The AADE opened the electronic portal for the submission of this year’s tax returns, simultaneously revealing the new tax forms (E1, E2, E3) and the decision providing detailed instructions for completing the declaration.
The deadline for submitting the declarations normally expires on June 30, 2023, while the payment of the personal income tax, which will result from the liquidation, will be made in 8 equal monthly installments. The first is payable by 31 July 2023 and each of the following by the last working day of the following seven months.
Tax declarations 2023: The innovations brought by AADE – What are the changes
The payment of the tax, determined by declarations of taxpayers participating in legal persons and legal entities that keep aplographic books, is made in six equal monthly installments, of which the first is paid until the last working day of September 2023 and each of following until the last working day of the following five months.
If taxpayers choose to pay the amount in one lump sum until July 31, 2023, they will have a 3% discount.
It is pointed out that the settlement notes will be issued immediately by the AADE upon the finalization and electronic submission of the declarations and any tax debit balances they will indicate should be paid either once, with a 3% discount until the end of July, or in 8 monthly installments, from July this year to February 2024. It should be noted that no amount of additional income tax will be assessed to be paid if this does not exceed 30 euros per spouse, while the amount of tax less than 5 euros per spouse will not be refunded to the taxpayer.
The changes in E1
The 3 main changes in E1 of this year’s tax return are, in detail, the following:
1. To table 7 of the new form E1 of the tax return there will be one new password pair in which they will be pre-filled by the Independent Public Revenue Authority (AADE) the amounts spent in 2022 by taxpayers to pay by electronic means the fees of 20 categories of service professionals. The purpose of completing the specific expenses in these new codes is to calculate, for each individual taxpayer, an extra income tax deduction that can reach up to 2,200 euros
Every citizen who during 2022 paid, with credit or debit or prepaid cards or through e-banking or other electronic payment methods, the fees for the following categories is entitled to receive this additional tax deduction in the settlement of this year’s tax return service professionals:
a) Veterinarians
b) Plumbers
c) Refrigerants
d) Heating preservatives
e) Electricians
f) Professionals who carry out insulation, masonry, plastering, tiling works
g) Carpenters
h) Tradesmen carrying out roof and sheet metal window site work etc
i) Professionals who carry out concrete works
j) Hairdressers, barbers k) Beauticians and beauty shop owners l) Funeral contractors m) Professionals who provide massage services and other physical wellness services n) Professionals who provide cleaning services and domestic services r) Photographers p) Dance teachers, dance teachers q) Businesses that operate gyms or provide various leisure services. h) Health professionals who provide personal care and nursing (hospital activities are excluded) s) Lawyers
k) Kindergarten owners, kindergarten teachers, pedagogues.
The total amount of expenses for fees to the above categories of professions will be pre-filled by AADE in a new pair of codes from table 7 of the E1 form. That is, an amount for the debtor will be written in one code and another amount for the spouse or the other party to the cohabitation agreement in the other code.
The amount that will be pre-filled in the code for each individual-taxpayer will correspond to the expenses made in his name with his own cards or through his own bank accounts. The data for these expenses will have been sent electronically to AADE banks in which the cards have been issued and the taxpayers’ accounts have been opened.
To the pre-filled amount, each taxpayer will be able to add other expenses to the above 20 categories of pretensions that the AADE will not have recorded. During the settlement of each tax return, it will not be possible to transfer an amount from one spouse to another or from one part of a cohabitation agreement to another.
From the amount that will be written in each of these two new codes, the AADE will calculate, for each individual taxpayer, 30% and will deduct it from their total income, which comes from salaries, pensions, business-agricultural activities and real estate. The maximum amount of the deduction from the income of each taxpayer cannot exceed 5,000 euros. Given that in the personal income tax scale the maximum tax rate currently amounts to 44%, the maximum amount of tax deduction that will result for each taxpayer who has made use of this measure for 2022, reaches 2,200 euros (5,000 euro X 44%).
However, in some cases of annual income from wages or pensions of more than 40,000 euros and not more than 50,000 euros, the income tax deduction will be able to reach up to 2,300 euros, for technical reasons related to the rules for calculating the proportional income tax , as defined by the provisions of article 16 of the Income Tax Code (law. 4172/2013).
