Before 2019 the Law on Personal Income Tax provided that the taxpayer, who in the taxation year gained non-taxable income of total amount over 4000 euros, is obligated to submit an annual income declaration to the State Revenue Service (SRS), while starting from 1 January 2019 the duty to declare the non-taxable income gained in the year was in effect only if that income exceeds 10 000 euros.
A full list of non-taxable income is available here.
Yet things aren’t so simple actually. On the one hand, the new provisions are very convenient and decrease the administrative burden. On the other hand, the non-declared income can lead to questions from the SRS, therefore one should be ready to provide justification.
Already since last year, in accordance with Section 22 of Law on Taxes and Duties, credit institutions are reporting to the SRS about the individuals, in whose accounts during the previous year the total sum of turnover of debit or credit within one credit institution amounted to 15 000 euros or more, and the amount of income might be exceeding the declared one. It may cause a situation when, for example, one has gained income of 9000 euros from selling a car, which is viewed as non-taxable income and basically does not oblige the person to declare this income. Yet if this amount was gained in addition, for example, to salary income and in total the amount in the credit institution exceeds 15 000 euros, then the SRS might want to ask questions, and one will have to provide justification to this significant difference in numbers.
The SRS receives information about account balance on the last day of the previous calendar year, as well as total turnover of debit and total turnover of credit, but not the information on the particular transactions. In case of inconsistency between the actual and the declared income, which in such cases may occur, one should be able to explain it and provide justification for that. So one should carefully consider, to declare or not to declare. Especially if the annual income from the salary are small or absent at all, but there was non-taxable income, which is allowed to not be declared according to the law, because it does not reach 10 000 euros.