The Independent Authority for Public Revenue (AADE) is entering a new phase of intensive tax audits, placing 12,000 taxpayers identified as "high risk" under close scrutiny. Following the completion of tax return submissions, the tax administration is utilizing advanced digital tools to identify cases where a taxpayer's lifestyle and banking activity are not justified by their declared income.
The Cross-Checking Mechanism
The investigations focus primarily on citizens reporting low incomes while simultaneously recording high living expenses or possessing significant assets. AADE is employing the BANCAPP system, which allows for the automated retrieval of banking data and its comparison with tax records. The audits cover a broad spectrum of data points, including:
- Interest from bank deposits and investment products (repos).
- Electronic payments and consumer spending.
- Loan repayments and insurance premiums.
- Utility bills (electricity, water) and telecommunications costs.
- Income from short-term rentals (Airbnb) and remittances.
Procedure and Deadlines
Taxpayers flagged by the system will receive digital notifications and will be required to provide supporting documentation within 15 days. Explanations must be submitted either to the relevant tax offices or to the Center for Tax Procedures and Audits (KEFORDE). If the explanations are deemed insufficient, AADE will proceed with tax assessments, imposing the mandated fines and surcharges.
Focus on the 2020 Tax Year
Particular attention is being paid to cases involving the 2020 tax year. This is due to the upcoming statute of limitations, which expires on December 31, 2026. The tax administration is accelerating procedures to ensure that audits are completed and liabilities are assessed before the deadline.
