From April 1, 2025, a new law on financial transaction tax will come into effect, aiming to improve the state of public finances. This law will impose new obligations on sole proprietors, affecting their daily financial operations. In the following article, we will provide practical tips and information on how to prepare for these changes and what to keep an eye on in practice.
What are the rates, and how will they affect your finances?
Cashless payments: The tax is 0.4% of the amount of each debit transaction, with a maximum of 40 euros per payment. This means that for transactions exceeding 10,000 euros, the tax amount is capped at 40 euros. The tax will be deducted at the time the transaction is sent.
Cash withdrawals: A tax of 0.8% of the withdrawal amount applies to cash withdrawals (with no maximum tax amount per transaction).
Use of payment cards: Each payment card will be subject to a flat tax of 2 euros per year.
What does this mean for sole proprietors?
Sole proprietors who have so far used personal accounts for business purposes will be required to open a business account by March 31, 2025. Failure to comply with this obligation may result in fines of up to 3,000 euros under the Tax Code, as well as the obligation to pay the financial transaction tax retroactively.
Practical tips for entrepreneurs:
- Transactions between your own accounts:
If you transfer money between your business and personal accounts within the same bank, these transactions will not be subject to tax. - Expenses and flat-rate deductions:
If you apply flat-rate deductions, it may be more advantageous to cover expenses from your personal account to avoid taxation on your business account. - Social and health contributions and tax payments:
Payments for social and health contributions are not subject to the financial transaction tax. This means that when paying these contributions from your business account, no financial transaction tax will be due. The same applies to tax payments themselves (e.g., income tax) – these transactions are exempt from this new tax.
Use of foreign business accounts
If you use a foreign business account (e.g., Revolut), you must calculate the tax for each transaction yourself and report these details in your tax return.
Conclusion
The financial transaction tax from 2025 will bring changes for entrepreneurs that require thorough preparation. It is important to reassess your financial flows and adapt to the new regulations to avoid penalties. If you need advice, we recommend consulting a tax advisor to ensure that you comply with all legislative requirements correctly.
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