Who Benefits from Filing Tax Returns Without a Withholding Agent?

Is It Worth Filing Tax Return Without Withholding Agent?

Starting from the 2024 tax season, the box “without withholding agent” can be checked by anyone submitting the 730 tax return, even if they have a withholding agent.
This is a new feature this year that allows anyone using the form to choose to receive any refund directly from the Revenue Agency instead of from the employer in their paycheck.

Beyond the individuals who are required to submit the form this way because they do not have a withholding agent, when is this choice convenient for most workers? Let’s explore by making some assessments.

One of the main advantages of filing the tax return with the 730/2024 form is to use the withholding agent to pay any debt or collect any credit.
Direct tax settlement via paycheck, in fact, allows both employed workers and pensioners to have no further obligations after submitting the return.

Moreover, any refund is processed very quickly: with the salary of the month following the submission for employees, and with the pension slip due in the second month after the submission for pensioners.

Opting to file the 730 tax return without a withholding agent, in fact, means losing both advantages that the 730 form entails because the taxpayer will have to pay any debt resulting from the return using a payment form called F24.

As for any credit, it will be paid directly by the Revenue Agency, but with longer timelines.
The amounts will not be received until the end of the year of submitting the return, and the payment could even be postponed to the following year.
The general rule is that the Revenue Agency will process the refund within the sixth month after the deadline for the return submission.

Despite the loss of the obvious advantages that come with using the 730 form, many taxpayers may find it convenient to file the tax return without a withholding agent.

One reason for choosing to proceed without a withholding agent is that in refund payment, the withholding agent may opt for installment payments.
This happens especially when the employer has limited fiscal capacity and needs to pay the refund to several employees in installments.
This installment practice makes the refund less attractive.

For instance, if an employee is entitled to a €1,000 refund and the withholding agent pays it in 5 monthly installments, the employee will have an extra €200 in their paycheck each month, an amount that will most likely slip away among monthly expenses.
Conversely, having the refund in a single payment, even if later, allows for planning more significant or consistent expenses.

Choosing to file the 730 tax return without a withholding agent is also recommended for those with an employer with limited fiscal capacity.
When the employer is insufficient, there is a risk that the full refund cannot be paid (if the withholding agent has little tax capacity, it could reach December without being able to recover all the employees’ credit to be paid out).
In this case, the employer must include the remaining amount to be paid in their tax statement, and the employee can recover it in the tax return of the following year.

Alternatively, it is necessary to ask the employer for a specific declaration allowing the employee to receive the outstanding amounts directly from the Revenue Agency.

The main issue arises for those who have the same withholding agent the following year: the situation could reoccur, and for this reason, in such cases, it is better to choose to file the 730 tax return without a withholding agent.