For the first time this year, the average income tax paid by freelancers surpasses that of salaried employees, who (along with retirees) are usually the tax burden bearers.

Under the imputed taxation method, the distribution of tax burdens becomes fairer, as the Ministry of National Economy and Finance argues that freelancers’ actual incomes are now being taxed. The numbers speak for themselves: for the first time, freelancers with an average tax of 2,472 euros surpass salaried employees, whose average tax amounts to 1,816 euros.

Specifically:

• The average tax for freelancers covered by imputation amounts to 1,733 euros.
• The average tax for freelancers exceeding the imputed threshold amounts to 3,423 euros.

The average total burden, including the business levy (which has been reduced by 50%), amounts to 1,733 euros plus 325 euros (business levy), totaling 2,058 euros for those covered by imputation, and 3,748 euros (3,423 euros + 325 euros) for those exceeding it. Compared to 2023, the average tax for freelancers under imputation according to the previous regime was 595 euros plus a 650-euro business levy, totaling 1,245 euros. Therefore, the average additional tax amounts to 813 euros annually.

According to sources from the Ministry of Finance, “The new taxation method for freelancers represents a fairer taxation system, as, after many years, salaried employees and retirees will pay lower taxes than freelancers, without the latter being excessively burdened compared to previous years.”

The big question now is whether the increased taxes assessed this year will actually be collected. According to data from the Independent Authority for Public Revenue (AADE) for the first five months of the year, households and businesses are paying over 8 out of 10 euros of their VAT, income tax, and property tax obligations on time. Businesses are the most consistent, paying 9 out of 10 euros of their income tax on time, followed by VAT payments with a compliance rate of nearly 81%.

Specifically, AADE’s data on tax compliance by category for the period January – May 2024 show the following:

• VAT: Out of 7.378 billion euros assessed, 5.973 billion euros were collected, resulting in a compliance rate of 80.96%.
• Corporate income tax: Out of 1.968 billion euros assessed, 1.788 billion euros were paid on time, meaning the on-time payment rate for corporate income tax is 90.83%.
• Property tax: The collection rate reached 77.46%, as 685.32 million euros were paid out of the 884.70 million euros assessed. It should be noted that taxpayers began paying installments of this year’s property tax (ENFIA) bill last April. According to the data, in April, the ENFIA collection rate was 68.37%, rising to 77.15% in May.