Two and a half billion: the “virtuous of the taxes” did not pay to the state the euro of the income.

Delfi previously wrote that there are dozens of ways to earn income and not pay taxes in Lithuania.

We find out how much income Lithuanians receive, from which they do not have to pay any taxes; the figures are impressive.

By 2020, more than 516 thousand. declared population nearly 1.77 billion. Eur tax-free income, reported the State Tax Inspection (STI).

Most of it came from diets – 163,975 thousand people earned almost 4,000 euros each – a total of 651 million euros.

The second heading is direct payments for agriculture, food and rural development. In this way, 67 thousand people received an average of 5,659 euros each, a total of 379.6 million euros. Farmers also have the fourth largest line of nontaxable income: 44.5 thousand. received an average of 2,735 euros in compensation payments, a total of 132.6 million euros. euros.

The third largest type of tax-free income is gifts from family members. This includes gifts received from spouses, parents, adoptive parents, children, adopted children, brothers, sisters, grandparents. 18,056 people received gifts on average 18,678 euros last year, a total of 337 million. euros. The STI sees the problem that sometimes fictitious donation agreements attempt to legalize the income received.

Fifth, compensation for increased costs for workers whose work is mobile in nature or involves commuting or commuting. Yes 75 thousand. people earned an average of 1,496 euros each, a total of 112.6 million. euros.

The wages of some workers are not taxed at all, that is, the income from the work of seafarers during the voyage. This is the sixth largest line: 4,035 people earned an average of € 13,958 each, for a total of € 56.3 million. euros.

The wide range of benefits employers provide to employees continues in range. 29 thousand employees received 921 euros each for life insurance or pension contributions (26.7 million euros).

85,000 employees received approximately € 311 in benefits for supplementary contributions to sickness insurance in favor of employees (€ 26.4 million).

Employee awards are also tax-free. This is probably the most abundant type of tax-free income: 237.6 thousand employees, the average value of the award is 83 euros, the amount is 19.7 million. euros.

The TOP 10 of tax-free income ends with lottery prizes from organizers who pay taxes on turnover: 553 residents won an average of 13.4 thousand. 7.4 million euros in total. euros.

This top ten includes only income that is not taxed at all, although there are many forms of preferential taxes in the country. For example, the prices of business licenses in some municipalities start at 1 euro, which would be the full PIT that a resident has to pay for the income thus obtained.

2020 Activities with commercial licenses were carried out for a total of 97 thousand. population. Its declared income is 678 million. euros.

Income virtuoso 6381 received 8 or more different types of income

As a maximum for 2020 During the tax period, 17 inhabitants declared 17 types of income, reported the STI. There was also another resident who reported 16 different types of income. Three residents reported having received 15 different types of income, 11 residents, 14 types of income.

Overall, however, there were 6,381 of those populations reporting 8 or more types of income.

If the GPM had to pay, it is possible to recoup the benefits – hundreds of thousands used

If you already have to pay Personal Income Tax (PIT) in Lithuania, there are a number of benefits that allow you to get back part of the PIT.

Last year, 276 thousand people declared 42 million. The average amount of GPM that will be reimbursed for insurance premiums is 152 EUR on average. This would correspond to € 761 in tax-free wages.

44 thousand residents recovered 11 million euros from GPM for tuition fees, an average of 250 euros each. This would correspond to a tax-free salary of € 1,250.

49 thousand. declared population 3.7 million. The average amount to be repaid on a mortgage loan is 76 euros each.

3.6 million for contributions to pension funds. GPM recovered 29 thousand euros. population (average € 124 each).

19 thousand residents benefited from GPM’s auto repair benefit – they recovered 1.4 million. EUR (74 EUR each).

For a study credit 12 thousand. population declared reimbursable 732 thousand. EUR GPM amount – EUR 61 each.

For home repairs – 7.6 thousand. population declared reimbursable 2.2 million. 289 EUR each. This would correspond to € 1,447 of tax-free salary.

Residents used the benefit modestly for childcare services: 378 residents reported a refundable amount of 81,000. GPM amount (214 EUR each).

Stasė Aliukonytė – Šnirienė, Director of the Tax Liability Department at STI, points out that a resident could benefit from several GPM benefits at the same time.

“The population declaring income for 2020. The tax period, used three GPM benefits were – 3902, four – 254, five – 13”, – says S. Aliukonytė – Šnirienė.

