These are mainly changes in the filling fields of the E1 form but also in the provisions for the calculation of income tax and business tax, which the 735,320 small and medium-sized entrepreneurs and freelancers should pay particular attention to.
According, in particular, to the decision numbered A1061/24-4-2024 of the governor of AADE G. Pitsilis, the main changes in the basic form E1 of the declaration and in the way of calculating income taxes are summarized in the following points:
1 The amount of presumptive income that will be determined, for each self-employed person, based on the new objective taxation criteria of Law 5073/2023 (the “minimum amount of net income from the exercise of business activity”) will be pre-filled by the AADE in the new codes 405 -406 of table 4C2 where income from business activity is declared. If the taxpayer clicks on the pre-filled amount, an analytical table will be displayed on his computer screen in which the AADE calculations for determining the presumptive income will be displayed in detail.
2 The 10% increase in assumed income for each three years of operation of a sole proprietorship beyond the first three years of operation is calculated on the amount of the previous three years as it has been configured on a case-by-case basis after the application of the prescribed increases. Interruptions of business activity are not counted for the calculation of the increase, while a completed year is required for inclusion in a specific three-year period.
3 The presumptive amount of income resulting from the new objective taxation criteria is reduced by half (1/2) for debtors who have many children, for debtors with a disability equal to or greater than 67%, for parents of a single-parent family with minor children and for parents with children with a mental or physical disability rate of at least 67%, as long as they are unmarried, divorced or widowed who are considered dependent, for Public Passenger Vehicle (TAXI) operators with a percentage of ownership on the vehicle that does not exceed 25% and for debtors exercising the their activity and have their main residence in settlements with a population of less than 500 inhabitants or on islands with a population of less than 3,100 inhabitants (Article 28C of the Civil Code).
The reduction of the income by half takes place only once, even if more than the above-mentioned conditions apply at the same time.
Especially, regarding the intended reduction by half for Public Passenger Vehicle Operators (TAXI), in the cases of the existence of more than one vehicle, the reduction is granted if the cumulative percentages of ownership on the vehicles do not exceed 25%. The reduction is applied proportionally for the period of the year in which the above condition is met.
4 New codes 045-046 have been added to table 2 of form E1 of the tax return. These codes are filled in by every taxpayer who has an individual business and is entitled to be exempted from the determination of his income based on the new objective taxation criteria (from the determination of a minimum net amount of income in accordance with articles 28A – 28D of the Tax Code). They are also completed by every taxpayer who is entitled to a proportional reduction of the imputed income in the case of carrying out a business activity for a limited period of time based on legislative or regulatory regulation. If the taxpayer clicks on each of these codes, a detailed table will appear in which he can choose which case of exemption or reduction he belongs to: if he is a “block” employee (he is paid regularly per month with a service card from one to three employers or by 75% of his remuneration from one employer and a total of more than three, without, in any case, also having income from wages), if he is an insurance intermediary contracted with up to 2 insurance companies, if he has a coffee shop in a settlement under of 500 inhabitants, if it carried out a business activity for a limited period in 2023, based on legislative or regulatory regulation? (par. 7 art. 28A) etc.
5 New codes 047-048 were also added to table 2 of form E1 of the tax return. These codes are filled in by every taxpayer who is entitled to receive the halved reduction of presumptive income (the “minimum amount of net income of articles 28A – 28D of the Tax Code”).
By clicking on each of these codes, a new detailed table appears where the taxpayer can choose exactly which case he falls under, i.e. if he has many children or operates a taxi with an ownership percentage of up to 25%, if he has a business seat and main residence in a settlement with a smaller population of 500 inhabitants or on islands with a population of less than 3,100 inhabitants..
6 In some of the above cases of total or partial exemptions, it is necessary to submit to the competent tax authority and check specific supporting documents. These supporting documents are the following:
* Reference to a legislative or regulatory regulation that results in the limitation of the debtor’s business activity (e.g. reference to a decision of a public body to suspend the operation of the business for reasons of tax evasion).
* Certificate proving the status of a large child as a parent or an orphaned child.
* Certificate proving the status of a parent of a single-parent family with minor children, e.g. certificate of marital status or birth certificate (in the case of an unmarried mother), certificate of marital status or death certificate (in the case of a widow) or a court order granting custody (in the case of a divorce) or a private agreement filed in the court of first instance for the issuance of a divorce (consensual dissolution of marriage) or final court order of adoption by one parent or certificate of detention in a penitentiary (imprisonment of the other parent) etc.
* Traffic license for the percentage of ownership of taxi operators.
The liquidation of the declarations of the above cases will be completed after checking the supporting documents at the department responsible for receiving the declaration.
7 From the presumptive income determined on the basis of the objective criteria, all other incomes of the taxpayer, taxable and exempt, if they come from salaried work, pensions or even from agricultural activity, are subtracted.
8 In the new codes 445-446, the Tax Administration pre-fills the tax-exempt income from business activity according to Article 5C of the Tax Code, i.e. 50% of the income from “blocks” acquired by a taxpayer who moved his tax residence to Greece. The pre-filling of these codes is done only in case of determination of presumptive income based on the new objective criteria.
10 Codes 049-050 of table 7, where the total amount of consumer expenses paid within 2023 by electronic means of payment (credit or debit or prepaid cards, etc.) is declared for each spouse or cohabiting partner are pre-filled for the convenience of taxpayers , from the AADE with the possibility of change by the taxpayers. The AADE posts the electronic information available to it and the taxpayers, bearing the burden of proof themselves, can enter different amounts as long as they have the relevant receipts for retail transactions.
11 In the event that the taxpayer wants to dispute the presumptive income, which AADE will have determined for him based on the new objective criteria, not for reasons of force majeure or for other objective reasons, but because he considers that his declared income is the real one, he will he must request a tax audit to prove his claim. The request for a tax audit will be activated if the taxpayer selects one of the new codes 443-444 of table 4C2. After submitting the declaration, the settlement note will normally be issued automatically with the tax calculated on the assumed income. The taxpayer is required to fill out the questionnaire sent to him by the competent tax authority on the relevant platform no later than sixty (60) days after the deadline for submitting the income tax return, i.e. no later than September 30 of AADE in order to carry out the audit, which may last up to 12 months. Upon completion of the audit – whether the taxpayer’s allegations have been proven to be valid or the taxpayer’s allegations have not been verified and the income has been determined either at the amount of the presumptive or even above the presumptive – it will be issued by the agency that will have carry out the audit, a new corrective settlement note that will determine the amount of income tax according to the results of the audit.
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