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Freelancers, average monthly net income 1400 euros/ They will pay 75 million euros in tax

2024-04-29 09:47:00, Ekonomi CNA

Freelancers, average monthly net income 1400 euros/ They will pay 75 million

There are about 29,000 free professionals practicing their profession in the country, according to official data.

Among them are accountants, accounting experts, lawyers, lawyers, real estate agents, dentists, doctors, etc.

They are mainly registered as small businesses and self-employed, while until the end of last year they were subject to taxation in the same way as small businesses, being charged with the payment of social security and local taxes, while the tax profit was zero.

In 2023, all 29 thousand freelancers have declared a total income of 85 billion lek in 2023, according to data from finance, or about 810 million euros.

The income generated by freelancers is only 2.5% of the total income declared by businesses in the country. (In total, businesses in the country circulated in 2022 about 3.3 trillion lek, or about 32 billion euros, according to the Structural Survey of INSTAT).

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December 30, 08:41

The net profit declared by the 29,000 freelancers in 2023 was 51 billion ALL, or 490 million euros, according to tax data.

Self-declared earnings are based on self-declarations made at the end of the year, after deducting the year's expenses. On average, it turns out that a freelancer has profits, or net income that remains after deducting expenses of about 1400 euros per month (490 million euros/29 thousand professionals).

From January 1, 2024, with the introduction of the new law on income tax, self-employed people with income up to 14 million ALL will be taxed with 15% tax on net profit and on this amount with 23%. With the implementation of this new rate, the net income of freelancers drops to less than 1200 euros/month.

No new form will be made/ From January 1, 2024, self-employed professionals will use the existing forms for declaration
December 18, 08:38

For the year 2024, the installments of the simplified profit tax, which were issued to the businesses in the system in April, were calculated on the declarations of the net profits of the year 2023. The professionals did not even manage to deduct the rate of 30% of the expenses recognized by law, when their income is up to 10 million ALL, because the new declaration was not prepared.

Based on the declaration of net profits for 2024, it turns out that 29,000 self-employed people will pay about 7.6 billion ALL (or 75 million euros) in simplified income tax.

This amount is twice as high compared to the initial forecast of 3.3 billion lek published in the 2024 draft budget report, as the calculations were made based on the 2022 declarations.

The sum of 7.6 billion lek is 12% of the profit tax collected in the budget for 2023. (according to the fiscal indicators of the Ministry of Finance, income from profit tax in 2023 was 64.5 billion lek), or 1.2% of the total of budget revenues (budget revenues were ALL 643 billion in 2023).

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However, this is a preliminary payment, as the calculations are based on the declarations of 2023. At the beginning of 2025, when businesses make real declarations of income and expenses for the year 2024, or choose the recognition regime of 30% of expenses , installments will be reviewed. If the entity turns out to have paid too much, this amount will be carried over to the next year, if it has paid less, it will pay the difference. It remains unclear how the overpaid obligation will be returned, if the entity decides to close the activity.

Taxes have clarified that the a priori recognition of expenses in the amount of 30% for taxpayers, who exercise an activity as "Professional Service", which is optional, is applied according to the new Law only in the declaration of profit for the year 2024, which is carried out by March 31 2025.

Meanwhile, the income tax law has been taken to the Constitutional Court by three interest groups. The initiators of the complaints estimate that the law violates equality between taxpayers, the principles of the rule of law, legal security and violates competition.

In the event of its non-abolition by the Constitution, lawyers, accountants and other experts warn of immediate effects, which will be felt with the artificial increase of fees for services provided by freelancers, evasion, closure of businesses and emigration of the lower class. middle./ Monitor.al