In particular, from the implementation of the above measure and the automatic calculation of the deduction in this year’s tax returns, taxpayers will save tax:
* Up to 450 euros if in 2022 they had an income of up to 10,000 euros from wages, pensions, business-agricultural activities or real estate.
* Up to 1,100 euros if in 2022 they had an income of 10,000.01 to 20,000 euros from wages, pensions, business-agricultural activities or real estate.
* Up to 1,400 euros if in 2022 they had an income of 20,000.01 to 30,000 euros from wages, pensions, business-agricultural activities or real estate.
* Up to 1,800 euros if in 2022 they had an income of 30,000.01 to 40,000 euros from wages, pensions, business-agricultural activities or real estate.
* Up to 2,200 euros if in 2022 they had an income of more than 40,000 euros from wages, pensions, business-agricultural activities or real estate.
However, in some cases of annual income from wages or pensions of more than 40,000 euros and not more than 50,000 euros, the annual income tax deduction will be able to reach up to 2,300 euros, as we have already mentioned.
2. To table 7 of the new E1 form another pair of codes has been added in which they should be filled the amounts paid by electronic means by taxpayers in 2022 for fees in 8 categories of health professionals and specifically to doctors, dentists, orthodontists, osteopaths, chiropractors, ophthalmologists, chiropractors and podiatrists. These expenses should be declared separately, as this year for the first time they count twice to cover 30% of the individual income of each taxpayer and avoid paying an additional tax of 22%.
3. To table 2 of the new E1 form there is one more new pair of codes that will concern small and medium enterprises which increased, in the last quarter of 2022, the full-time positions of their staff. In each of these codes, the debtor or the spouse, as long as they have a sole proprietorship with a gross income of up to 2,000,000 euros and have increased full-time positions by hiring new employees in the last quarter of 2022, should click next to the indication “YES » in order to get rid of the pretension fee of 400-650 euros for the year 2022.
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**Interview with Sofia Pappas, Tax Expert**
**Interviewer:** Welcome, Sofia! With the recent launch of the AADE’s electronic portal for tax returns, what should both Greek residents and foreign residents know about the new requirements for filing?
**Sofia Pappas:** Thank you for having me! It’s crucial for both residents and foreign property owners in Greece to ensure they submit their E9 forms alongside their income tax returns. This year, the process has been streamlined significantly, but everyone must file by June 30, 2023, to avoid penalties.
**Interviewer:** I see that there are some important changes in the E1 tax return. Can you summarize those for us?
**Sofia Pappas:** Of course! The major change in the E1 form is the introduction of a new section in Table 7, where taxpayers can claim a tax deduction for expenses paid to certain service professionals using electronic payment methods. This deduction can amount to a significant reduction in their taxable income—up to 2,200 euros.
**Interviewer:** That’s quite beneficial! Who qualifies for this tax deduction?
**Sofia Pappas:** Taxpayers who paid fees to a wide range of professionals—like plumbers, electricians, hairdressers, and many others—entirely through electronic means can claim this deduction. The amounts will be pre-filled in the E1 form, making it easier for taxpayers.
**Interviewer:** What does the timeline look like for submitting these declarations and payments?
**Sofia Pappas:** The deadline for declarations is June 30, 2023, and if taxpayers choose to pay their tax in one lump sum by July 31, they benefit from a 3% discount. Otherwise, they can opt for monthly installments over eight months, starting from July.
**Interviewer:** That sounds straightforward. Is there a minimum tax threshold where individuals won’t have to pay additional taxes?
**Sofia Pappas:** Yes, exactly! Taxpayers won’t owe any additional income tax if it’s less than 30 euros per spouse. In addition, if the tax is under 5 euros, it won’t be refunded.
**Interviewer:** what advice would you give to property owners, especially foreign residents, regarding their tax declarations?
**Sofia Pappas:** I would advise them to gather all documentation related to their property and any professional services they utilized in the past year. Keeping meticulous records is crucial, especially with the new deduction opportunities. They should also ensure they’re informed about the deadlines to avoid any late fees.
**Interviewer:** Thank you, Sofia, for clarifying these important changes and deadlines. It’s great to have such insights as we navigate this tax season!
**Sofia Pappas:** Thank you for having me! Wishing everyone a smooth and successful tax filing process!