ECONOMY

Businesses to pay less advance tax

businesses-to-pay-less-advance-tax

About 80% of all businesses will prepay a smaller portion of their taxes, with most seeing a 50% reduction. The Ministry of Finance said data from tax offices across the country showed that turnover losses were precipitous.

A Finance Ministry official estimates that businesses will pay €1.2-1.5 billion less in taxes in 2020.

According to legislation in place, the prepayment of tax on 2020 income is cut by 30% if turnover during the first half of the year is 5%-15% lower than in the same period of the previous year; by 50%, if turnover has dropped 15-25%; by 70%, if turnover is down 25-35%; and there’s no obligation to prepay tax if turnover has declined over 35%.

Turnover estimation is based on monthly or quarterly VAT returns, depending on the type of business. Some businesses that do not have to submit VAT returns are given a 50% discount on prepayment.

Attempting to cheat, though, by providing false statements can incur hefty fines.