What benefits for taxpayers from the new digital relationship with the IRS

Exclusively digital will be the citizen relationship from now on, thus writing the epilogue to images of the past with incredible queues and suffering for thousands. At the same time, the cordon around short-lived “ghosts” companies that never pay taxes. The Ministry of National Economy and Finance, in collaboration with AADE, is proceeding with the implementation of the road map they have planned, which brings a lot less trouble for citizens and at the same time a tax system more fair and above all more effective. Through the new tax bill that was put into consultation, a partial change is attempted in the way the controls are carried out, by establishing more strict rules, both on the control side and on the auditor, so that the time of a check is set. At the same time through the bill, an attempt is being made to close the “windows” exploited by some businesses, mainly seasonal ones to avoid paying the planned taxes. In this regard, the intermediate determination of tax on specific categories of undertakings, which pay a VAT dose and then disappears, is established. At the same time, the automatic completion and submission of tax returns for around 1 million taxpayers with income exclusively from salaries and pensions is regulated, while the presentation of books for checking by those keeping simple books is abolished. Let us look in detail at the basic provisions of the bill: 1. Pre-filled tax returns: The procedure for drawing up and submitting tax returns is practically abolished for taxpayers who have income exclusively from salaries and pensions (calculated to 1 million citizens). The tax declaration shall be completed automatically by the ADE and shall also be finalised automatically if the taxpayer does not object within the time limit for submitting the tax returns. It is now only possible to supplement wage and pension incomes, but the declaration is not automatically finalized. 2. Removal of obligation to produce books: Tax collectors who keep books based on the simplified accounting system (mainly skilled and small enterprises) are exempt from the obligation to provide their accounting records to the tax administration, provided that all relevant data (incomes – expenses) are transmitted to the myDATA platform. The previous scheme provides for a fine of EUR 2,500 not to produce the books. 3. Information provision: The deadline for the provision of the information requested by ADE from taxpayers is increased from 5 to 10 days. 4. Digitation of procedures – Removal of correspondence to and from AADE: Tax administration communication with taxpayers will be done exclusively by digital means. The written correspondence which has been applied so far is abolished to a large extent. All documents will be communicated by posting them on the account of any natural or legal person in the AADE information system. The taxpayer will receive a notification in his email and enter the information system with his passwords to obtain the document. It is noted that this procedure is already in place for a series of notices to the taxpayer (e.g. when an amount of income tax is paid, AADE sends an email to the taxpayer informing him to enter the information system to download the payment receipt). Communication with the “classical” methods (letters, performance, etc.) will only be done exceptionally in very specific cases. The benefits The main benefit of digitizing the procedures, beyond their acceleration, is their accurate capture, thus the time, form, and content of communication cannot be called into question at the same time as the Courts. Compliance with all tax administration records should also be done digitally while the written file of AADE containing the documents it issues and receives is digitized. 5. Faster the publication of tax information: Interoperability between public bodies is hereby adopted so that ADE is informed of the existence or non-recoverable debts of the citizen and, respectively, to issue the tax information certificate. In practice, by this regulation, the TTAs and other public bodies will communicate only electronically with AADE (instead of the letters they exchange today), either on the prohibition of the performance of information or the lifting of this prohibition. Thus, cases are dealt with e.g. when the taxpayer has paid debts to the Municipality but cannot obtain tax information because AADE has not been informed of the repayment. 6. Specific timeframe for tax audits: A maximum time limit shall be set for the completion of the tax audit, in principle one year from the notification of the audit order with an extension option for 6 months if in the meantime the audit has started and another 6 months provided that the audit can be completed during this period. There is currently no provision for the maximum duration of the audit, which is determined by the officials carrying out it. 7. The concepts of partial, complete, on-site or remote control are also clarified: The possibility of interim tax determination shall be established where there is a combination of criteria from which a direct and imminent risk of tax evasion arises (e.g. seasonal newly established enterprises, or where there is specific evidence that the taxpayer intends to leave the country). Today, there is a provision in force for a preventive determination of the tax, but it does not apply in practice, as it only concerns cases where there is evidence of a departure from the country. Now, the provision becomes more specific and effective in its application. The possibility of intermediate tax determination was considered necessary by AADE as it is often observed that seasonal newly established enterprises operate for a short period of time and close from one day to another without paying a single euro tax. Source: RES-AE