You’ve got mail, from AADE

About 1,500 taxpayers have received emails asking them to justify to the tax administration the huge differences that arise between their declared taxable income and expenses that they seem to have incurred.

All the above taxpayers, mostly professionals, have one thing in common: They declared incomes of less than 10,000 euros in 2022, while at the same time their expenses are many times higher. For some the annual expenses amount to €30,000, for others €100,000, while there are also cases of expenses from €150,000 to €300,000.

It is noted that of the 612,413 professionals who started working before 2019 and have submitted a tax return for all five tax years (2018 to 2022), 170,338 declared zero profits or losses for these consecutive years. Of the rest, the largest percentage declared incomes that do not exceed €10,000.

The auditors at the tax office do not consider them a priori tax evaders, as it cannot be excluded that some may justify the expenses they made by selling assets or other assets.

According to tax administration sources, “the answers of the taxpayers are expected and the audits will proceed according to them.” Some, that is, may present, as mentioned above, data that prove the large amount of expenses. For those who cannot justify them, an audit will begin which will reach back five years.

It is noted that the above taxpayers emerged after the large cross-examination made last fall by the tax administration (AADE) of 3.8 million tax returns with incomes below €10,000. By comparing declared incomes with the cost of living as recorded electronically, AADE aimed to identify those who hide their true incomes. Data from bank account and card transactions, electricity bills, mobile phone bills, and a series of information on various payments were compared with the incomes declared by taxpayers.

The cross check initially identified 440,000 cases, of which major differences were detected in about 20,000 cases, which are those to be initially invited for explanations.