Majauskas wants to reduce income and increase taxes for notaries: the new order would affect all individual activities

2020 Notaries reached a new income record: the income of 244 notaries was 42.2 million euros, according to data from the State Tax Inspection (STI). On average, a notary declared 173 thousand last year. 16.7 thousand euros. personal income tax (PIT).

At that time, the best-earned income of notaries ranged from half a million euros to almost 1.2 million euros. euros. At that time, the income tax of the natural persons who paid averaged about 75 thousand. or about 10%.

The president of the Budget and Finance Commission of Seimas M. Majauskas values ​​that the state is responsible for ensuring that notaries have “monopoly operating conditions and a profit for life.” First, I would suggest a fundamental review of the income of notaries.

“It is time to fundamentally review the regulation of notaries: evaluate whether it is correct to limit their number, control service rates and abolish preferential tax conditions,” says the president of the commission.

The state consecrates a limited number of notaries in legal acts and assigns areas of activity.

“Then we set service fees so that everyone, up to one, can work profitably. And those with offices in the biggest cities are expected to earn one million euros each. And in order not to appear small, they also apply income rates. preferential to the income received by notaries, so that the fees they pay are lower than those of a doctor or a teacher ”, M. Majauskas is surprised.

He is convinced that notary fees do not have an objective basis, as the State Audit stated a year ago: “There is really no rational argument that explains why even the simplest real estate transactions have to pay the notary 400 or 500 euros. “

Offer to give up 30 percent. income rules for high-income beneficiaries

His other proposal is to stop applying the 30%. Income rules for high-income self-employed beneficiaries. In that case, they would have to report actual operating expenses to reduce taxable profits.

“Laws must be adjusted so that only low-income notaries, not millions of salaried employees, cannot declare actual expenses. (…) In my opinion, the tax treatment of low- and middle-income people should not change. However, a notary who declares one million euros of individual activity should pay significantly higher income taxes ”, suggests M. Majauskas.

Most of the notaries declared expenses amounting to 40 percent. individual operating income, thus reducing taxable income, from which a maximum of 15% is deducted. tariff.

“Almost all (8 out of 10) notaries with higher income use the 30% deductions allowed and do not report any real costs. This exemption was in line with the idea of ​​small self-employed workers in order to ease their bureaucratic burden and simplify the Cost accounting. In reality, however, not only the smallest ones are used, but also the largest ones, whose real costs are significantly lower. The procedure for such imposition is incorrect, “says M. Majauskas.

According to him, this proposal could be decided by the fiscal working group.

He noted that not all notaries are equally successful. For example, the 50 notaries with the lowest income in 2020 declared an average of 47 thousand. before allowed deductions.

“Sometimes notaries try to convince that the effective tax rate is low just because of high operating costs. However, CTI statements show the opposite situation, almost 40%. Notaries use 30 percent. Deductions. allowed and do not report any actual costs. However, even assuming there are significant expenses, the income after the alleged expenses still reaches hundreds of thousands each year, “says M. Majauskas.

Currently, 20% applies to employees. GPM rate, and if the amount exceeds 87 thousand. EUR – 32 percent. According to the parliamentarian, there are no rational arguments to explain why a teacher or doctor with a hundred times lower income should pay taxes several times higher.

“The effective rate of income tax paid by notaries was, on average, only 9%. For example, the notary with the highest income in 2020. declared 1.2 million. Income and paid 11%. Personal taxes The ten notaries who declared the highest income obtained an average of 720 thousand and paid only 10% of the income received or 15 percent after the allowable deductions ”, calculates M. Majauskas.