Good news is coming for the self-employed. According to the Tax Agency, this group of workers – historically one of the most punished in the country – could benefit from up to four deductions in the coming years.
The Tax Agency is currently studying increasing the personal income tax deduction for the self-employed up to 10%. This would allow them to deduct expenses that are difficult to justify, which would include meals, telephone, gasoline, etc.
So far, self-employed people can only apply a 7% deduction for expenses that are difficult to justify based on its net performance. While the situation of corporate self-employed workers is even more suffocating, since they can only deduct 3%.
This measure has been under study by the Treasury for around a year, and during the next few days – it should be before the end of the year – the final document of this reform will be presented, which, yes, will come into force from January 1, 2025, as stated in the European Directive.
Another of the measures that would be close to being executed by the Tax Agency would be to reduce the income threshold from 85,000 to 80,000 euros annually by the self-employed. The objective of this is to enable them to benefit from the VAT exemption.
According to this measure, those self-employed who earn less than 80,000 euros per year will enjoy new advantages: They will not be forced to present VAT invoices, and they will not have to make the quarterly or annual declaration of this tax. Therefore, the expenses of your activity could be deducted through personal income tax.