Before (another) surprise are thousands of self-employed upon completing tax declarations, which have already begun. Many will realize that with the new presumptions (minimum income from business activity), they lose the right to deduct from their profits the losses they had in previous years.

This happens if they declare that they had a profit even €1 less than the taxable amount determined by the tax authorities. And with declared profits being low, they may end up paying a tax that is 350 times higher (or more than €3,000 extra) than they would have paid if they had declared just… €1-2 higher profit!

However, since tax declarations have already begun but 2023 is in the past and they cannot turn back time to change the financial data (income-expenditure) of the year, many may resort to the solution of tax adjustment, that is, to “legally adjust” their profits retrospectively (by deducting professional expenses they made last year so as not to incur them this year) in order to increase the declared profits and surpass the taxable amount set by the tax authority.

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What will happen this year? As indicated by a circular of the Independent Authority for Public Revenue (E.2027/2024), which provides clarifications in cases where the professional had a loss from previous years:

a) if the declared profits are less than the taxable income, then the tax is calculated on the taxable income of the professional, but the loss cannot be deducted.

b) if the declared profits are greater than the taxable income, then the tax is calculated based on the declared income, but after the loss of previous years is deducted.

This means that:

· In the first case, the right to deduct the loss for tax purposes is lost. This is removed from the accounting records but without practical effect in the pocket.

· In the second case, they will pay much less tax, although they declared more compared to the first scenario.