and pensions, excluding other sources of income, such as rents or household income, i.e. the husband’s income.

A typical example is the case of a 70-year-old sculptor, reported by an accountant to Documento, who receives a small pension of 2,800 euros per year, has a rental income of 12,000 euros and makes copies of ancient statues. Based on Law 5073/2023 because he is old, so it is assumed that he has been practicing the profession for many years, this sculptor was punished with an additional 3,500 tax, which is basically more money than his pension, because he was supposed to evade taxes. There are tens of thousands of other cases similar to this one, especially in the artistic, alternative or legal professions.

The market is upset

And let us not discuss, as the accounting circles say meaningfully, the chaos created in the market by the ever-new demands of the government and the AADE from companies and professionals, the latter struggling to meet them in the suffocating deadlines under the threat of imposing high fines, one for the POS interface with cash registers and ERP systems, one for IRIS, one for the new FIMA systems in catering companies, which has led to a full-fledged heart attack in the market that tends to turn into a war of all against all and with companies already sending a mass exodus of suppliers unable to provide them with the necessary equipment to avoid being imposed a high fine by the AADE themselves.

“When AADE goes so far as to fine and close a large clothing chain like H&M, even though it has correctly reduced receipts, paid VAT and done everything necessary with service providers and the POS interface with cash registers simply because of a software failure, each one of us can imagine how exposed every small shop and every self-employed person who sees his accountant once every three months and his technician once every six months is to AADE,” said an accountant at Documento. “It is a question of whether creating all this monstrous control mechanism using my data and e-books, with the consequent cost and inconvenience for companies, would do anything to combat tax evasion. Or, assuming they work, why did they also put a capital tax on the profit considered a burden for freelancers? End.

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