Tight “races” for companies and professionals who evade taxes through… negligence

Expenses and “inflated” or rather “non-inflated” sales that refer to… unskilled workers, are two sides of the same coin in the… “kingdom” of tax evasion.

While professionals (first) and companies (second) are gradually taking a stand towards TIF, waiting for announcements on how and to what extent the supposed tax system will change, the relevant departments of the Ministry of Finance and the AADE are working feverishly for the next big bet, which aims to close one of the biggest “wounds”.

The accounting data for 2023 showed that natural persons carrying out business activity declared a turnover of €47.7 billion but were ultimately taxed for a net profit of €5.2 billion. How did this… magic happen? Quite simply, the declared business expenses reduced taxable income to much lower levels.

The picture is similar from the treatment of the returns of legal entities, even if the profits taxed on them are higher than those of 2022. The bottom line is that all companies declared a turnover of €424.8 billion, but taxable profits were limited to only €25.2 billion. Another sign that something is wrong? In a good year, the declared losses were more specific, reaching €37.6 billion compared to €36 billion in 2022.

And so we came to the decision that starting next year, in addition to income, all expenses should go through myDATA. Simply put, anything that is not covered in business e-books will not be considered.

The goal is that after a transition year, like this one, where deviations are recognized, from the time to be recognized only limited (5%) in relation to expenses. The “key” of the design is that in the end, the tax returns of business professionals will not only be filled in advance, but also “secured”, without the possibility of intervention. Obviously, the technical parameters of such a project require a lot of effort.

Transformations

This year’s announcements will also provide the relevant agencies with data on the turnover rate of specific occupational groups, which under other circumstances one might conclude fall within the poverty range.

Last year’s figures show that engineers earned €28,349 in total, architects €18,765, brokers €15,733, gyms €16,605, hairdressers €15,156, electronics repair shops €11,949, lawyers €22,890, transport agencies €17,771, video clubs €9,738, PR offices €23,414, clothing retail at market stalls €5,926, taxis €16,281, garages €20,782, plumbers €29,463, carpenters €32,913, electricians €32,635, and so on.

We are talking about the average for each industry, without taking into account the “inflated” costs, which reduce taxable income. For example, 29,775 bar owners reported a gross income of €37,777, but the average net income was €6,860. All of the above will be taken into account, before decisions are made on any interventions in the hypothetical tax system. But what the competent sources confirm is that if the “holes” are not closed, the system will not be withdrawn, even if it is modified…