M.Majauskas proposed to tax those who earn the most: the income of lawyers, notaries and bailiffs | Deal

The Spokesperson for the Seimas BFK asked the State Tax Inspectorate (STI) to provide him with information on the income earned and the taxes paid by the three professions working in individual activities.

After analyzing these data, M. Majauskas believes that lawyers, notaries and bailiffs with high incomes should pay higher taxes, since some of them currently pay a significantly lower personal income tax (IRP) than employees with Work contract.

The employment tax rate is 20% and the amount exceeds 87 thousand. EUR – 32 percent. Meanwhile, according to M. Majauskas, a part of the representatives of the aforementioned professions paid only 6 percent. or 9 percent. GPM rate.

“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.

A lawyer, notary or bailiff declaring a million euros from 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 is no rational argument to explain why a teacher or doctor with a hundred times lower income should pay several times more. ” 15 minutes M.Majauskas commented.

Notaries have allocated 10 to 15 percent for taxes. of the income received?

According to STI data, in 2019 the total income from individual activities of 250 notaries amounted to 40.7 million LTL. euros. On average, a notary declared 163 thousand per year. 15.6 thousand euros. income tax in euros.

Most of the notaries declared costs on average 40 percent. income from individual activities.

The notary with the highest income in 2019. declared 1.2 million. Rent and pay 10%. personal taxes.

‘This reduces taxable income, which is subject to a maximum of 15%. tariff. Thus, the effective income tax rate paid by notaries averaged around 9 percent. For example, the notary with the highest income in 2019. declared 1.2 million. Rent and pay 10%. personal income tax ”, stated M. Majauskas.

According to him, the ten notaries who declared the highest income obtained an average of 651 thousand. and he also paid only 10%. of income received or 15 percent. after allowed deductions.

“It is interesting to note that notaries with higher incomes use the 30 percent allowable deductions and do not declare any real costs. This exemption was in line with the idea of ​​small self-employed workers to ease their bureaucratic burden and simplify cost accounting. Today, notaries with high incomes use it boldly, when the actual costs they incur are likely to be significantly lower, ”said M. Majauskas.

It is true that he points out that not all notaries are equally successful. For example, the 50 notaries with the lowest income in 2019 declared an average of 49 thousand. before allowed deductions.

Chamber of Notaries: a notary pays no less than anyone else

Meanwhile, Marius Stračkaitis, president of the Lithuanian Chamber of Notaries, Klaipėda Notary, does not agree with the ideas of M. Majauskas. It ensures that the notary does not pay less fees than any other autonomous citizen of the state.

“We would like to draw your attention to the fact that until June 2020, the value added tax was included in the fees for notarial services. Therefore, one fifth of the income of the notary analyzed by the parliamentarian must be deducted immediately The law does not allow a notary to work alone and therefore hires staff, sometimes in dozens of metropolitan offices. Most are qualified lawyers, whose salaries are competitive in large cities, “emphasized M. Stračkaitis.

According to him, the notary pays the salaries of his staff and all corresponding fees. Remaining income includes office maintenance expenses, mandatory and additional voluntary professional liability insurance premiums, mandatory fee for a member of the Chamber of Notaries, expenses for maintaining the notary’s file indefinitely.

“A notary assumes a greater risk in his activities than a person who works with an employment contract; a notary is responsible for the actions of him and his office staff with all their assets. Furthermore, the notary must have the means to maintain a statutory office, qualified personnel, and pay them wages if they cannot work due to illness or other reasons and receive no income.

And only after deducting all the aforementioned expenses, it is possible to speak of the personal salary of a notary, from which taxes on personal income, social security and compulsory medical insurance are deducted ”, commented the president of the Chamber of Notaries from Lithuania.

“Consequently, the fees paid by a notary as a private person and not by a person authorized by the state and the employer must be calculated not from the total income, but from the specific part of the income. According to the data of the Chamber of Notaries , the costs and fees paid by a notary average two-thirds of the notary’s income, and sometimes more, ”added M. Stračkaitis.

The highest income from lawyers was 4.2 million. income

According to M. Majauskas, lawyers and bailiffs also pay very little taxes.

