More than 2.8 million taxpayers declaring incomes between €10,000 and €20,000 will come under scrutiny this year by the Independent Authority for Public Revenue (AADE), to determine whether their reported expenses match their income.
The tax authorities, using artificial intelligence and data cross-checks from banks, accounts, POS systems, and platforms like Airbnb, are combing through every possible piece of information that might reveal hidden income or abusive collection of state benefits.
The focus isn’t just on the “usual suspects” like freelancers, but also on salaried employees, pensioners, and landlords who declare low income but show signs of significant consumer or asset activity. In dozens of cases, the tax office identified bank transactions or expenditures exceeding €100,000 annually from taxpayers who had declared less than €10,000 in income.
These audits are not limited to signs of luxurious living. AADE is examining whether mismatches between income and expenses can be explained through legitimate means. If not, indirect methods of income assessment will be applied, such as liquidity analysis, deposit tracking, cash usage, and assessment of a taxpayer’s net worth.
Taxpayers with significant discrepancies will be asked to provide explanations. If they fail to justify the differences, the undeclared income will be taxed at 33%, a 50% fine will be imposed on the additional tax, and interest penalties will be added.
There is also a particular focus on individuals who may have artificially reduced their reported income to qualify for benefits, housing or student support programs, or tax exemptions. AADE will cross-check tax declarations against bank balances, private school fees, real estate and vehicle purchases, supermarket spending, private healthcare expenses, insurance payments, and data from digital platforms.
Hundreds of mismatches have already been discovered. In the first audit wave, individuals with minimal income were found to be spending up to ten times more. The 2025 plan includes over 120,000 data cross-checks and at least 10,000 administrative tax assessments. Short-term rentals without a declared registration number, businesses with zero VAT filings, and hotels with falsified booking data are also under investigation.
The dual objective of AADE is to identify undeclared income and ensure those declaring low income genuinely live on it. This new wave of audits uses advanced tech tools, database integration, and big data analysis to enforce transparency and compliance.
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