New poll tax through self-completion!

Self-completion will be significantly more expensive from 2011 than it is today.

Doctors, lawyers, engineers, notaries, artists, journalists and electricians, even delivery persons that get paid by means of a services rendered receipt block and keep income-expenses books,  who want to use the measure of 2011 for 2010 incomes, will see first hand that the calculation for self-completion, with which the traders actually give their little something to the state to buy their peace of mind against a possible tax audit, has changed.

Based on the circular issued by the ministry of Finance, the professions that exercise self-regulation when they file their tax returns will not be taxed at just 20% -50% of their incomes (depending on the rate of profit only applicable to their area of business) as they had been for years under the “Alogoskoufis system”.

Instead, as the case has been for businesses, they will now be forced to declare not only bigger profits but also a gross income greater than what they really made in order to be taxed under their “adjusted” net profits.

As indicated by the circular, purely self-employed business persons should indicate a gross income equal to or greater than that obtained through the procedure laid down purely for business operating in the services sector.

So, they must declare an amount of gross revenue at least equal to or higher than that obtained by multiplying “the sum of costs and expenses”, with its reduction factor in gross revenue.

The reduction factor is the one taken from the fraction with 100 as the numerator and 100 as the denominator minus the statutory net rate of pay.
 
Example:

During the accounting period of 01/01/2010 to 12/31/2010, a natural person who exercises his profession - e.g. a lawyer (50% net wage factor) - and keeps K.B.S. second class records, presents the following data based on his/her books and records:

* gross income: 120.000 euros
* costs and expenses (including attributable depreciation): 70.000 euros

According to this, the person wanting to enter self-completion for this particular period would have to consent to being taxed for gross income of 60.000 euros (regardless of the costs reducing the declared earnings).

In the 2011 fiscal year tax returns, he/she will have to declare a gross income at least equal to 140.000 euros [that is, 70.000x(100/100-50)].

In the case where there is no rate of net income for the self-employed, the average rates of net pay shall apply (usually set at 47.50%).

For professionals with a number of net profit factors, the average weighted factor is applied, calculated by dividing the total net profits, generated by applying the net salary coefficients by category of gross income, by the total gross revenue of the accounting period.