if works on green receipts, had to open activity in Finance. However, if this situation changes, it must close the activity, also with Finance. When you start your activity as an independent professional, you are subject to a set of obligations towards the State and Social Security that remain as long as the activity is open. Therefore, your obligations towards these entities only cease when you close the activity in Finance. Therefore, to avoid problems in the future, it is important that you know when and how to do it.
When should the activity close?
If you work with green receipts and stopped exercising the activity, had a strong reduction in income or started working for someone else, must consider whether it is worth keeping the activity open or not. In the case of ceasing to carry out the activity, clearly yes, but in other cases it may not be.
Stopped doing the job
If you stop doing the activity altogether, close activity in Finance. Only then will you no longer have to fulfill the obligations inherent to self-employment, whether in terms of IRS, VAT and Social Security. And if you are not working for an employed person, see if you meet the conditions for access to the subsidy for ceasing activity (the equivalent of the unemployment subsidy for employees).
End of an activity (registered CAE) but start of another
But if he stopped exercising the activity for which he opened activity, but also started another one as a self-employed worker, do not close the activity. Simply add a new activity to the one already open. Close an activity and opening another one with another CAE does not bring you any advantage.
There was a sharp decrease in income
If your income has dropped so drastically that paying the associated charges becomes too heavy, whether or not to close the activity depends on the number of entities you work for.If you only work for one, consider closing the activity and issuing just one isolated act. You will have to pay VAT on its value and IRS, but this only at the time of the annual declaration. But you will stop paying Social Security contributions. Note, however, that the single act cannot have a value greater than €25,000. If it is of this value or higher, you will have to keep the activity open.But if you continue to work for several companies, you cannot close the activity, since the single act can only be passed once a year and for a single company. Here the solution will be keep the activity open and verify that it meets the requirements ask for the subsidy for cessation of activity or partial subsidy for cessation of activity.Read more: Unemployment: What subsidy are self-employed workers entitled to?
Started working for someone else
if it started to work for others and will completely stop working as an independent, close the activity in Finance.But if you want to accumulate both, you will have to continue paying IRS and VAT on your work as an independent worker, but you will not have to make contributions to Social Security or present the respective declaration quarterly, which is an advantage. Also read: Working for someone else and on green receipts. What are your obligations?
What happens if you don’t close the activity in Finance?
If you stop working as an independent worker and do not notify the Tax Authority, for the Tax Authorities you continue to be a worker and even if you have not issued a single receipt you must continue to fill in Annex B (relating to business and professional income) of your IRS tax return. Likewise, you will have to submit the quarterly statement to Social Security.
Who can close the activity?
If when opening the activity you have chosen the simplified regime, can close the activity by yourself. But if you have chosen the organized accounting regime, then only your Official Account Technician (TOC) can close your activity.
How to close the activity in Finance
To close the activity in Finance you have to enter your personal area logging in with your taxpayer number and your password.Then you must: Enter the Services area; Choose the “Activity” option and then select “Activity Cessation”; Fill in the requested data; Pay attention to the activity cessation date (note that the declaration must be delivered within 30 days of the closure, under penalty of having to pay a fine); Insert the reason for the closure of the activity in the respective boxes; Validate and submit the document. print proof of cessation of activity. In it you will find the date on which you communicated the cessation of activity. And that date is important because it stops paying contributions from the first day of the month following which it declared the cessation of activity. attach it to the letter from the Tax Authority that you will receive at your home.
When closing the activity, you must mention the reason
When filling in the data on the cessation of activity document, you must state the reason why you are doing it. In that document, there are tthree sections where the various reasons for ceasing the activity that are considered valid in legal terms are listed. Simply select the options that suit your specific situation.Section 6 – VATThis section lists the reasons accepted as justification for closing the activity under the terms of paragraph 1 of article 34 of the Value Added Tax Code (CIVA). reason for termination is usually point 1(b) (“If the company’s assets are depleted, through the sale of the assets that constitute it or through their allocation for the owner’s own use, for the staff or, in general, for purposes unrelated to the same, as well as for their free transmission”), since declares that the company’s assets have been transferred, which liquidates the activity.Section 8 – IRSLikewise, this section lists the reasons for termination in accordance with article 1 and 2 of article 114 of the Personal Income Tax Code (CIRS). Once again you will have to choose what best fits your situation. For the self-employed, the reason for terminationthe one that is most used is that relating to point a) of paragraph 1: “acts related to the business and professional activity should cease to be habitually practiced, if there are no properties allocated to the exercise of the activity”. This is because it concerns the end of service provision.Section 10 – Corporate Income TaxThis section 10 contains the reasons for termination, in accordance with paragraph 5 of article 8 of the Corporate Income Tax Code. That’s why, does not apply to individuals.
Activity closed, don’t worry about Social Security
When he opened his activity in Finance, he didn’t have to do it in Social Security, since it was AT that made the connection with that entity.Thus, also at the end of the activity, the Social Security will be informed by Finance. In fact, under the terms of Ordinance No. 121/2007, of January 25, communication of the start or cessation of professional activity by self-employed workers is carried out by crossing data between Social Security and AT.
Indicate cessation of activity in the IRS declaration
Although when he opened the activity he did not have to mention it in the annual IRS declaration the following year, the same does not apply to the closing of the activity. In fact, when submitting the IRS declaration in the following year, you must refer to the cessation of activity in the annex B, in table 14.
Can I reopen an activity after closing it?
Yea, if you restart the activity you can open it again. But, be careful, as this is not the first time that the activity has opened, it may not have the same benefits. Read also: Green receipts: The Social Security exemption is over, now what?
A professional writer by day, a tech-nerd by night, with a love for all things money.