How to Pay Less Taxes: What You Need to Buy

How to Pay Less Taxes: Strategies and Tips

Looking for ways to pay fewer taxes is a common goal for many taxpayers.
Whether you’re an entrepreneur, an employee, or a retiree, paying taxes is a legal obligation that cannot be avoided without facing consequences.

Choosing the Flat Tax to Reduce Tax Burden

One effective way to reduce taxes is by opting for the flat tax system.
This system, introduced by law 190/2014, applies to self-employed individuals with an annual turnover of up to 85,000 euros.
The flat tax rate is 15% (which can decrease to 5% in specific cases during the first five years of activity).

The tax is calculated based on a profitability coefficient established by law for each professional category, allowing for a fixed tax payment on a percentage of earnings exempt from taxation.

Maximizing Deductions for Lower Taxes

For individuals under the ordinary tax regime, meticulous tracking of business expenses is crucial.
The principle of “who can spend less taxes” applies here.
Deductible expenses, supported by invoices or receipts with the professional’s VAT number, include:

• Purchase of professional books and magazines
• Professional training courses
• Office supplies
• Work-related costs
• Acquisition of assets for professional use

Additionally, expenses related to business meals, travel, vehicle costs, and even gifts can be partially deducted from taxable income, providing opportunities for tax optimization.

Choosing the Right Tax Regime for Business Owners

For entrepreneurs with individual businesses, selecting the appropriate tax regime is crucial to reduce tax liabilities.
Factors to consider include the type of company (e.g., limited liability company), asset protection, and careful management of ordinary and extraordinary expenses.

Indemnities for business trips are fully deductible and tax-free up to a certain daily limit, providing an opportunity for tax savings.

Utilizing Tax Deductions for Employees

Employees can also benefit from tax deductions by leveraging various expenses throughout the year.
By submitting an annual income tax return, employees can access a range of deductions, including:

• Medical expenses
• Educational expenses
• Insurance premiums
• Transportation costs
• Donations to charitable organizations

These deductions can lead to tax discounts or increased credits, ultimately reducing the overall tax burden for employees.

Smart Use of Meal Vouchers to Save on Taxes

Meal vouchers are a practical option for reducing taxes in 2024.
Both companies and self-employed individuals can purchase meal vouchers for themselves, with costs fully deductible and VAT applicable at a deductible rate.

For self-employed individuals, meal vouchers can be deducted up to 75% of their cost or up to 2% of annual turnover.
Similarly, for employees, meal vouchers represent tax savings, as the daily allowance up to a specific limit remains tax-exempt.