AADE enables correction of tax returns for 2024 retroactive earnings

The obligation primarily concerns employees and pensioners who received retroactive salary or pension payments last year, provided that the entities that paid them (employers, pension funds, etc.) have already transmitted the relevant payment data to the Independent Authority for Public Revenue (AADE). To facilitate taxpayers, the AADE has already sent notifications through the myAADEapp to users who have installed the application on their mobile phones.

In all cases, the process is automated: taxpayers must electronically submit an amended E1 tax return for the 2025 tax year, adding the retroactive amounts to the income originally declared for that year, as income relating to 2024.

By selecting the retroactive income declaration option in the E1 tax return for the 2025 tax year, the relevant amounts are automatically transferred to the corresponding fields of the previous year’s return, without the possibility of modifying any other fields or codes. Once the taxpayer proceeds with the final submission, a new tax assessment notice is issued and, where additional tax arises, a new payment identification number is automatically generated.

Under the current framework, retroactive earnings must be declared in the tax year to which they relate, rather than the year in which they were paid. For this reason, retroactive amounts received in 2024 appear in the electronic income records for 2026 but must be declared through an amended return corresponding to the relevant tax year.

The electronic submission option will remain available until 31 December 2026. Any additional tax resulting from the new assessment must be paid by 31 January 2027.

The process is not limited only to retroactive payments relating to 2024. If taxpayers review this year’s income statement and identify separately listed amounts relating to earlier years, they are also required to revisit the application and verify whether the relevant amendment option is available for each respective year.

This option mainly concerns taxpayers who have already submitted this year’s tax return but may not have realized that retroactive amounts from previous tax years were pre-filled in the electronic income records.

The AADE reminds taxpayers that under this process, the relevant amounts appear pre-filled and no amendments can be made to the remaining E1 data fields. Any other changes or corrections require the submission of a separate amended tax return. Particular attention is required in cases involving court decisions, as any applicable interest must be allocated and declared according to the year in which it was received, using the corresponding income tax return fields for each year.

At the same time, this year’s income tax return filing process for the 2025 tax year is also underway. The submission deadline expires on 15 July 2026, while for certain categories of taxpayers it is extended until 31 July 2026. Payment of the first installment is permitted until the end of July. Taxpayers opting for full upfront payment of their tax liability continue to benefit from the applicable tiered discount scheme.