Tighter noose for tax evasion

AADE will only acknowledge the expenditure by the self-employed that is made electronically

Tighter noose for tax evasion

The tax administration will target the expenditure declared by the self-employed and freelancers, with the aim of reducing tax evasion and increasing their taxable income.

According to Finance Ministry data, the self-employed have a gross income of 35-40 billion euros per year, while their taxable income is less than 10 times that as it does not exceed €4 billion.

The European Commission remarked in its report last week that, based on the data, the turnover of the self-employed has increased rapidly, while their declared incomes have increased slightly.

“This discrepancy is likely to indicate significant tax evasion and loss of fiscal revenue. The situation could be improved by revising the existing tax system for the self-employed and increasing the use of information from electronic payments,” noted the Commission, linking the ongoing digitization of the Independent Authority for Public Revenue (AADE) with the more effective control of those who hide taxable material.

Sources say AADE has already prioritized for inspection the cases of individual businesses and freelancers, where deductible expenses are probably inflated in relation to the mean rate in the economy.

Until the system is changed, so that it provides for the connection of almost all expenses with the electronic books, the tax administration will rely on the declared data arising from the sectors of the Greek economy. In the event that some small businesses or the self-employed declare expenses higher than the average, they will become inspection targets.

The only way to limit tax evasion, say ministry officials, is to increase electronic transactions and further utilize electronic books. Based on the above, the interconnection of POS with cash registers and the Taxis database, incentives to enhance electronic payments and e-books will be used to the maximum to reduce delinquency, which remains high in certain service industries. The same officials note that a necessary condition for the abolition of the fee for practicing a profession (“Telos epitidevmatos”) is the reduction of tax evasion.

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