Finance

The Individual Tax Calculations for You

The incomes of the natural persons farmers are taxed by the order of the Law for the taxes on the incomes of the natural persons.

With tax on the total annual tax base, if:

  • Are traders within the meaning of the Commercial Law;
  • Have not chosen to be taxed in accordance with the procedure provided for in the Personal Income Tax Act for sole traders.

In these cases, in determining the taxable income, they are entitled to:

60% of legally recognized expenses for the activity for income

They must have been obtained from the production of unprocessed agricultural products, with the exception of income from the production of ornamental plants

40% of legally recognized expenses for the activity for income

They must have been obtained from the production of processed agricultural products and from the production of ornamental plants.

Natural persons who are registered as farmers have the right to choose the procedure for taxation of income from their activities as follows:

If during the current year they have been taxed according to the general procedure, they have the right to choose from the following year to be taxed according to the procedure provided for sole traders. The right to choose in this case is exercised by submitting a declaration under the Personal Income Tax Act by 31 December of the current year the order thus chosen shall be applied for a period of not less than 5 consecutive tax years. The use of the taxfyle’s tax calculator  is important there.

If during the current year they have been taxed on the annual tax base and the 5-year period for which this order of taxation must be applied has already expired, they may:

  • To continue to be taxed in the same order, as for this purpose it is not necessary to submit a new declaration under the Personal Income Tax Act.
  • To choose to be taxed according to the general procedure of the Personal Income Tax Act. In this case, the right to choose is exercised by submitting a declaration under the Personal Income Tax Act by December 31 of the year.
  • The natural persons registered as farmers may not use the right to assign the tax on the annual tax base by the order of the Personal Income Tax Act.

Newly registered farmers may choose for the year of their registration to be taxed on the annual tax base under the Personal Income Tax Act. The choice shall be declared in the annual tax return under Personal Income Tax Act for the same year.

Conclusion

In case they wish to continue with this order of taxation during the next five tax years, it is necessary to submit a declaration under the Personal Income Tax Act by December 31 of the year.

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