By Chrysostomos Tsoufis

Now the AADE will have the opportunity to deal with the “big fish”. The Deputy Minister of Finance is vertical in all his public interventions that with the new system of taxation of freelancers, human resources and time are freed for the control mechanism to focus its efforts on the big tax evasion.

And the first warning shots have already been fired. His bill Ministry of Finance foresees widening the perimeter of the cases in which the AADE will intervene and apply the so-called indirect control techniques in order to calculate the real income and then the corresponding “bells” will fall.

In the already existing framework for the activation of indirect control techniques, the following cases are added for the “home” calculation of business income:

– When a loss is declared in at least three consecutive years and the method of financing the business, by which its obligations are covered, does not appear

-When there is a significant mismatch between purchases, sales and inventory

– When the gross profit rate resulting from the declared results is different from the one resulting from the purchase and sales documents

– When the company does not provide data requested by the tax administration, after two invitations.

The indirect control techniques – driven from America – enable the Tax Administration when the circumstances require it to proactively estimate or correct the amount of taxation of a company or a natural person carrying out business activity having 5 different techniques at its disposal.

Technique of the principle of proportions

With this method, the income from business activity, the outflows and the taxable profits of the controlled person are determined based on ratios and in particular, the gross profit margin.

After verifying the cost of services sold/provided and analyzing data and information from the audited person or from third-party sources, the actual gross profit margin is determined in a reliable manner, which, applied to the cost of services sold/provided, leads to the determination of business income activity of the controlled person.

Liquidity analysis technique

This technique determines the taxable amount by analyzing the income (taxable and non-taxable), the purchases and expenses (business, individual and family) and the increases and decreases in the assets and liabilities (business, individual and family) of the taxable natural person .

In the event that there is a difference then this is considered undeclared taxable material and which should be justified by the taxpayer in order not to be taxed.

Clear position technique

This technique recreates the financial history of the auditee (assets and liabilities per year) and determines taxable income. If this asset=liability difference is not justified, then it is considered undeclared taxable material and is subject to taxation.

Technique of the relation of the selling price to the total turnover

On the total volume of turnover, which is determined either from the audited person’s accounting records or from third-party sources, the selling price per unit of product/service is applied in order to determine the income from business activity. The total volume of turnover can be determined after finding relationships between the inputs (products and services) required per unit of product produced/service provided by the audited person.

Technique of bank deposits and cash expenditures

It determines income by tracking the movement of the taxpayer’s funds. Simply put, it analyzes the total deposits and balances in financial accounts as well as cash purchases and expenditures, both at the professional and family level and determines the taxpayer’s income by analyzing bank deposits and cash expenditures in various transactions.