Taxpayers will get a tax bonus for their card transactions with 20 professional groups up to the end of 2025. The measure has retroactive effect from January 1.
Taxpayers who use their credit or debit cards or use e-banking services in transactions with specific professional sectors will secure a reduction from their taxable income amounting to 30% of each payment made. This means that 30% of the money the taxpayer spends electronically every year on certain products and services will be deducted from their annual taxable income and therefore reduce their income tax due.
Furthermore, each taxpayer’s annual spending by electronic means on visits to doctors, dentists and vets, as well as tests at private clinics and other medical services (except for hospital treatment and medicine purchases), will count double toward the necessary spending online of 30% of one’s annual income.
The decision by the Finance Ministry has set the following professional categories as those where electronic payments lead to tax deduction: plumbers, electricians, painters, lawyers, architects, refrigerator experts, funeral parlors, personal care and nursing services, cleaning and maintenance services, childcare, limousines and taxis, photographers, construction work, as well as gyms and dance schools.
Notably, the decision provides that the deductible income may not exceed the total income a taxpayer has declared for this year from pensions and salaries, business activities and real estate, and has a ceiling of 5,000 euros per annum in total per taxpayer. The annual sum will concern only one taxpayer and any excess electronic expenditure may not be used by a spouse or another person.
Consequently a taxpayer with an annual taxable income of €20,000 who pays €3,000 by card or e-banking for the services of freelance professionals will have 30% of that – i.e. €900 – deducted from his taxable income, thereby taking it down to €19,100. The income tax due for the income of €20,000 would have been €3,100 based on the tax rates. After the deduction of that €900, the dues for the year would drop to €2,902, saving the taxpayer €198.