The Ministry of Finance aims to tax the presumed minimum profit for individuals who have ceased their individual business activities and have established a sole proprietorship.
Specifically, according to Article 17 of the draft law “Measures to Restrict Tax Evasion,” which is under consultation, and as stated in the Regulatory Impact Analysis, “the evaluated regulation limits the possibility of tax avoidance by discontinuing individual business and forming and participating in LTD Companies.
In particular, after conducting an audit on a freelancer who had LTD Company in the past, discontinued it, and subsequently established LTD Company with the exact same purpose, a tax can be imposed on the individual if the tax resulting from the operation of the company (tax on the company’s profits and dividends, if all profits were distributed) is less than the tax the freelancer would pay if he continued his individual activity, based on the presumed minimum profit established in the present law.
In such a case, the individual pays the difference between the tax owed by the company and the tax he would pay under the presumed minimum profit from business activity. . It should be noted that in this case, the determination of the tax liability is subjective, meaning that the taxpayer can use the possibilities available to challenge the presumed minimum profit from business activity.
Article 17 applies to incomes acquired in the tax years 2023 and thereafter, according to paragraph 2 of Article 49 of the draft law.
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