| Pages in topic: [1 2 3] > | My national law is working against me Thread poster: S_G_C
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S_G_C
Romania
Local time: 03:45
English to Romanian
I will be mainly addressing this issue to those translators residing and working in the EU, since I reside and work in Romania, which is part of the EU.
Also, please read this carefully. As a non-paying Proz.com member, my posts and replies are under moderation and might not get approved in due time for my replies to make sense to you.
Cutting all irrelevant or burdensome details out, here it goes.
I ... See more I will be mainly addressing this issue to those translators residing and working in the EU, since I reside and work in Romania, which is part of the EU.
Also, please read this carefully. As a non-paying Proz.com member, my posts and replies are under moderation and might not get approved in due time for my replies to make sense to you.
Cutting all irrelevant or burdensome details out, here it goes.
I have been working as a sole trader from February, 2003 to September, 2016. As a sworn translator, I was registered with the National Tax Authorities here, which issued two tax IDs (codes) for me: a national one and an international one. I regularly paid all of my dues (income tax, medical insurance, social security contribution), making sure I had no outstanding debts.
In September, 2016, as I was relocating and had also developed health issues, I closed my business down. This meant going to the Tax Authorities in person, filling out several forms, and having my tax codes cancelled. Most importantly, it involved that the Tax Authorities run a check-up in their system and give me a "clean bill of financial health" - meaning approving my closure as I had 0 debts.
However - and this is the nasty part - the Romanian law allows Tax Authorities to run further check-ups EVEN AFTER A CLOSURE. The time period they are allowed to do this for is set at 5 years - so, for example, it's 2021 now, which means they are allowed to check a sole trader's financial records starting with 2016 and moving upwards. So, despite the trader having 0 debts at the moment of the closure, they might still be indebted 1 or 2 or 5 years later.
This is what happened to me as well. My bank accounts are now locked by the Tax Authorities and, despite me challenging the situation before the County Court of Law, they decided the Tax Authorities are right. They had run a check-up on me in 2018 for 2013, in 2019 for 2014, and in 2020 for 2015. And had recalculated the amounts I had paid so far for my medical insurance and established I owe them more money.
My question is:
Is there any other EU member State enforcing such discouraging laws, causing a lot of distress for sole traders, forcing them to be on their guard all the time? I cannot use my bank accounts anymore and every amount I might receive, regardless of its nature, will be locked and used as coverage for the debt I supposedly owe the Tax Authorities (the Romanian State, ultimately). 'coz I feel this is totally crazy (they've done this to others as well).
Thank you in advance for your input. ▲ Collapse
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Sounds rough for you, as an unexpected surprise, but if they think you didn’t pay enough tax of course they will still be able to claim it.
In the UK, both within and outside the EU, if you’re a sole trader, the business is not a separate entity, it’s just you, and your tax affairs are one and the same.
I wouldn’t be surprised if the taxman could come after a limited company’s officers/shareholders after a liquidation too.
Your best bet is probabl... See more Sounds rough for you, as an unexpected surprise, but if they think you didn’t pay enough tax of course they will still be able to claim it.
In the UK, both within and outside the EU, if you’re a sole trader, the business is not a separate entity, it’s just you, and your tax affairs are one and the same.
I wouldn’t be surprised if the taxman could come after a limited company’s officers/shareholders after a liquidation too.
Your best bet is probably to consult a specialist tax accountant on whether you actually need to pay the tax arrears in question. ▲ Collapse
| | | | | Statute of limitation | Nov 16, 2021 |
I think most countries have a statute of limitation for how far back the tax authorities can recheck your taxes. If they find anything wrong according to the law in force at the time, they can legally claim the money.
Obviously, none of us here can know if the claim is legitimate, and the court of first instance may or may not be right.
If you used an accountant, he or she may be liable for damages for getting it so wrong.
In any case, this underscores the ... See more I think most countries have a statute of limitation for how far back the tax authorities can recheck your taxes. If they find anything wrong according to the law in force at the time, they can legally claim the money.
Obviously, none of us here can know if the claim is legitimate, and the court of first instance may or may not be right.
If you used an accountant, he or she may be liable for damages for getting it so wrong.
In any case, this underscores the importance of getting taxes right, with or without an accountant.
I don't see how EU law could be involved, as fiscal matters are solely the competence of Member States, except where EU law coordinates them, such as with VAT.
When living in Germany, I had a German accountant that messed up my tax return so badly that the tax authorities blocked my German account without warning. Fortunately, I had accounts in other countries, so I just moved my transactions. Having more than one account in more than one country is a good protection. I naturally deducted the fees for this mess from his invoice and sacked him. Contrary to the stereotype, not everything is in Ordnung in Germany. He was a [word I can’t use here] and obviously we find that sort of people everywhere.
But it’s a sad story to read and I think the only thing you can do is to check that their claim is correct according to the law and negotiate as lenient terms as possible. All the best. ▲ Collapse
| | | | S_G_C
Romania
Local time: 03:45
English to Romanian
TOPIC STARTER
Thomas T. Frost wrote:
In any case, this underscores the importance of getting taxes right, with or without an accountant.
