BUSINESS

Narrowing list of e-payments toward income tax discount

PROKOPIS HATZINIKOLAOU

TAGS: Taxation

Spending on rent, mortgage payments and utility bills will not count toward the sum of card or e-banking payments taxpayers have to reach to be eligible for a tax discount of 1,900-2,100 euros per year, according to Finance Ministry officials.

The same officials add that the ministerial decision to be issued soon (pending the agreement of the country’s creditors) will include a detailed list of the spending types that will count toward the tax-free threshold that salary workers, pensioners and farmers will be entitled to if they reach the necessary percentage of their annual income in electronic payments.

The officials say that the idea is to have as few exceptions as possible, given that it is difficult for banks to differentiate between the types of payments, while there is no software at the ministry that can do so automatically. It is clear, however, that taxpayers will not need to collect paper receipts for payments conducted using cards or online.

The creditors have told the government that receipts from set payments such as rents, mortgages and utility bills should not count toward the tax discount. The government reserves the right to annually amend the decision on the spending types that are excluded, for example with the addition of those it deems more likely to involve tax evasion.

The first year of the measure’s application will be experimental and will be used by the ministry to decide whether the quotas need to be raised and which kinds of spending ought to count toward the tax-free level. That is the reason why the quotas will vary depending on the level of each taxpayer’s income: 10 percent for incomes up to 10,000 euros per year, 15 percent for incomes of 10,001-30,000 euros and 20 percent for incomes above 30,000 euros.

The quotas will also be progressive, meaning that taxpayers with an annual income of 15,000, for instance, will have to make electronic payments equal to 10 percent for the first 10,000 euros (i.e. 1,000 euros) plus 15 percent for the remaining 5,000 euros of their income (i.e. another 750 euros), for a total of 1,750 euros in annual electronic payments.

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