Proposed Changes to the Simplified System

The draft government budget for 2018 contains a proposal which will significantly alter the working of the simplified regime.

Under proposals included in the draft government budget for 2018 the self employed in the simplified regime will in some cases have to present business expenses to justify the deductions when previously no such justification was necessary.

At present the self employed who had yearly income of less than 200,000 Euros can opt to go onto the simplified regime. Under this regime depending on the activity the freelancer would have a right to a percentage deduction for business expenses without having to have any actual expenses and maintain the expense documentation. For the liberal professions a deduction of 25% of income was given while for short term holiday rentals a deduction of 65% was given.

The proposal is that while the percentage deductions will remain the deduction will be limited to 4,104 Euros. Any deduction beyond that amount will have to be justified by actual expenses.

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