Here it's the Tax Authorities that calculate taxes for sole traders. You state your gains by filling in a form (a statement of revenues) and they calculate how much you have to pay. Sole traders are not held to have an accountant, only to submit the necessary forms in due time. And, of course, to keep their invoices and purchase documents legit and in order.
[Edited at 2021-11-16 12:42 GMT]
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S_G_C
Romania
Local time: 03:45
English to Romanian
TOPIC STARTER | No negotiations | Nov 16, 2021 |
Thomas T. Frost wrote:
But it’s a sad story to read and I think the only thing you can do is to check that their claim is correct according to the law and negotiate as lenient terms as possible. All the best.
I think it's too late for negotiations now. You see, when I closed my business down and relocated, it never crossed my mind that this could happen. So despite the Tax Authorities proving that they had informed me of this, the relevant notices did not reach me, as they used my old address, which is not valid anymore (honestly, I couldn't find any reason why I would inform them of my relocation, since I had just severed all of my ties with them). Those notices - which they sent by post, despite having stored my email address in their database (this is a major flaw of Romanian institutions, they favor the post over emails) - are dated 2018, 2019, and 2020. The Court of Law gave me access to them. It took me some effort to convince them I can't be reached by post, as that address doesn't exist anymore.
| | | | matt robinson 
Spain
Local time: 02:45
Member (2010)
Spanish to English
I believe all EU countries have a statute of limitation, and I would also assume that of most countries throughout the world. Tax systems within the EU are broadly a matter for individual states. Here in Spain, for example, there is a 4-year limit. The tax authorities can and, when you are inspected, usually do go back over the previous four years of business activities, whether you are trading or not.
In some countries this statutory period is often extended for cases involving fraud.... See more I believe all EU countries have a statute of limitation, and I would also assume that of most countries throughout the world. Tax systems within the EU are broadly a matter for individual states. Here in Spain, for example, there is a 4-year limit. The tax authorities can and, when you are inspected, usually do go back over the previous four years of business activities, whether you are trading or not.
In some countries this statutory period is often extended for cases involving fraud.
I can't speak for the tax authorities in Romania, but in Spain I have always found them to be transparent, although when they detect an error in their favour you are required to pay the tax due and also a fine. ▲ Collapse
| | | | S_G_C
Romania
Local time: 03:45
English to Romanian
TOPIC STARTER
matt robinson wrote:
I can't speak for the tax authorities in Romania, but in Spain I have always found them to be transparent, although when they detect an error in their favour you are required to pay the tax due and also a fine.
Like my daughter said: "over here, you can die waiting for justice to be served."
I understand fines when it's my fault.
But when it's the authorities' fault... who's fining them? Since they are the ones computing taxes over here? Like your calculations are correct in 2015, but proven wrong in 2020? Well then, how about overcharging and fining yourselves?
I will never understand this recalculation process. It's not like my records change for a year that has already passed and has been declared "financially closed".
| | | | Georgi Kovachev
Bulgaria
Local time: 03:45
Member (2010)
English to Bulgarian
+ ...
| A sole trader is the same as a natural person in legal terms | Nov 16, 2021 |
Sorry to hear you've had health problems. I hope that you are fine now.
To the point: "A sole proprietorship company doesn't have a separate entity. It's the same as the entity of the person." (https://www.wallstreetmojo.com/privately-held-company/) In my opinion, this is valid in most countries. Therefore, all your liabilities as a natural person could be related to y... See more Sorry to hear you've had health problems. I hope that you are fine now.
To the point: "A sole proprietorship company doesn't have a separate entity. It's the same as the entity of the person." (https://www.wallstreetmojo.com/privately-held-company/) In my opinion, this is valid in most countries. Therefore, all your liabilities as a natural person could be related to your sole proprietorship company, and vice versa.
It is the same in Bulgaria. ▲ Collapse
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| Sympathy for the devil in the details | Nov 16, 2021 |
I can only sympathise with being tangled up in bureaucracy and tax debt.
Especially if there is no way to accurately calculate what you owe every year (sounds outrageous) and always run the risk of such recalculations. Is there a fine involved (like you did something wrong) on top of the surplus contribution/taxation?
- Can you arrange a meeting with the tax authorities, for instance at least to negotiate a certain amount/percentage of income to be left at your disposal... See more I can only sympathise with being tangled up in bureaucracy and tax debt.
Especially if there is no way to accurately calculate what you owe every year (sounds outrageous) and always run the risk of such recalculations. Is there a fine involved (like you did something wrong) on top of the surplus contribution/taxation?
- Can you arrange a meeting with the tax authorities, for instance at least to negotiate a certain amount/percentage of income to be left at your disposal each month? If you are left with no means/income to survive, it will be hard for them to get back what you "owe" them.
- I know it is a little late, but when relocating from your home country while stopping your activity there, I think it is important to perform the appropriate steps to register yourself as a non-tax resident. This avoids much trouble, including double taxation and possibly failure to receive important notifications (isn't there an online system in place? I thought Romania was more digitally advanced). It includes providing a new address abroad and/or designating a tax representative (as in Greece, for instance).
