Evidence (receipts): What applies this year, what changes from 2022 for salaried retirees, farmers, self-employed

Millions of taxpayers who during the current year earned income from salaries, pensions, business activities and real estate must by 31-12-2021 have paid by electronic means of payment, ie by bank cards or via e-banking, expenses for purchases goods and services totaling 30% of their annual income for the current year.

They should, therefore, make sure to cover until 31-12-2021 the amounts remaining until their electronically paid expenses for purchases of goods and services reach 30% of the estimated amounts of annual income for 2021.

In case they do not cover 30% of this year’s annual income with electronic payment of expenses, they will be asked to pay in 2022, with the income tax returns for 2021, an additional tax equal to 22% of the uncovered difference. For example, if a taxpayer whose annual income for the year 2021 amounts to 30,000 euros makes electronic payments of expenses totaling 6,000 euros throughout 2021, which correspond to 20% of his annual income, he will be required to pay an additional tax of 22% on the unpaid 10% of his annual income, ie an amount of 660 euros (22% x 10% x 30,000 euros). In other words, he will pay 22% tax on the difference between 20% of his income, which he covered, and 30%, which he should have covered.

The obligation to cover 30% of the annual real income with electronic payment of expenses – which was legislated in 2019 and temporarily amended for the tax year 2020, in order to completely exclude those taxpayers who were financially affected by the coronavirus epidemic during the previous year, but and to impose a penalty of less than 22% on the remaining non-excluded who failed to cover 30% – returned to full force in the tax year 2021.

Exemption from the 30% rule applies to certain special cases of taxpayers who are over-indebted. These taxpayers will have to cover smaller percentages, of the order of 20% or even lower.

For taxpayers belonging to certain vulnerable social groups, such as the elderly, the disabled and the long-term hospitalized, as well as for some other groups of citizens there is a complete exemption from the obligation to pay expenses totaling 30% of annual income by card or other electronic means of payment. For the cases of these taxpayers, the obligation to collect and hold receipts of retail transactions worth up to 30% of the annual income does not even apply.

Analytically, the provisions of paragraph 6 of article 15 of the Income Tax Code (Law 4172/2013), which return from normal tax year 2021 (after the exceptional exceptions and amendments to the most favorable made specifically for the tax year 2020 due to the economic consequences of the coronavirus epidemic), provide for the following:

1)Every taxpayer who is employed, retired, mainly a farmer or self-employed, as well as every taxpayer with rental income must have incurred by the end of this year expenditures for purchases of goods and services totaling equal to 30% of his individual real income. In order to be recognized, these expenses must be paid by credit or debit cards or other electronic means of payment (prepaid cards, payments via e-banking, etc.) and the relevant retail receipts must have been issued for them. The income taken into account for the calculation of 30% does not include the special solidarity contribution for those who continue to pay it, ie for civil servants,

2) The maximum amount of expenses that must have been paid by the end of this year by electronic means of payment is  20,000 euros.

3) From the obligation to have covered 30% of the annual real income with expenses for purchases of goods and provision of services paid by electronic means of payment are excluded those taxpayers who will have incurred within 2021 expenses for income tax payments of natural persons and ENFIA installments of loans and rents, which in total exceed 60% of the annual real income. These taxpayers must cover 20% of the annual real income with expenses for purchases of goods and provision of services paid by electronic means of payment. However, in order for this reduced rate to apply, the expenses for taxes, loans and rents must have been paid by electronic means of payment.

4) For each taxpayer whose bank account has been confiscated, the required spending limit is limited to a maximum of 5,000 euros.

5) In any case, a taxpayer who fails to make the required total amount of electronic payment of expenses, the “uncovered” amount will be taxed at 22% in 2022, when the tax return for income of 2021 will be cleared. .x., in case the annual individual income amounts to 10,000 euros, the required amount of expenses for the year 2021 amounts to 3,000 euros (30% of 10,000 euros). If the taxpayer who has this income makes a total amount of electronic payments of 1,000 euros, then he will be charged with an additional tax of 22% on the “uncovered” difference of 2,000 euros, ie he will be required to pay an additional tax of 440 euros (2,000 euros x 22% ).

