Overhaul of freelance professional tax
The Finance Ministry is planning to overhaul the way freelancers and self-employed people are taxed in a bid to reduce the tax evasion recorded in both income tax and value-added tax.
The government wants to review the tax framework for self-employment based on international practices, to expand the tax base through incentives. This targeting is considered critical, according to a ministry decision providing for the preparation of a study by the Foundation for Economic and Industrial Research (IOBE), as despite the improving trend, Greece has the second highest VAT revenue gap in Europe – i.e. the difference between expected and actual revenue.
The latest tax data show that freelancers and self-employed people with incomes exclusively from business activity amount to 366,787, and they declared incomes of €3.375 billion. Of these, 268,027 declared annual incomes between €1,000 and €10,000, or just €500-800 per month.
The solution, according to financial staff sources, is the expansion of card terminals to the entire spectrum of economic activity, including all sectors. Nevertheless, while everyone in the government believes that the expansion of online transactions will help to reduce tax evasion, it is extremely difficult to make such a decision now.
