More and more Romanians are turning to artificial intelligence to find answers to the problems they face, including how to declare their income or what taxes they have to pay. The responses provided by chatbots may seem clear and convincing, but sometimes they overlook important details from the legislation.
Two taxpayers learned this the hard way. In one case, incorrect information received from AI led to interest and penalties of 55%, writes Profit.ro.
He Thought the Broker Had Withheld His Tax
The first case is that of a Romanian who conducted transactions through a foreign broker. After seeking advice from a chatbot, the taxpayer understood that the tax had been automatically withheld by the broker and that he no longer needed to do anything.
However, the information was incorrect. Because the broker was not registered in Romania, it did not fall under the Romanian mechanism for withholding tax at the source. The taxpayer had to declare the income himself through the Unique Declaration.
The issue only came to light after four to five years, when the tax authority issued a tax assessment decision ex officio. In addition to the tax owed, the Romanian had to pay interest and penalties of 55%.
"AI is useful for guidance, but it becomes risky when it replaces factual analysis, documents, and correct classification," warns Ioana Dragu, tax consultant and Senior Manager at Think People, according to the cited source.
Paid 25% in Ireland, but Romania Only Recognized 3%
Another case involved dividends obtained from Ireland. The taxpayer had a 25% tax withheld there, and the response received from AI made him believe that he had nothing else to pay in Romania.
However, the tax calculation was more complex. According to the agreement between Romania and Ireland to avoid double taxation, the Romanian state recognized only 3% of the tax paid abroad. The difference had to be paid in Romania.
Why AI Responses Can Be Risky
Chatbots generally provide general answers and do not know all the details of a case: the country from which the income comes, the status of the broker, the taxpayer's documents, or the provisions of a tax treaty.
In addition, legislation can change, and some platforms may provide incomplete or outdated information. Artificial intelligence can be used for initial guidance, but experts recommend that tax decisions be verified in legislation or with the help of a consultant.