6)Expenditures taken into account to cover up to 30% of the annual real income include most of the daily, monthly and annual expenses of each household, such as expenses for the purchase of food, beverages, clothes, shoes, bedding, stationery, cigarettes, sanitary and cleaning items, for purchases of electrical, electronic appliances, furniture and other durable household items, the expenses for all kinds of repair services, as well as the expenses for payment of DEKO and utility bills, for tuition fees, medical examinations, medical hospitalizations and insurance premiums. Excludes payments for rent, loans, taxes and fees in favor of the State, as well as expenses for the purchase of real estate, cars, motorcycles (excluding bicycles), boats, airplanes, aircraft,

 7) The obligation to cover 30% of the annual real income with expenses for the purchase of goods and services paid by electronic means of payment are completely excluded:

a) Taxpayers aged 70 and over.

b) People with a disability rate of 80% or more.

c) Taxpayers who are in legal aid.

d) Tax residents of the EU or the EEA, who are required to submit a declaration in Greece.

e) Public officials and civil servants serving abroad, as well as tax residents of Greece living or working abroad.

f) Minors who are required to file an income tax return.

g) Those who serve their compulsory military service.

h) Taxpayers who reside permanently in villages with a population of up to 500 inhabitants and on islands with a population of less than 3,100 inhabitants, according to the latest census, unless they are tourist sites.

i) Taxpayers who are beneficiaries of Social Solidarity Income (KEA).

j) Taxpayers who are in a state of long-term hospitalization (beyond 6 months).

k) Those who live in a nursing home and a psychiatric store.

l) The prisoners.

Every taxpayer who falls into one or more of the above 12 “exceptions” cases does not even have to collect and preserve paper receipts worth 30% of the total annual real income.

Evidence: What changes from 2022 – Who is eligible for additional discount 

An additional tax deduction of up to 2,200 euros will be entitled from 2022 and every subsequent year, those taxpayers who pay by electronic means of payment the fees in 22 branches of craftsmen and freelancers. From next year, the new tax incentives for the use of electronics through payment will be fully implemented, which were announced, among many other measures, by Prime Minister Kyriakos Mitsotakis from the “step” of the 85th TIF. According to what the Prime Minister had mentioned and the Minister of Finance Christos Staikouras had stated, from January 2022 until 2025, 30% of the expenses that will be made every year by the taxpayers with electronic means of payment to specific professional branches will be deducted from the taxable their income, in the tax returns of the following year. The amount of the deductible expense will not exceed 5,000 euros. Given that in the personal income tax scale the maximum tax rate is currently 44%, the maximum amount of tax deduction that will result for taxpayers who will use this measure will reach 2,200 euros (5,000 euros X 44 %).

This measure will be applied additionally, ie it will not abolish the obligation of taxpayers to pay by electronic means of payment costs for the purchase of goods and services in the total amount of 30% of the annual individual real income. In fact, according to what the Prime Minister has announced, the expenses for medical, dental and veterinary services will be “counted” in duplicate to cover 30% of the annual real income with expenses paid through electronic transactions.

In more detail, from the tax year 2022, ie from the tax returns that will be submitted in 2023 for 2022:

1) 30% of the expenses incurred in the previous year through electronic payments (via credit or debit or prepaid cards or via e-banking ) will be deducted (deductible) from the taxable income of each individual person for services provided by 22 specific self-employed categories, in which the level of electronic payments is low and therefore high tax evasion is expected. The amount that will be deducted will not exceed 5,000 euros. This measure will be valid for up to four years, ie from the tax year 2022 to the tax year 2025 (from the tax returns of 2023 to the tax returns of 2026).

From the implementation of the above measure, taxpayers will be able to avoid tax every year:

* up to 450 euros if they have an annual income of up to 10,000 euros,

* up to 1,100 euros if they have an annual income of 10,000.01 to 20,000 euros,

* up to 1,400 euros if they have an annual income of 20,000.01 to 30,000 euros,

* up to 1,800 euros if they have an annual income of 30,000.01 to 40,000 euros,

* up to 2,200 euros if they have an annual income of more than 40,000 euros.

 Receipts from doctors, dentists, veterinarians will be counted in duplicate

2) The expenses incurred annually by each natural person for visits to doctors, dentists and veterinarians, examinations in private diagnostic centers and for other medical services, except the purchase of medicines and hospitalization, will be “counted” in double for the cover 30% of the annual real income with expenses paid through electronic transactions. E.g. an expense of 80 euros for payment of a fee to a doctor, due to a visit to his office, if paid by credit or debit card, will be taken into account as an expense of 160 euros to cover 30% of income with electronically paid expenses.

Source – eleftherostypos.gr

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