A full-time student engaged in business activities

A full-time student engaged in business activities

 

Question:

Hello,

I have the following case:
I am a full-time student and in my spare time developing phone applications. I want the next one paid. Any proceeds I will receive from the distributor - Google Ireland. I am a natural person and my agreement with Google has been concluded as such.
My questions are two:
- As an individual, how can I legalize the revenue and pay the required taxes?
- Will I be owed CSR and HIC insurance, given that I am insured by the state HI budget because I am a full-time student?

Thanks!

 

Answer:

Hello,

In any case, you will be doing business. The question is to choose the most appropriate form for this. If you do not select this form and simply declare any income at the end of the year in the stipulated annex to the DGT for such cases - you will pay 15% tax on the entire amount received from this activity, without being able to reduce the tax base at any cost.

If you are registering as a freelance individual (you need to have some document proving your ability to produce such applications - diploma in this field (maybe secondary), certificate of qualification in this field, etc.), then before calculating the amount of tax due, all realized revenue is deducted from 25% of the legally recognized costs (without proof of documents) and a 10% tax is charged. When you start working as a freelancer, you also have the obligation to insure yourself as a self-insured person (SAL) by making insurance contributions to the minimum SAL insurance income. Insurance includes health and retirement benefits. Insurance declarations are submitted on a monthly basis.

You may also sign up for an EOOD to conduct your business, but then you will need to re-contract with Google on behalf of your company. Social security will be the same as in the liberal profession.

Please note that whichever form of business you choose - as a natural or legal person - you will be subject to mandatory VAT registration up to 7 days before providing the Google-Ireland service or up to 7 days before receiving an advance payment for such a service (application and application development are services).

The grounds for compulsory registration are Art. 97A, paragraph 2 of the VAT Act, starting from the position that the place of performance of the services when the recipient is a taxable person (Google-Ireland) is the place where the recipient has established his independent economic activity (Ireland). In this case, there will be no VAT charge on the invoice that you will issue to Google-Ireland and you will not owe it. However, an additional VIES declaration is made out, stating to whom in the EU and for what amounts the services are provided and the NRA forwarding this information to the respective countries. The presumption here is that the recipient of the services is self-assessing the VAT due and the VIES declaration filed serves to verify that this is done.

As for Health Insurance - when students are not employed to receive health services, they must be health insured and this is borne by schools and universities. If you start an activity and file a declaration for starting an activity, it is noted in the declaration and the beginning of the insurance (health and pension). In this case, the university should suspend your health insurance.

We hope we have been helpful.

Greetings!