The Ministry of National Economy and Finance, in collaboration with AADE, are proceeding with the implementation of the road map they have planned, which brings on the one hand much less suffering for citizens and, at the same time, a fairer and above all more efficient tax system.
Through the new tax bill that has been put into consultation, a partial change is attempted in the way audits are carried out, by establishing stricter rules, both on the side of the audited and the auditor, so that the duration of an audit is limited.
At the same time, through the bill, an attempt is made to close the “windows” that some businesses, mainly seasonal ones, used to avoid paying the prescribed taxes. In this direction, the intermediate tax determination is established for specific categories of businesses, which pay a VAT installment and then disappear.
At the same time, the automatic completion and submission of tax returns for approximately 1 million taxpayers with incomes exclusively from wages and pensions is legislated, while the presentation of books for inspection by those who keep simple books is abolished.
1. Pre-filled tax returns: The process of drawing up and submitting tax returns is practically abolished for taxpayers who have income exclusively from wages and pensions (calculated in 1 million citizens). The tax return is automatically pre-filled by the AADE and is also automatically finalized if the taxpayer does not raise objections within the deadline for submitting the tax returns. Currently, only the prefilling of income from wages and pensions is applied, but the automatic finalization of the declaration does not apply.
2. Abolition of the obligation to submit books: Taxpayers who keep books based on the simple accounting system (mainly self-employed and small businesses) are exempted from the obligation to submit their accounting records to the tax administration, as long as all relevant data (income – expenses) are transmitted to the platform myDATA. The previous regime foresees a fine of 2,500 euros for not presenting the books.
3. Provision of information: The deadline for the provision of information, which AADE requests from taxpayers, is increased from 5 to 10 days.
4. Digitization of procedures – Abolition of correspondence from and to AADE: The communication of the tax administration with taxpayers will be done exclusively by digital means. Paper correspondence, which has been applied to a large extent until today, is abolished. All documents will be shared by posting them to the account that every natural or legal person has in the AADE information system. The taxpayer will receive a notification in his e-mail and will enter the information system with his codes to take note of the document. It is noted that this procedure is already applied for a series of notifications from AADE to the taxpayer (e.g. when an installment of income tax is paid, AADE sends an email to the taxpayer notifying him to enter the information system to “download” the proof of installment payment). Communication with the “classic” methods (letters, performances, etc.) will only be done exceptionally, in very special cases.
The benefits
The main benefit from the digitization of procedures, beyond speeding them up, is their accurate recording, as a result of which the time, form and content of the communication cannot be disputed in court, relieving the Courts at the same time.
The maintenance of all the records of the Tax Administration should also be done digitally, while the paper file of the AADE, which includes the documents it issues and receives, is digitized at the same time.
5. Faster issuance of tax information: Interoperability is adopted between the State bodies so that the AADE is informed about the existence or non-existence of overdue debts of the citizen and accordingly grants or not the certificate of tax information. In practice, with this regulation mainly the OTAs but also other public bodies will communicate with the AADE only electronically (instead of the letters exchanged today), either for the prohibition of providing information or for the lifting of this prohibition. Thus, cases are treated e.g. that the taxpayer has paid debts to the Municipality but cannot get tax information because AADE has not been informed about the payment.
6. Specific time frame for tax audits: There is a maximum time limit for the completion of the tax audit, in principle one year from the notification of the audit order with the possibility of extension for 6 months if the audit has started in the meantime and another 6 months with the condition if during this period it is possible to complete the audit. Today there is no provision for the maximum duration of the audit, which is determined by the officials who carry it out.
7. The concepts of partial, full, on-site or remote control are also clarified: The possibility of intermediate tax assessment is established, in cases where there is a combination of criteria from which there is an immediate and imminent risk of tax evasion (e.g. seasonal newly established businesses, or when there are specific indications that the taxpayer intends to leave the country). Today, there is a relevant provision in force for the preventive determination of the tax, which, however, is not practically applied, as it only concerns cases where there is evidence of fleeing the country. Now, the provision becomes more specific and effective in its application. The possibility of interim tax determination was deemed necessary by AADE as it is often observed that seasonal newly established businesses operate for a short period of time and close overnight without paying a single euro of tax.
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