Simplified accounting: tax authority alert regarding declared revenue and costs

With regard to the first of the two points mentioned, it should be noted that the tax authorities compare the year’s turnover with bank receipts, overlooking the fact that, from a financial perspective, not only turnover but also VAT on invoices issued is credited to the current account. In other words, for an invoice of 100, plus VAT of 22, and a bank deposit of 122, the tax authorities compare 100 in revenue against financial receipts of 122, highlighting an anomaly that does not, in fact, exist.

Furthermore, as only all incoming transactions in current accounts are counted, in the case of a business with multiple bank accounts – perhaps even with different banks – even simple bank transfers are recorded as receipts.

Consider the following example: the taxpayer holds three current accounts in the company’s name and receives an invoice payment of 100 into account A. They then transfer 100 from Account A to Account B and, subsequently, transfer a further 100 from Account B to Account C. In the tax questionnaire in question, bank receipts total 300 against a single invoice collected for 100, again highlighting a discrepancy that does not actually exist.

As regards costs, however, the matter is more straightforward: in 2021, there was no obligation for flat-rate taxpayers to issue electronic invoices and, therefore, in all likelihood, any costs not recorded in the SdI will be found amongst the paper invoices issued by such taxpayers, amongst occasional self-employed services, and amongst any further residual expenses arising from non-electronic costs (for example, rent paid to private individuals, insurance).