Reduced penalties for late zero VAT returns, new cryptocurrency rules, relief for market vendors, and changes to cash payments over €500 are among the provisions in a comprehensive tax bill from the Ministry of National Economy and Finance that has been put out for public consultation.
Key provisions of the finance ministry’s tax bill
In detail:
1.Penalties: The €100 fine for late or non-submission of VAT or withholding tax returns now applies to bookkeeping-obligated entities even for zero or credit returns. This means that even when no tax is payable, the violation is penalized, but with the lowest fine. A retroactive favorable provision (from April 19, 2024) is also included, whereby €250 or €500 fines imposed for such returns are written off or offset. A special exemption for minors is also introduced: no penalties are imposed for late submission of returns, and the provision also covers parents’ returns that include income from minor children. The provision applies retroactively to previous tax years. Additionally, if a minor has commenced business activity without actual income, no business license fee is imposed. Specifically for 2023 and 2024, the provision allows for challenging presumed income.
2. Cryptocurrencies: Mandatory automatic exchange of information from crypto-asset service providers (platforms and transaction intermediaries) is established. A new monitoring framework is created to limit income concealment. Penalties are also provided for Reporting Crypto-Asset Service Providers:
*€100 for late submission of information for each Reportable Transaction.
*€300 for failure to submit or for submitting incomplete or inaccurate information, per Reportable Transaction.
* €1,000 for non-response to Tax Administration requests for providing, completing or correcting information/data within the deadline, per Reportable Transaction.
* €2,500 for non-cooperation during audits or when non-compliance with data submission rules and due diligence is established.
* €5,000 for non-compliance with information submission obligations regarding each Reportable Transaction, after audit and within the relevant deadline.
The total penalty amount per audit cannot exceed €500,000, while specifically for late submission violations the maximum limit is €10,000 per reference year. In case of recurrence, penalties are imposed at double, and for new recurrence at quadruple the original penalty.
3. Additional tax (Pillar 2): The additional tax is not deductible as a business expense. This provision mainly affects large groups and relates to the 15% minimum global taxation.
4. Tax Binding Rulings: Businesses and individuals will be able to request, upon application and payment of a fee, advance binding interpretation of tax legislation for future investments. The response is issued within 150 days and binds the administration. The fee ranges from €15,000 to €50,000.
5. Real Estate Ownership and Management Registry (REOMR): From 2027, REOMR will serve as an information source for certifying primary residence, particularly for properties in small settlements, within the framework of property tax exemption. This change is substantial, as until now primary residence status was mainly determined from the income tax return. Until REOMR becomes fully operational, primary residence will continue to be proven by the previous tax year’s income tax return. The exemption applies to residences in settlements up to 1,500 inhabitants, with special provision for certain border areas where the limit rises to 1,700 inhabitants, and with a maximum property value of €400,000
6. Payments over €500: The calculation method for the threshold changes as the total transaction value is now considered rather than individual receipts. For transactions of €500 and above, electronic payment is required. In case of violation, the penalty equals double the amount paid in cash.
7. Market vendors: Vendors in farmers’ markets have two basic reliefs on presumed minimum income:
– The 5% surcharge that burdens other professionals when their turnover exceeds the average annual turnover of the corresponding business code does not apply to them. That is, for holders of professional vendor licenses in farmers’ markets, minimum income does not increase due to comparison with the sector’s average turnover.
– The amount resulting from Article 28A is reduced by 30%. So even the already calculated minimum presumed income is further limited.
Additionally, the possibility of challenging presumed income for minors is provided.
8. Non-performing loans platform: An electronic platform is established for recording non-performing loan transactions, aimed at transparency and better market functioning.
