Tax cut for certain e-payments

Receipts for goods/services from professions known for dodging dues slashes taxable income

Tax cut for certain e-payments

Taxpayers who made the most of the favorable provisions of tax regulations this year by using cards or e-banking to pay for goods and services from professional categories at the top of the list of tax evasion will enjoy a tax reduction in 2023 of up to 2,200 euros each.

According to the tax declaration bill due to be submitted from mid-March, the reduction of taxable income by up to €5,000 is activated for those with income from salaries, pensions, business activity and real estate. For this to happen, €16,667 must have been spent through electronic transactions on goods/services from a list of 20 professions. From these transactions, 30% of the expenses are deducted from their taxable income. In order to have the maximum tax deduction of €2,200, a taxpayer should be taxed at a rate of 44%, which means that they declare an income of more than €40,000. For lower income brackets, the tax reduction is smaller.

Expenditures that lead to an extra tax deduction are payments for veterinary services, plumbing, refrigerator or heating maintenance, electrician services, carpentry, insulation, masonry, plastering, tiling, sheet metal roofing and windows etc, for concrete supply, taxi services, hairdressers, barbershops and beauty parlors, funeral services, massage parlors, physical wellness, cleaning and domestic services, photo development, dance schools, gyms and membership leisure activities, miscellaneous leisure services, personal care and nursing (excluding hospital activities), legal services and childcare services.

Expenses must have been made by electronic means – i.e. debit or credit cards, prepaid cards, e-banking, e-wallet, Paypal etc.

Taxpayers’ income from wages, pensions, business activity and farmers will be taxed at rates from 9% (for the first €10,000 of income) up to 44% for incomes over €40,000 with intermediate rates of 22%, 28% and 36% imposed incrementally for each additional €10,000 of income (from €10,001 to €20,000, from €20,001 to €30,000 and from €30,001 to €40,000).

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