GFD’s new instruction: penalty waivers of up to 100 percent
The General Financial Directorate's (GFD) Instruction D-72 on the waiver of tax accessories (tax-related penalties and interest) became effective on 15 September, responding to the amendment to the Tax Procedure Code in effect from 1 July 2025 that regulates the rules for waiving penalties.
Until now, it was possible to waive up to a maximum of 75 percent of a penalty depending on the level of the taxpayer’s cooperation in the assessment of the additional tax. This remains in place also after the amendment. However, the new instruction also anticipates a waiver of 100 percent of a penalty incurred after 1 July 2025 if it arose on justifiable grounds. For the new regulation to be applicable, the delivery of the order to pay additional tax, or another demonstrable communication of its contents to the recipient, must have taken place after 1 July.
The GFD Instruction lists only one situation in which the penalty may be waived in its full amount:
"An inadmissible additional tax assertion was filed by the taxpayer before an inspection procedure was initiated, and the information asserted therein was used by the tax administrator in determining the final tax, whereas the additionally assessed tax does not exceed twice the tax asserted by the taxpayer."
However, defining one justifiable situation does not completely rule out the possibility that the tax administrator may also waive higher percentages of penalties on other justifiable grounds not specified in the instruction.
If the tax administrator determines that there were no justifiable grounds on the taxpayer’s part for the tax penalty to arise, they may waive up to 75 percent of the penalty charged, as has been the case to date.
Prohibition of double jeopardy
The instruction also considers cases where the taxpayer has been punished (finally and conclusively) for a tax-related crime. Following the Tax Procedure Code, the instruction allows for a reduction of the tax penalty depending on the type and amount of the punishment imposed in criminal proceedings. In these cases as well, a waiver of up to 100 percent of the penalty may be granted.
Concurrence of a waiver and court proceedings
A new procedure has been laid down to deal with situations where a taxpayer has filed an application to waive tax-related penalties and interest, and the tax itself is then revoked following a judicial review and returned to the appellate authority for further proceedings. In such cases, the tax administrator shall informally notify the taxpayer that their application will only be dealt with after the decision on the assessed tax becomes final and conclusive.
The full wording of GFD Instruction D-72 can be found here.