Tax authorities planning carrot-and-stick strategy
The Ministry of Finance and the Independent Authority for Public Revenue (AADE) plan greater discounts and the unlocking of bank accounts for those taxpayers who pay their taxes or their past debts on time or earlier.
The changes will affect income declarations filed next year.
But more inspections are coming for those suspected of hiding incomes, starting this autumn, with the aid of online databases.
The taxpayers, persons or corporations who choose to pay their assessed tax in one go, instead of up to eight installments, will get a higher discount than the current 3%. Taxpayers who are in arrears but have agreed to a payment schedule and stick with it, or even pay earlier, will also benefit from discounts.
Currently, a taxpayer in debt to the state can see earnings garnished. In some cases, when they want to sell a house, they need to ask for a certificate that they do not owe back taxes. To provide this certificate, authorities can withhold up to 70% of the proceeds of the sale, even whe debtors are keeping to the tax repayment schedule, with the withheld amount going toward debt repayment. With the new plan, the percentage withheld could drop below 50%, depending on the transaction.
A provision garnishing earnings from bank accounts, but leaving a minimum amount in one account to allow the debtors to get by, with some difficulty, will be amended next year, to allow for early or timely debt repayments. Currently, the amount that cannot be seized or garnished is set at €1,250. Changing the rigid rule has been mulled since 2019; with the changes, the allowed amount will depend on the size of the repayment and the number of installments paid in one go.
Similarly, diligent paying corporation will benefit from earlier returns of value-added tax.
The new inspections starting soon will focus on property and vehicle owners. For the first time, AADE databases will be connected to the national property registry. Also, certain professionals and businesses, such as doctors, hotels and gyms, will be asked, again, to provide a list of their clients.
