Surprised by the conditions created for notaries: seeing the highest income raises many questions about taxes

250 notaries – 40.7 million euros of income, or an average of 163 thousand. M. Majauskas shared the data from the State Tax Inspection for 2019. However, the IRPF notaries paid an average of 15.6 thousand. euros.

“Most of the notaries declared expenses with an average of 40 percent. Income from individual activities. This reduces the taxable income, which is subject to a maximum of 15%. Duty. Therefore, the effective rate of income tax that notaries paid was 9% on average ”, calculates M. Majauskas.

The notary with the highest income declared 1.2 million euros of income before deductions and paid around 10% of them. personal income tax, sample 2019. data.

“The ten notaries who declared the highest income earned an average of 651 thousand. and he also paid only 10%. of income received or 15 percent. – after allowed deductions. For comparison, the employment tax rate is 20% and for an amount greater than 87 thousand. EUR – 32 percent “, – compares M. Majauskas.

He points out that the 4 most earned notaries use the so-called 30 percent. allowable deductions and do not report any actual costs. This is a simplified procedure where you do not need to report incurred costs or other deductions; it is possible not to complete the cost journal. The remaining 6 notaries in the TOP 10 in terms of income received calculated the costs themselves, but they also ranged from 29 to 33 percent.

“This exemption was in line with the idea of ​​small freelancers in order to ease their bureaucratic burden and simplify cost accounting. Today, it is used boldly by notaries with large incomes, when actual expenses are likely to those incurred are significantly less ”, the parliamentarian is surprised.

50 notaries with the lowest income in 2019. declared an average of 49 thousand. income before allowed deductions.

“In my opinion, the tax regime for low and middle income people should not change. However, a lawyer, notary or bailiff declaring one million euros of an individual activity would have to pay significantly higher income taxes. The current situation is a costly error in the tax system and a painful injustice. There are no rational arguments to explain why a teacher or doctor with a hundred times lower income should pay taxes several times higher “, says M. Majauskas.

He previously reported that the tax adjustments will be discussed with the Government, the proposals must be presented by the Tax Working Group of the Ministry of Finance.

“Business associations often try to convince them that the effective tax rate is low just because of high operating costs. Still, ITS statements show the opposite situation: up to 83 percent. Lawyers enjoy 30 percent. deductions allowed and do not report any actual costs. However, even assuming there are significant costs, the income after the alleged costs still runs into the hundreds of thousands and sometimes millions. So is it really true that a person who receives one million euros after individual activity expenses can you pay twice the income tax of a person working under an employment contract? ”M. Majauskas was surprised.

Lithuanian Chamber of Notaries says notaries pay two-thirds of income

Marius Stračkaitis, Chairman of the Lithuanian Chamber of Notaries and a notary of Klaipėda, is convinced that the fees paid by notaries are not exclusive to other residents who carry out individual activities and, when calculating the income of notaries, a fifth part. VAT previously paid.

“The questions posed by a member of the Seimas Budget and Finance Committee provide us with the opportunity to explain once again in an open and transparent way the income of the notary and its structure. A private person authorized by the state, a notary who works in accordance with the procedure strictly regulated by legal acts and receives a remuneration approved by the Ministers of Justice and Finance for notarial acts, does not pay less fees than any other citizen of individual activity, ”Says M. Stračkaitis.

It points out that until June 2020, the notarial fees included the value added tax.

“Therefore, it is necessary to immediately deduct one fifth of the income of the notary analyzed by the parliamentarian”, says M. Stračkaitis.

It ensures that by law a notary cannot work alone, that is why he hires staff, sometimes in dozens of metropolitan offices.

“Most are qualified lawyers, whose salaries are competitive in the big cities. A notary is a responsible employer who pays the salaries of his employees and, of course, all the corresponding fees. The remaining income includes the office maintenance expenses, the mandatory and additional voluntary professional liability insurance premiums, the mandatory fee for a member of the Chamber of Notaries, the expenses of maintaining the notary’s file indefinitely ”, he says M. Stračkaitis.

However, in addition, a notary assumes a greater risk in his activities than a person who works under an employment contract – a notary is responsible for his actions and those of his office staff with all their assets, says the President of the Chamber of Notaries.

“A notary must have the means to maintain a law firm, qualified personnel and pay them if they cannot work due to illness or other reasons and do not receive income. And only after deducting all the mentioned expenses, can one speak of the personal salary of the notary, from which personal income taxes, social security and compulsory medical insurance are deducted ”, assures M. Stračkaitis.

It ensures that the fees paid by a notary should not be calculated on the basis of total income, but on the part of income that is specifically attributed to him: how much he earns as a private person and not how much income he receives as a person authorized by the state and an employer.

“According to data from the Chamber of Notaries, the notary’s expenses and the fees paid amount to two-thirds of the notary’s income on average, and sometimes more,” says M. Stračkaitis.