Refunds of 375 euros for those who declare receipts

The phenomenon of refunding taxes is growing to epidemic proportions for the taxpayers who were first in submitting their statements for 2011.

So far 1.235.125 tax clearances have been returned, 39,81% of which are in credit, 18,65% in debit and 41,54% are neutral (zero).

The state has already returned a total of 464,1 million euros to 491.700 beneficiaries, i.e. 375 euros on average for each return so far. On the other hand, it has received 593,4 million, which are the tax payments resulting from the debit statements.

Until last year, these percentages were at 25% for credit and debit statements alike, and 50% for zero statements. This means that returns have increased by almost 80% from last year. According to estimates by the ministry, the biggest returns go mainly to civic employees who, while declaring the highest incomes over time (higher than doctors, lawyers, plumbers, etc.), have seen their wages dramatically slashed since April 2010, leading to a continuous descent to lower levels of income taxation.

However, it is almost certain that there is abuse of the measure, since many taxpayers have included receipts for expenditure of 15.000 euros in their statements, which is the highest amount in order to gain the maximum benefit for tax reduction.

But this measure has benefited – albeit marginally and for the first time – all those who so far have been on the tax-free level, and their income has been less than 800 euros per month. This because each additional receipt than the required minimum is actually "worth" as much as 10% of its value, instead of returning tax to taxpayers which they have not paid in advance and have no right to collect back.

In any case, the state is now called upon to refund money that it would not have returned in previous years. However, the Finance ministry also refers to the cap of 1.500 euros in returns (ten years in effect) to delay its payments, saving time to supposedly check out if the receipts and all other support documents are correct or not.

Nevertheless, the final outcome as to effectiveness of this measure will show up in the fall, along with the collection of VAT and income taxes from businesses and professionals who declared the corresponding revenue, as shown by the receipts that were issued with the incentive of tax refunds to individuals.