Taxing times approaching!

As we head into April, it is worth noting that it is time to submit accounts to the tax agency, April 11 being the most important date, and whilst hopefully your accountant will already be prepared for the deadline, there are many self-employed workers who it is believed do not realise the date is so important in their financial operations.

Self-employed workers are considered by many as one of the most defenceless in the social system. They are among those who give the most, but they are also the ones who receive the least in return.

With the arrival of the new year, the new real income contribution system began to be applied. This will cause all those who are registered as self-employed to have to declare their income regardless of the amount. But this will affect next year’s declaration, in 2024.

Many wonder if they have an obligation to comply with the Treasury despite the fact that their income has been very low. From the Tax Agency they clarify that those who had net income last year above 1,000 euro must present it.

The tax office has also clarified some of the requirements for an expense to be deductible.

In the first place, they require that the expense be adequately justified. In addition, it must be linked to the economic activity carried out by the self-employed worker.

It is also required that the expense be duly recorded in the accounting or in the mandatory record that must be kept. Once you verify that there is documentation, relationship and registration, you will be able to consult the twenty variables available. It is worth paying close attention to this if with this we manage to save a few euros when making the personal income tax declaration.

What can be deducted in the income statement?

The list of concepts that can be deducted in the Treasury are numerous. Among them, salaries, extra payments, payments in kind and contributions of the workforce to Social Security.

Also, employee expenses for travel and insurance policies. As for the staff, they will also deduct expenses for training or gifts, such as Christmas hampers.

The Tax Agency also includes royalties and leases among the deductions. To this it is possible to add the consumption of gas, water, electricity or telephony that occurs in the place where the task is carried out. There is also the disbursement that implies the repair, maintenance and conservation of the machinery.

Mention must also be made of financial expenses. Among them are surcharges or interest as long as they do not exceed 30% of the declared annual profit.

The Treasury also incorporates the contributions of the self-employed or corporations, associations or chambers into the possible deductions. Also, those works that are commissioned to other companies by way of subcontracting. The same will happen with compensation, which can be caused by dismissals or early retirement.

In view of the personal income tax declaration, the acquisition of raw materials or contributions to workers’ insurance will also be taken into consideration. It is also joined by taxes such as the IAE, IBI and fees that do not present a sanctioning nature.

The disbursement in advisers, management or lawyers will also be included in the deductions chapter. In addition to the amounts recorded as amortization of tangible, intangible assets or real estate investments. The last two options are the purchase of professional publications or expenses for attending conferences, congresses or courses.

Of course, all of this might seem very complicated, which is why it is important to assign an accountant if you might get lost I the processes. Your accountant should be trusted and reliable of course, so do your homework, but do it quickly, as that deadline is now little over a week away.

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