Tax carrot against evasion

Online payments to some professional categories will spare customers some dues to taxman

Tax carrot against evasion

The list of the Finance Ministry’s measures to battle tax evasion includes incentives so that taxpayers demand receipts from 18 categories of professionals and businesses. The idea is to motivate consumers to prevent professionals from evading.

Under the new rules, any payments made to those 18 categories via credit or debit card, e-banking or any other electronic form will be exempt from the annual taxable income at a rate of 30% and for a maximum amount of 5,000 euros.

The ministry has also decided to offer extra incentives to people who pay electronically for doctors’ visits. According to the plan, online receipts from doctors will count double in the process of calculating the 30% of taxpayers’ annual incomes in online spending. This means that a card or electronic payment to a doctor of €100 will count as €200 towards the annual online payment threshold.

According to the text on reforms in the country’s National Recovery and Resilience Plan, the European Commission and the government have agreed on a regulation, which is expected to go through Parliament, that will exempt from the taxable income 30% of payments made online to certain professional categories as an incentive to boost electronic transactions. The measure will apply over the next four years.

Consequently, if taxpayers reach the annual limit of €5,000 they can save taxes of €450 if their income comes to €10,000, or €1,100 for incomes up to €20,000, or even more than €2,000 for incomes in excess of €40,000 per year.

The total number of online transactions selected for eligibility under this measure is estimated at 103 million a year. 

If there is no fluctuation in those categories’ transactions, the 30% of their value will amount to €31 million, so a 22% tax rate would mean that the measure will only cost the state a low €7 million.

Especially with regard to the medical expenses category, the text notes that “this incentive will not only reduce tax evasion among doctors at the primary service level, but also assist older people reach the 30% annual online payment threshold.”

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