The draft law comprises a series of interventions that aim to modernize the country's tax system, take advantage of new technologies and strengthen the relationship of trust between the State and citizens on tax matters.
Among them is the implementation already this year of the important reform to exempt 1 million taxpayers, who have income exclusively from wages and pensions, from the obligation to submit a tax return.
In these cases, the tax return will be automatically drawn up by AADE and will also be finalized automatically, while the taxpayer will have the opportunity to raise objections within the deadline for submitting the tax returns.
The main provisions of the bill include the following:
Pre-filled tax returns
The process of drawing up and submitting tax returns is practically abolished for taxpayers who have incomes 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.
Abolition of the obligation to keep tax books
Taxpayers who keep books based on the simple accounting system (mainly freelancers 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 myDATA platform. The previous regime foresees a fine of 2,500 euros for not presenting the books. Furthermore, the deadline for providing the information, which AADE requests from taxpayers, increases from 5 to 10 days.
Digitization of procedures - Abolition of correspondence from and to AADE
- The tax administration's communication 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 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.
Faster issuance of tax certificates
Interoperability between the State bodies is adopted so that the AADE is informed about the existence or not of overdue debts of the citizen and accordingly grants or not the tax awareness certificate. In practice, with this regulation mainly the OTAs but also other public bodies will communicate with the AADE only electronically (instead of the letters they exchange 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.
Specific time frame for tax audits
A maximum time limit is set 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 provided that during this time it is possible the completion of the audit. Today there is no provision for the maximum duration of the audit, which is determined by the officials who carry it out. The concepts of partial, full, on-site or remote control are also clarified.
Finally, the possibility of interim tax determination is established, in cases where there is a combination of criteria from which there is a direct 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.
Limitation
The notification of the tax determination act must be made within the five years provided for the statute of limitations. Until now, it was sufficient within the five-year period that only the issuance of the deed had been done, while from now on it must also have been notified to the taxpayer.
