Single tax rate for freelancers?
Gov’t mulling various scenarios for overhauling taxation system for self-employed professionals
Different scenarios for changing the way self-employed professionals are taxed have been put on the table so that they can be fully examined by the end of the year and drafted into a relevant bill that can then proceed to Parliament for ratification.
The first scenario concerns replacing the self-employed professionals’ income tax scale with the same single rate of taxation that applies to corporations and single-owner enterprises, so that all professionals now have a common method of taxation. The second provides for a change in the income tax scale, so that 70% of the self-employed are not taxed at the very low rate of 9% that currently applies.
A third idea being mulled is strengthening indirect monitoring practices, so that the self-employed cannot declare profits lower than the expenses they appear to be making. Last but not least, the government is considering linking the fee for practicing certain professions (“telos epitidevmatos”) to declared income, so that the prospect of removing the fee only concerns those who show reasonable profits for their profession and not negligible earnings or even losses.
Based on the prevailing scenario, the new taxation regime will concern incomes in 2024, so that any fiscal impact will be reflected in the 2025 budget. From this particular year, the government has pledged to proceed with the gradual abolition of the “telos epitidevmatos,” though recently it has also been linked to efforts to combat tax evasion.
The government, as emerged from the prime minister’s recent speech in Thessaloniki, has increasingly made the declared incomes of the self-employed a central target, as demonstrated by frequent references to the statistical findings from their declarations: 67% of the self-employed, or 261,000 professionals out of a total of 388,480, declare under 10,000 euros and an average income of €3,274 or €854 million in total.
The issue that concerns the government is how the goal will be achieved, as each of the scenarios has advantages but also significant disadvantages that have to be taken into consideration.
