IRS: Automatic Fines Issued Without Clear Explanations

The automatic imposition of fines will be activated from next month by the Independent Authority for Public Revenue (AAΔE) on taxpayers who are late in submitting income tax, VAT and withholding tax returns. The notices will be sent electronically via email and the myAADEapp application.

The new application is part of the updated planning of the AADE, which provides for the “Automation of the issuance of fine enforcement acts” during the submission of a) VAT/retained taxes/legal persons’ returns and b) form E1.

Specifically, from October, fines will be automatically assessed via TAXISnet immediately after the submission of the late return. For example, when a taxpayer submits a late return, the system will clear the tax and simultaneously impose the fine for the delay. The fines amount to 100 euros for individuals, while for businessmen they reach 250 euros for those who keep simple books and 500 euros for those who keep double-entry books.

To date, the imposition of fines has been significantly delayed by the competent tax authorities, resulting in interest being added and the final amounts increasing. These amounts are even increased by percentages of up to 2.5%, due to the accumulation of interest for late payment from the date the return should have been submitted until the date of the late assessment of the fine.
All of this will stop once the new automatic fine system is implemented. The new process will eliminate these delays, reducing the financial burden on taxpayers, as fines will be imposed immediately after the late filing of the return, without additional interest.

The IRS fines and when they are imposed

In case of late submission of an initial income tax return, a fine of 100 euros is imposed. Especially if the taxpayer is engaged in business activity, the fine rises to 250 euros if the taxpayer keeps single-entry books or 500 euros if the taxpayer keeps double-entry books.
In case of late submission of an income tax return:

a) If the original late return had resulted in a tax credit balance to be refunded and the late amended return resulted in a tax debit amount to be paid, then:
If the taxpayer is not an entrepreneur or freelance, he/she will be charged a fine of EUR 100.
If he is a businessman or a freelancer, he will be fined 250 euros if he keeps simple books or 500 euros if he keeps double-entry books.
In any case, if the deadline for payment of the tax has also passed, the taxpayer will also be charged with late payment interest calculated on the difference between the amount of the original and the late amended return, at 0.73% for each month that has passed from the normal payment deadline to the date of submission of the late amended return.

(b) If the original late return resulted in a tax debit balance to be paid and the late amended return results in an increase in the tax debit balance, then:
If the taxpayer is not an entrepreneur or self-employed person, a fine of EUR 100 will be charged.
If the taxpayer is an entrepreneur or a self-employed person, he/she will be charged a fine of 250 euros if he/she keeps single-entry books or 500 euros if he/she keeps double-entry books.
In any case, if the deadline for payment of the tax has also passed, the taxpayer will also be charged with late payment interest calculated on the additional difference in the debit balance, at 0.73% for each month that has passed from the normal payment deadline to the date of submission of the late amended return.

In any case, no penalty (EUR 100, 250 or 500) is imposed if the original or amended late return results in a tax amount to be paid of up to EUR 100.

With regard to FVAT and withholding taxes, in any case of late submission of an initial or amending declaration, fines of 250 euros apply for those keeping simple books and 500 euros for those keeping double-entry books for entrepreneurs and freelancers. However, no fine is imposed in the case of late submission of an amending declaration, provided that the original declaration was submitted within the deadline.

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