- If everything else fails, feel free to contact me by PM. I may have an interim solution to suggest.
[Edited at 2021-11-16 13:42 GMT] ▲ Collapse
| | | | Joakim Braun
Sweden
Local time: 02:45
German to Swedish
+ ...
In Sweden, the tax authorities can reopen proceedings six years after your approved tax filing, if they claim you've filed inaccurate information. I don't think that's unreasonable per se - it depends how it works out in practise. As others have pointed out, the physical person and the company are one for tax purposes. If you want a clear distinction and immunity, you must run a LLC.
[Bearbeitet am 2021-11-16 15:49 GMT]
| | | | Adieu
Ukrainian to English
+ ...
| So how much do they want? | Nov 16, 2021 |
Might be easier to pay them to go away
If you feel uncomfortable conceding, just think of it as a legalized bribe instead.
[Edited at 2021-11-16 19:05 GMT]
| | | | S_G_C
Romania
Local time: 03:45
English to Romanian
TOPIC STARTER | Financial status | Nov 16, 2021 |
Jean Dimitriadis wrote:
Especially if there is no way to accurately calculate what you owe every year (sounds outrageous) and always run the risk of such recalculations. Is there a fine involved (like you did something wrong) on top of the surplus contribution/taxation?
- Can you arrange a meeting with the tax authorities, for instance at least to negotiate a certain amount/percentage of income to be left at your disposal each month? If you are left with no means/income to survive, it will be hard for them to get back what you "owe" them.
[Edited at 2021-11-16 13:42 GMT]
Yes, there is a fine - the late payment fine.
I cannot arrange any meeting. They do not solve such matters by phone or email. They didn't even answer my calls - for months, claiming that the line must have been busy when I called (though I used different numbers - listed on their website - at different hours on different days). I actually do not have any income at this point, as I am just trying to get back on my feet and searching for potential clients/collaborations. In the end, someone did answer my emails, but it didn't help much. They said I can quote some law I don't remember to have my debt scheduled for installments, but when I talked to my banks, they said "no, any amount you receive will be used to cover the debt, unless that amount/those amounts are higher than the debt, which means the remainder will be put at your disposal."
I didn't relocate from my home countRy, only from my home county. In Romania, when you have no income, you are not required to pay taxes or social security contributions. Or register as a non-tax resident. You do this only when specifically required (for instance, the parents of kids earning scholarships for medical reasons or as social security measures are required to state their financial status and provide documents to support it).
Of course there is an online system in place. They just don't like to use it. Bureaucracy in Romania is a nightmare.
Thank you.
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S_G_C
Romania
Local time: 03:45
English to Romanian
TOPIC STARTER
Adieu wrote:
Might be easier to pay them to go away
If you feel uncomfortable conceding, just think of it as a legalized bribe instead.
[Edited at 2021-11-16 19:05 GMT]
The amount they calculated is higher than a monthly minimum net wage here.
And I have no income at this point.
Stating the exact amount is useless, as we live in different countries and have different life standards, what I deem high or expensive might be low or cheap for someone else.
| | | | S_G_C
Romania
Local time: 03:45
English to Romanian
TOPIC STARTER
Joakim Braun wrote:
In Sweden, the tax authorities can reopen proceedings six years after your approved tax filing, if they claim you've filed inaccurate information.
[Bearbeitet am 2021-11-16 15:49 GMT]
In my opinion, to be able to claim that a trader has filed inaccurate information, the Tax Authorities need to prove it.
Here they didn't call me in and didn't request me to bring in my financial records/have them scanned and emailed, for comparison - like checking whether the statements I filed years ago truly match my records.
Or communicate with me in this regard by email, the world is going through a pandemic, why deny people online communication?
What they did - and are doing and will continue doing - is a reanalysis of their database. Like, OK, in 2015, we established that you owe us 10 dollars and you paid those 10 dollars on ... . 5 years later, we change our mind and charge you with another 100 or 500 or 1,000 dollars or whatever we want, because we've recalculated your dues.
So how am I guilty for the way they run their database? Is it the same in Sweden?
| | | | S_G_C
Romania
Local time: 03:45
English to Romanian
TOPIC STARTER | No separate statements | Nov 16, 2021 |
Georgi Kovachev wrote:
Sorry to hear you've had health problems. I hope that you are fine now.
Therefore, all your liabilities as a natural person could be related to your sole proprietorship company, and vice versa.
Thank you, I'm better, but not totally fine. It's manageable, though.
I don't understand this: /all your liabilities as a natural person could be related to your sole proprietorship company, and vice versa/. I mean, yes, I was both a natural person and a sole proprietorship company at the time, but this changes nothing, I didn't file separate statements years ago, it wouldn't even have been possible. The Tax Authorities here have never used my tax ID to calculate taxes, they've always used my personal number code (what the US call 'social security number'), so they had permanent access to anything I owed them. It's not like they are now charging me separately for my liabilities as a natural person or separately for my liabilities as a sole proprietorship company.
Once I have no income, I am not compelled to pay any taxes or social security contributions. Medical insurance is optional - if you can afford to pay for a minimum insurance, you do it, if you can't, you don't do it.
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