Freelancers: Who is included and who is excluded from the new presumptions

The unveiling of the provisions that overturn the tax regime for more than 735,000 freelancers and individual businesses are expected within the week with the posting of the new tax bill in public consultation.

With the publication of the regulations in their final form, it will clarify the landscape for the how to calculate the imputed income of professionals but also for the discounts and exclusions, while the financial staff declares to be open to further corrections on individual issues, which, however, will not overturn the basic philosophy of the minimum income of the 10,920 euros and the minimum tax.

Expansion

The final decisions on the corrections will be made after the consultation of the bill before the bill is submitted to the Parliament, while according to information on the table of the financial staff are:

  1. The expansion of the cases for which presumptive income is fightable. According to the Ministry of Finance, the presumption of the minimum wage can be challenged by the taxpayer if he can prove based on facts that his earnings were less. However, the reasons recognized by the Ministry of Finance are limited and specific, as they include those serving their military service, hospitalization, injuries from natural disasters, etc.
  2. The treatment of cases of professionals over 65 years of age or professionals who are close to retirement age.
  3. To determine the minimum income, in addition to income from hired services (salaries, pensions) and income from rents and dividends, be taken into account. The minimum income increment factors based on years of activity, payroll costs and turnover.

Minimum Income

According to what has been announced by the Ministry of National Economy and Finance:

  • The minimum acceptable limit of annual taxable income for each self-employed person who has completed 6 years of practicing his profession cannot be lower than 10,920 euros. For those practicing the profession for more than 6 and up to 9 years, the minimum income is increased by 10% and amounts to 12,012 euros. For those practicing the profession for more than 9 and up to 12 years, the minimum wage is increased by 20% and amounts to 13,104 euros, and for those who practice the profession for more than 12 years, the minimum income is increased by 30% and will amount to 14,196 euros.
  • If the self-employed person has employees, the minimum wage is increased a) by 10% of the company’s annual payroll costs, with a maximum increase of 15,000 euros, b) by 35% to 100%, when the self-employed person’s annual turnover is significantly higher than the average annual turnover of the Code Activity Number (KAD).
  • The upper limit to which the minimum income will be able to reach is 50,000 euros.

What doesn’t change

Based on the clarifications of the leadership of the political leadership of the Ministry of National Economy and Finance, the following emerges:

  • In the case of couples who are both self-employed, the minimum presumptive income will be calculated separately for each and in no case will the income of one cover the income of the other if it is less than the minimum income, since as they emphasize it is not a presumption of living but also of presumptive income.
  • Excluded from presumptive income are those who are paid with a “block” and farmers.
  • The new system will also apply to taxpayers who obtain income from three or more Airbnb type properties as they are considered pretentious and will have to start a business. What remains to be clarified is whether discounts of up to 100% on presumptive income apply to this category from the first year of operation, i.e. from 2024.

Source: Print edition “TA NEA”