What to write on the payment purpose to avoid disagreement with the State Revenue Service?
What to write on the payment purpose to avoid disagreement with the State Revenue Service? Such a question seems to have once arisen for almost everyone.
When completing an annual income declaration, there is often uncertainty about whether the bank transfers made by friends, relatives or acquaintances should also be stated. Let’s see when such payments do not need to be shown and in what situations they are considered to be income from which personal income tax (PIT) is paying. The description is provided by Reinis Jansons, Head of the Financial Institute of Swedbank and tax specialists from the State Revenue Service.
Situation: Payment of Friends Trip Ticket from my account
If money is credited to the account for a common ticket, such a payment shall not be considered an income unless the fee or profit from the transaction is not paid. According to Reinis jansons, in order to avoid misunderstandings in such situations, it is indeed advisable to make all payments electronically and save checks, which confirms that the money has been spent on the intended purpose. In addition, if each person transfers less than € 1425 a year to another natural person, it is not necessary to provide additional explanations, unless it is a reward for a job or service.
Situation: Class Fund Money Management
If the money is credited to a specific purpose, such as drinking water or stationery in the classroom, and the account owner does not use it for his own purposes, this amount is not considered income and does not have to be declared.However, it should be borne in mind that there is no universal formula that would prevent taxes if the law provides for it. The answer to the purpose of the payment is as follows: the transfer must always be clearly stated for what purpose and for what reason it has been done. This allows the State Revenue Service to assess whether the particular payment is considered to be income, which must be declared or taxed.
Citizens are obliged to submit an annual income statement every year, which must indicate part of the income received, but there are also types of income that do not have to be included in the declaration. Let’s look in more detail at these categories.
Income required to declare and pay tax:
Gifts from persons who are not spouses or relatives up to the third degree if the total amount of the year exceeds EUR 1425. Income from the sales of capital assets (eg real estate, shares, cryptocurrencies).
Interest payments for loans issued. Winnings with a total year of more than 3000 euros. Income from renting or leasing property. income generated by providing paid services (eg consultations, beauty, repairs).Income from Internet or social networking monetization. Profit from the sale of agricultural or forest products if it exceeds 3000 euros per year.Foreign income, including from low-tax countries.