First pay, then dispute the tax

Self-employed} professionals will first have to pay the tax based on their presumed income before requesting an audit from the tax authorities and disputing the amount charged to them.

According to the new law, freelance professionals, sole proprietorships and the self-employed can request to be audited by the tax office in order to prove their real incomes, but those who decide to appeal will first have to pay and then they will be checked. Any difference that arises will be offset against other taxes or refunded to them if they have no outstanding dues.

It is noted that the Scientific Council of the Parliament pointed out that a reasonable and exclusive deadline must be set by law for the completion of the audit following the submission of the relevant request, after which the presumption will automatically be overturned and any sums unduly paid will be returned with interest. This remark was partially taken into account by the government, as the following was added to the provision: “The procedure, the time of the inspection and any other necessary detail for the implementation of paragraphs 3 and 4 shall be determined by decision of the director of the tax administration.” This means that the audits to challenge the presumed income will be done on a priority basis and specific time limits will be set for their completion, but without providing for the return of the money with interest.

The new law specifies the conditions for the taxpayer to challenge the presumption.

The self-employed may also challenge the amount resulting from the presumption of minimum wage. A necessary condition is to request an audit from the tax authorities to prove the accuracy of the declaration of income less than the presumed one.

Meanwhile, the Finance Ministry has passed through Parliament the ban on the use of cash in the purchase and sale of real estate, with the aim of limiting tax evasion. Now all transactions will be done via banks – i.e. real estate sales will be canceled if the use of cash is found – with fines up to 500,000 euros.