Tax Deductions: When is a Bank Statement Needed for the 730/2024 Tax Return?

Understanding the Importance of Bank Statements for Tax Deductions

As the tax return season kicks off, many individuals wonder about the role of bank statements in accessing tax deductions through the 730/2024 model.
The process starts with the availability of the pre-filled 730/2024 form for consultation on the afternoon of April 30, with the possibility of making modifications starting from May 20.

In order to benefit from tax deductions that lead to tax savings, it is necessary to provide evidence of the expenses incurred that qualify for such benefits.
In exceptional cases, bank statements can be used as proof of expenses.

Importance of Traceable Payments

With the 2020 budget law, new rules were introduced requiring payments to be made through traceable means to access tax benefits.
This implies the need to keep documentation, such as bank statements, for 5 years to support the expenses.
While cash payments are limited, exceptions apply to specific cases like healthcare services within the National Health Service or accredited facilities and the purchase of medication at pharmacies.

Bank statements are essential when payments are made by credit card or debit card.
These documents must be submitted when filing the tax return using the 730/2024 model to benefit from deductions and must be retained for 5 years for potential audits by the Revenue Agency.

Clarifications on Traceable Payments

Over time, thanks to the clarifications provided by the Revenue Agency, complying with the rules on traceable payments has become more straightforward.
The introduction of electronic invoicing has also facilitated this process, as it allows the Revenue Agency to access relevant data on deductible expenses, which are already included in the pre-filled 730/2024 form.

In general, when filing the tax return with the assistance of professionals or Tax Assistance Centers (Caf) without using the pre-filled form or when modifying it, receipts for payments made through traceable means must always be presented.
In the case of credit card or debit card payments, bank statements or credit card statements can serve as proof of payment.

Ensuring Tractability of Payments

For healthcare expenses, a 19% deduction is only applicable if payments are made through bank transfer, postal payment, or other traceable systems (debit cards, credit cards, prepaid cards, bank drafts, and postal orders).
Cash payments are allowed only for purchasing medication, medical devices, and for healthcare services provided by public or privately accredited facilities within the National Health Service.

To demonstrate traceability, various documents can be used, such as bank receipts related to the expenses incurred or bank statements when payments are made by credit card.

In conclusion, it is no longer sufficient to rely solely on receipts or invoices indicating the expenses.
Taxpayers must prove that the expenses were paid using non-cash methods.
Requesting bank statements allows taxpayers to safeguard their tax deductions in case they do not have receipts for payments made through POS terminals.