New exemptions in tax bill

Finance Ministry tweaking the rules on the presumption of professionals’ incomes

New exemptions in tax bill

New exceptions, after those announced 15 days ago, are being introduced to the presumptive way of determining incomes for the self-employed and for small enterprises. They were added by the Finance Ministry to the draft law put up for public consultation on Tuesday.

At the same time, there has been an increase in cases where the new way of taxing professionals can be bypassed provided that there are specific real reasons that lead in this direction – i.e. the presumptive way of determining income can be challenged.

It is highly possible that the government will proceed with additional changes before the draft law is submitted to the Parliament and depending on the comments-suggestions of the various entities and professionals.

Based on what is provided in the draft law, from the application of the new method of income taxation, there are exemptions for professionals with a disability equal to or greater than 80%, while professionals who carry out an activity and have their main residence in settlements with a population of up to 500 inhabitants and on islands with a population of fewer than 3,100, the presumed income is reduced by 50%.

In addition, any income from wages, pensions or from farming business activity is included to reach the presumed income level. For example, if the presumption for a professional is determined at 12,000 euros and he has salary income of €7,000, the presumption is reduced to €5,000.

Existing sole proprietorships are also excluded. On the contrary, the new sole proprietorships that will be set up by freelancers who continue the same activity will be included.

Taxpayers can dispute the presumption if they serve their military service, they are imprisoned, they are treated in a hospital or clinic, they are unable to exercise due to pregnancy or childbirth based on labor legislation, they have been demonstrably affected by extensive natural disasters that made it partly or wholly impossible to exercise their professional activity etc. 

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