GFD unifies procedure for waiving tax penalty and interest

The new instruction changes certain elements of the tax administration’s decision making where a taxpayer has applied for a waiver of a fine for the late filing of a tax return or a waiver of a portion of a tax penalty or late payment interest.

The instruction expands the list of justifiable grounds on which a fine for late tax assertion may be waived. The new grounds are, among others:

• the tax assertion was filed late by the taxpayer but the tax was paid in full within the original or substitute deadline (where any tax was payable),
• the delay in the filing of the tax assertion did not exceed 15 calendar days,
• the fine arose upon a late-filed tax assertion without the tax administrator’s call.

In the first two cases, the tax administrator may waive 70 percent of the fine, in the last case, 50 percent.

As regards tax penalties, the instruction abolishes two types of breaches of taxpayer obligations that have now become obsolete (related to the personal initiation and termination of a tax inspection).

The instruction also tightens the criteria for the assessment of an individual’s adverse economic and social situation: only situations involving persons with income below 48 times the minimum wage shall be considered unfavourable.  Also, the amount of the waiver will be reduced by half where the taxpayer “has had more than one tax debt in the last three years, for which the tax administrator has initiated enforcement proceedings under the Tax Procedure Code."

Finally, we would like to remind you that although the list of justifiable grounds for waivers is not exhaustive, we recommend abiding by them. Indeed, recent court decisions in which taxpayers have claimed grounds beyond the scope of the instruction, such as the excessive length of tax proceedings (5 Afs 317/2023) or a tax advisor’s error (5 Afs 314/2023), confirm that it is very difficult to obtain a waiver for reasons not listed in the instruction.