Pregledni rad

Taxation of Unreported Personal Income

Jernej Podlipnik

Sažetak

Individuals are often reluctant to pay taxes, so they do not (fully) report the income they earn, but cannot resist publicly showing their wealth, either by possessing valuables or by high spending. Significant gaps between individuals’ increases of net property, their spending and taxed or tax-free sources in a certain period usually attract the attention of tax authorities. They use these gaps to calculate tax bases in tax assessment procedures, taking into account a very simple economic logic that individuals’ income of certain period is the sum of their consumption and a change in their net wealth of the same period. For reasons of simplification, spending is sometimes excluded from the equation and therefore unreported income equals a change (an increase) of individuals’ net wealth of certain period. Neither way are personal incomes ascertained factually but are merely estimated. Whenever incomes, which are estimated in this way, exceed the reported taxed or tax free sources, they can be taxed. Although countries discussed in this article (Croatia, Serbia, Austria and Slovenia) all basically use the same economic logic for estimating individuals’ unreported income, their legislation differs, namely regarding the type of tax which unreported income is taxed with (regular income tax or special tax), the tax rate (standard or special tax rate), the statute of limitations (from three to ten years), the obligation of tax authorities to renew the already completed personal income tax assessment procedure, the possibility of individuals to be able to prove the true nature of unreported income, and the competence of tax authorities to publish personal data of individuals who have had tax levied on their unreported income. This
article presents and analyses the similarities and differences of regulations in selected countries.

Ključne riječi

taxation; unreported income; estimation; net worth method; consumption; Slovenia; Croatia; Serbia; Austria

Hrčak ID:

134709

URI

https://hrcak.srce.hr/134709

Datum izdavanja:

3.12.2014.

Podaci na drugim jezicima: slovenski

Posjeta: 2.311 *