According to STI data, in 2019, the lawyer with the highest income declared 4.2 million. of income from individual activity and paid 5.1 percent. income taxes.

According to M. Majauskas, the income from individual activity of the ten lawyers with the highest income was 2 million on average. per year, of which personal income taxes paid were less than 6%.

The individual operating income of the ten highest earning attorneys averaged $ 2 million. per year, of which personal income taxes paid were less than 6%.

According to STI data, approximately 1,900 lawyers carry out individual activities in Lithuania. declared 122 million. income in euros. On average, a lawyer declared 68 thousand. Individual income in euros and paid 7%. income tax.

And the 100 top-earning lawyers in Lithuania earned on average 700,000. per year and paid 7.7 percent. Meanwhile, the annual income of the rest was significantly lower and averaged 31 thousand. euros.

“It could be a textbook example of the wrong tax system. We will consult with the Government on concrete decisions and we will try to correct this injustice as soon as possible. Although the number of lawyers is not large, the applied preferential tax rate deprives the state of significant income per year.

After adjusting rates or permitted forms of activity, up to 5 million. euros of additional revenue from the state budget per year “, – thinks M. Majauskas.

The bailiffs made $ 27 million. euros

According to STI data, the total number of bailiffs in 2019. Individual operating income was LTL 27.2 million. euros. Currently, around 115 bailiffs are involved in individual legal activities, and their number and areas of activity are determined by the Minister of Justice.

On average, a bailiff declared 234 thousand. Income and paid 17 thousand. income tax in euros.

“The vast majority of bailiffs have declared that they have incurred significant costs, thus reducing their tax base, which is subject to a maximum of 15%. tariff. Therefore, the calculation of the average effective income rate paid by the bailiffs from the income received was only 7%, ”said M. Majauskas.

According to him, the bailiff with the highest income in 2019 declared 725 thousand. income and paid 4.8 percent. personal taxes.

Meanwhile, the ten bailiffs who declared the highest income received an average of 543 thousand from their main activity. and paid only 6.2 percent. of income received or 15 percent. after allowed deductions.

Of the 116 bailiffs who reported their income to the STI, the annual earnings of up to 108 bailiffs exceeded 100,000. euros.

“Bailiffs, like lawyers, are subject to a privileged tax regime. In my opinion, this procedure should be kept only for middle-income people ”, said M. Majauskas.

The Chamber of Bailiffs also does not agree with the arguments of M. Majauskas, claiming that although a bailiff is a person who performs individual activities in tax terms, the income is not obtained by a single bailiff, but by the entire bailiff’s office. And the office employs an average of seven more people with a sheriff.

“Taxes paid by the sheriff to the state – VAT, GPM and Sodra taxes for self and employees – in 2019. averaged 34 percent. revenue collected. Meanwhile, according to experts, companies pay the budget on average only 27.5 percent. taxes (benefits and dividends) ”, stressed the Chamber of Marshals.

In addition, they highlighted that the activities of the bailiffs are financially extremely risky. You earn income only when you actually get back the amounts owed. And recovery takes an average of up to two years.

“Recovery is often difficult or even impossible due to evasion and insolvency of the debtor. In case of default, the bailiff does not earn a penny and has to cover the costs of managing the debt from his salary. Therefore, the income of individual months can fluctuate sharply and some months may not be profitable, “emphasized the Chamber of Marshals.

Lithuania is called a tax haven

M. Majauskas believes that those who earn the most have to pay the highest taxes.

“This is the case in all developed countries, such a procedure should also be applied in Lithuania. At the moment, Lithuania remains an absolute tax haven for high-income lawyers. It seems that the bailiffs also enjoy fiscal privileges and live like kidneys in fat, ”said the president of the Seimas BFK.

According to him, although business associations generally try to convince that the effective tax rate is low only because of high operating costs, CTI’s statements show the opposite situation, even 83 percent. lawyers enjoy 30 percent. allowable deductions and do not report any actual costs.

“But even assuming there are significant costs, the income after the alleged costs is still in the hundreds of thousands and sometimes millions. So is it really true that a person who receives a million euros after the expenses of activities Can individuals pay twice the income tax than a person who works under an employment contract? ”, commented M. Majauskas.