HOW AN EMPLOYEE CAN AVOID BECOMING A TAX DEBTOR

Six things that are important for every employee – whether you are an entrepreneur, a civil servant, or a teacher… If you don’t keep track of them, you might become a tax debtor to the state!

#1
In the Electronic Declaration System (EDS), you can view the projected monthly non-taxable minimum, and also find the Personal Income Tax and social contributions paid for a specific person by month.

#2
Information about an individual’s calendar year income can be found in the EDS section “Inquiries,” by selecting the option “Prepare new inquiry” / “Inquiry about an individual’s income” and specifying the year for which the information is needed.

You can ask your accountant for advice, but objectively, the employer’s accountant will not always know the full extent of an individual’s income during the year, as there could be several sources of income.

#3
According to the established procedure, the SRS’s projected monthly non-taxable minimum for each of us for the calendar year is calculated twice – in December of the pre-taxation year and in July of the current year. Accordingly, the calculation performed in July also provides for a recalculation of the non-taxable minimum, which corresponds to the individual’s current situation.

#4
Starting from October 1, 2018, the SRS provides income calculation for individuals and, upon detecting an exceeded threshold, automatically marks the non-application of the non-taxable minimum until December 31 of the calendar year.

#5
The goal of the newly introduced functionality in EDS is to enable any of us as taxpayers to mark the non-application of the non-taxable minimum ourselves, if income has already reached or will reach in the future the amount above which the annual differentiated non-taxable minimum is not applied, which is 12,000 euros in 2020.

#6
If it is known that monthly income during the calendar year will exceed 1,000 euros, then it is advisable for each of us to mark the non-application of the non-taxable minimum in the SRS EDS system ourselves, to avoid a tax debt in the future. The main principle to remember – the lower the income, the higher the non-taxable minimum applied!

P.S. Next time – something else useful for you. But for now – I invite you to fill out the questionnaire so we can finally discuss your company’s situation and potential risks from an accounting perspective! The questionnaire can be found here.