Liberation package III postpones filing of tax returns and payment of tax
In Financial Bulletin No. 9, the Ministry of Finance has published a third liberation package, generally and under certain conditions waiving tax, interest, and penalties. Among other things, sanctions for the late filing of personal and corporate income tax returns for 2019 and for late tax payments shall be waived as long as the return is filed and the tax paid by 18 August 2020. This does not apply to taxpayers administered by the Specialised Tax Authority.
Waiver of sanctions for late filing of income tax return and tax payment
The first liberation package waived interest and penalties for the late filing of personal and corporate income tax returns for 2019, and for late payment of tax by taxpayers who were to file their tax returns by 1 April 2020, on the condition that they file their tax returns and pay tax by 1 July 2020 at the latest. The third liberation package has now extended this deadline to 18 August 2020.
Similarly, sanctions concerning personal and corporate income tax returns of taxpayers who are obliged to have their financial statements audited or have their tax returns prepared and filed by a tax advisor, i.e. taxpayers who have to file their tax returns and pay tax by 1 July 2020, have been waived as long as they file their tax returns and pay the tax by 18 August at the latest. This general waiver, however, excludes entities whose tax administrator is the Specialised Tax Authority; these taxpayers may still apply to the tax administrator for an extension of the deadline for filing tax returns, as long as they meet the statutory conditions for extensions as per Section 36(4) of the Tax Procedure Code.
Waiver of penalty for late filing of a notice of tax-exempt income
The third liberation package also waives the penalty for the failure to notify the tax authority of tax-exempt income received by individuals in 2019, as long as such a notice is given by 18 August 2020 at the latest.
Waiver of sanctions for late filing of immovable property acquisition tax return and tax payment
The second liberation package waived interest and penalties for late filing of immovable property acquisition tax returns, and for late payment of tax, until 31 August 2020. The third liberation package has now extended this deadline to 31 December 2020 – by this date, the return has to be filed and the tax paid, as a precondition for waiving any sanctions. The waiver applies to tax returns with a filing deadline between 31 March 2020 and 30 November 2020, and to tax due and payable in the same period. It should be noted that if parliament approves the cancellation of the immovable property acquisition tax with retrospective effect (as proposed), tax liabilities due in this period will cease to exist.
Waiver of interest on deferred tax amount, where the deferment of tax payment was granted upon an individual application
Taxpayers who based on their individual applications pursuant to Section 156 of the Tax Procedure Code have been granted a deferment/postponement of tax payments or the payment of tax in instalments for reasons connected with the outbreak of SARS-CoV-2, will have the default interest and the interest on deferred tax amount waived, if originated from 12 March 2020 (the beginning of the state of emergency) to 31 December 2020.
Other measures of the third liberation package
- Waiver of VAT on gratuitous supplies of basic protective tools, namely face masks, respirators, disinfectants and other listed items (or gratuitous supplies of goods intended for the production of such) where the duty to report tax originated between 18 May 2020 and 31 July 2020.
- Waiver of administrative fees for filing certain applications with tax or customs authorities if filed by the end of 2020 (application for deferment of tax payment or for payment of tax in instalments, application for waiver of default interest, application for waiver of penalty for failure to file a VAT ledger statement, etc.).
- Waiver of penalty for late filing by employers of withholding tax statements for 2019 where the statement should have been filed with the tax administrator by 31 May 2020.
- Waiver of sanctions connected with late filing of an additional personal income tax return for 2018 and late payment of additionally assessed tax for 2018 where the reason for filing the additional tax return for 2018 was a change in the manner of deducting expenses in the course of 2019 or the start of keeping accounts or tax records. The above sanctions will be waived as long as the additional tax return for 2018 is filed and the tax paid by 18 August 2020 at the latest.