High-income beneficiaries typically use three or more benefits; the average is 50 to 60 thousand. euros per year, according to CTI data.

But the benefits have limits.

‘The total amount of expenses that may be deductible cannot exceed 25%. annual taxable income of a resident ”, – explains S. Aliukonytė – Šnirienė.

It is also restricted that no more than € 300 GPM can be recovered for contributions to pension funds or life insurance, and € 400 GPM for car or building repairs and childcare services.

Trying to abuse tax-free income too

Despite the pandemic, the STI carried out more than 2,200 control actions against the population last year alone and identified 10.7 million. additional taxes to pay. For comparison, in 2019 2,800 control actions were carried out, 26 million were detected. additional taxes.

During control actions, the STI identifies cases of abuse, which are also related to non-taxable income.

“For example, when calculating the drivers’ allowances, the established allowance rates are exceeded, the amounts exceed the amounts not included in the salary and the calculation and non-payment of personal income tax, state social security, complementary medical insurance and contributions to guarantee funds ”, quotes the STI representative.

Irregularities were also identified in relation to donation transactions between related parties for tax purposes: taxpayers in an intermediate real estate donation transaction concluded between related parties sought to avoid the payment of GPM and VAT in the course of economic activities.

The most common offenses: living better than income, fictitious gifts

The STI shares the fact that most infringements related to personal income taxes are various.

First, the assets and expenses incurred do not correspond to statutory income.

Another violation, often fictitious gift agreements or loans used to justify the acquisition of a property, seeks to legitimize undeclared income from unidentified sources unknown to tax authorities.

Residents also indicate unreasonable property prices for sale or purchase in purchase and sale agreements entered into in order to obtain tax benefits.

‘Formal loan operations are concluded for the purpose of obtaining other income from related companies in the form of loans, which would formally be treated as non-taxable income. Tax avoidance schemes are established between related legal and natural persons in order to avoid the PIT payable on the financial instruments sold ”, says S. Aliukonytė – Šnirienė.

When conducting population control, the STI often finds that residents carry out activities without recording their activities. Last year alone, 445 of those people were identified, in 2019 – 445.

Last year a total of 1,094 complaints of administrative infractions were made during population control.

“Violations of commercial or economic activities, reports, statements or other documents required for the performance of the functions of a tax administrator, non-issuance or improper issuance of a cash register receipt for goods or services provided, violations of accounting legislation were con more frequently identified during control activities. “delivered by a representative of the STI.

Majauskas: the biggest problem is elsewhere

Mykolas Majauskas, president of the Budget and Finance Commission of the Seimas, explains that a large part of the conditions for obtaining tax-free income and benefits are justified, so their review should be cautious.

“When changing tax laws, it is very important not to impose an additional tax burden on the middle class. And if opportunities are created for a certain tax-free income for the middle class, before making any decision to increase taxes, it is necessary look very carefully if we will not burden the middle class that is already in distress, ”says M. Majauskas.

In this case, it also pointed out that income that is not subject to social security contributions, such as daily allowances, also entails the loss of social guarantees.

“This is a very sensitive issue, or the other part of society has to pay the social guarantees of the beneficiaries of said income, or these people find themselves in social exclusion,” said M. Majauskas.

In his opinion, non-taxable income is not the main reason for the so-called “livestock farm” (taxation of different activities).

“One of the exceptions is when you can receive tax-free income, for example, in the case of gifts or other very specific income. Another part of the problem is that income is taxed very regressively. For example, a doctor, police officer, or teacher pays significantly higher fees than a bailiff, lawyer, or notary. Here is a fundamental issue of justice that must be resolved ”, says M. Majauskas.

He sees loopholes in control, with some business owners buying high-value luxury assets on behalf of companies for personal use while lowering taxes. The president of the BFK would think that the STI should concentrate its control resources in the areas where the shadow is greatest, namely the control of VAT payments.

“The main problem is the VAT gap, which is due to insufficient control of principles by the tax inspection. When we say that we have a budget deficit, that there is a shortage of money for the salaries of teachers or doctors, the institutions Internationals laugh openly and say: look, their tax collection standard is the same as in Romania and Bulgaria. Without wanting to offend other EU member states, I think we can align ourselves with truly Western countries and make sure that companies and people pay taxes correctly, ”said M. Majauskas.