Home based business
TaxProtection - Kasimatis Stylianos - Accounting Office - Santorini
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At TAX PROTECTION, we fully understand the need for expert support and professionalism when you choose to set up your own home based business. Running a business from your home can offer unique opportunities, but it also requires the right guidance to reach your full potential.
Our services offer experience and knowledge in taxation and accounting, as well as customized solutions that meet your individual needs. Regardless of the field of activity you choose, our experts will help you understand the laws and tax regulations governing home-based businesses, while providing advice on how to effectively manage your finances.
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The observations for home based businesses are as follows:
- Only sole proprietorships are allowed, not companies or other legal entities.
- No trade or food preparation activity is allowed. Only provision of services is permitted.
- Home based businesses are required to set up a business account and have a POS terminal.
- The taxation for sole proprietorships is the same as that of other sole proprietorships, with a rate of 9% for the first €10,000 of net profits.
- Next-use tax advance is 55%, but for the first time business income is capped at half.
- There is no tax exemption for sole proprietorships, taxation starts from the first euro.
- If a sole proprietorship declares losses or zero profits, the professional is taxed based on his assumptions, such as cost of living, car, residence, etc.
- The application fee is set at €650 per year and is confirmed with the personal income tax return. There is an exemption for the first 5 years.
In summary, you can set up a sole proprietorship based in your home, but you must meet the above requirements and comply with the tax regulations that apply to sole proprietorships. This includes issuing invoices, recording income and expenses in the business account, as well as paying taxes in accordance with the conditions mentioned above.
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TIPS – Your home based business
Your Home Based Business - Allowable Expenses and Tax Exemption
When your home serves as your business headquarters, there are certain expenses you can justify:
- DEKO (Public Electricity Company) and heating bills, as well as other related house expenses, can be justified as expenses at a rate of about 30% of their total value, once you take into account the square meters of the house used for business purposes.
- Car expenses are not considered expenses unless the vehicle is used for business or leasing.
In addition, there is a possibility of exemption from Value Added Tax (VAT) for businesses with an annual turnover of up to €10,000.00:
- According to Article 39 of the VAT code, flexibility is provided for small businesses that declare a total gross annual income of up to €10,000, and exempts them from the obligation of the VAT regime.
- However, if the total gross income exceeds €10,000, your business must register for VAT and submit the corresponding VAT return. The change is made by declaration to the tax office, in the area where the company's headquarters belong, within 30 days from the beginning of the tax year.
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