Category B Flashcards
What is Category B?
Category B is Business and Professional Income.
What type of income falls in Category B?
- Income from commercial, industrial, agricultural, forestry or animal-rearing activity
- Income from the provision of services (Self employed)
- Income resulting from intellectual or industrial property or the provision of information relating to experience gained in the industrial, commercial or scientific sectors.
What type of income is ‘attracted’ to Category B?
- Income falling under Article 3
- Rental income attributable to activities that generate business and professional income
- Investment income attributable to activities that generate business and professional income
- Capital gains obtained within the context of business and professional activities.
Can Rental income be ‘attracted’ to Category B?
Yes, by option of the taxpayer.
What constitutes rental income in relation to Category B?
Rents from rural, urban and mixed-use properties paid or made available to the respective holders.
What is the taxable amount for fiscally transparent companies?
The taxable amount is attributed to the shareholders and included in their taxable income as net income in Category B.
What are the methods of determining the net income of Category B?
- Based on the rules of the simplified system
- Based on organized accounting
- In accordance with the rules applicable to Category A
- Isolated acts.
What conditions allow taxpayers to fall under the simplified regime?
Taxpayers that didn’t exceed an annual net income of €200,000 in the previous year.
When does the simplified system cease to apply?
When the €200,000 amount is exceeded in two consecutive tax periods or by more than 25% in a single year.
What is the method for calculating income in the simplified system?
0.75 x income + (15% of gross income - expenses and charges).
What is required for organized accounting?
You have to choose organized accounting; otherwise, you fall under simplified accounting.
What is the rule regarding the deduction of losses in Category B?
The negative net result can only be deducted to the positive net income of that same category.
What is the maximum amount that can be deducted as losses in Category B?
The deduction cannot exceed 65% of the respective taxable profit.
What happens to excess losses in Category B?
Excess losses may be forwarded to the next year.
Is aggregation of taxable income in Category B mandatory?
Yes, taxable income is subject to mandatory aggregation.
What is the withholding tax rate for Category B?
Withholding is done at 23% for Category B.
