Tax Alert Extension of the discounts on tax penalties objection deadlines till 31 Jan. 2019December 7, 2018
Tax Alert Extension of the discounts on tax penalties objection deadlines till 31 Jan. 2019
Please be informed that the Law #110 dated 30th November 2018 and published in the Official Gazette #52 on the 6th December 2018 (attached a scanned copy) has extended till the 31st January 2019 the discounts on the tax penalties and the objection deadlines set in the Budget Law 2018 (Law#79). We hereby remind you of the articles of the Budget Law 2018 related to these topics:
DISCOUNT ON PENALTIES
Article 17: 100% discount on penalties on (i) failure to maintain accounting records for taxpayers taxed on estimated profit basis and (ii) issuance of invoices not compliant with the tax law and regulations.
90% discount on all other tax violations provided that the taxes and the discounted penalties are paid within 6 months from the publication of this law (i.e. now before the 31st January 2019).
Articles 18 to 22: 90% discount on late payment penalties due to government entities, including Municipality fees, Mechanic fees and National Social Security Fund (NSSF) provided that the late payment duties and fees as well as the discounted penalties are paid within 6 months from the publication of this law (i.e. now before the 31st January 2019). However, the unpaid NSSF contributions and their related discounted penalties can be paid by installments to the NSSF over 5 years with an interest rate of 5% per year provided that 20% of the late payment and the discounted penalties are paid within 6 months from the publication of this law. In case of a failure to pay an installment, all the taxes will be due in addition to 12% interest.
Article 24: Total exemption on penalties due by taxpayers concerned by the application of the Article 53 of the Income Tax Law (i.e. taxpayers who work in several places or are self-employed at the same time that should fill and declare the R8 tax form) for violations occurred till the year 2016 provided that the taxes are paid within 6 months from the publication of this law. This exemption doesn’t cover the penalties already paid before the publication of this law.
EXTENSION OF THE TAX OBJECTION DEADLINEArticle 23: The taxpayers who have been notified of a tax adjustment after the 1st January 2009 and who did object this tax adjustment within the deadline set by the Tax Procedures Law (Law #44/2008) or whose objection were rejected in form at the level of the tax administration or the objection committee while they didn’t fully pay the adjusted taxes as of the publication of this Law, will be granted 6 months from the publication of this Law (i.e. now before the 31st January 2019) to file their objection towards the tax administration or the objection committee provided that 10% of the adjusted taxes and duties are paid prior to submitting such objection. The tax administration will have one year from the publication of this law to conclude on these tax objections.
INSTALLMENT FOR PAYMENT OF TAXES WITHHELD AT SOURCE AND VALUE ADDED TAX (VAT)
Article 25: Unpaid taxes withheld at source (i.e. tax on interest, tax on dividends, etc.) and Value Added Tax (VAT) related to the fiscal periods up to 31 December 2016 can be installed based on a written request submitted to the tax administration within 6 months form from the publication of this law provided that 15% of the taxes due is settled within this period of 6 months. In case of a failure to pay an installment, all the taxes will be due in addition to 12% interest.
AMNESTY ON INCOME TAX AND VALUE ADDED TAX (VAT) ADJUSTMENTS HELD AT THE OBJECTION COMMITTEES
Article 32: An amnesty equal to 50% of the amounts of the objected tax adjustments (excluding late declaration and payment penalties) held at the objection committees but not yet concluded by the latter as of the publication of this Law for income tax adjustments covering years up to 2012 (inclusive) and Value Added Tax adjustments covering years up to 2016 (inclusive). To benefit from such amnesty, the taxpayers should submit a written request to the relevant tax department and pay the discounted amount due as per this amnesty within 4 months from the publication of this Law. The taxpayer has also the option to pay 25% of the discounted amount due within the 4 months period mentioned above and settle the remaining balance over 3 consecutive yearly installments subject to the interest rate set in the Tax Procedure Law. In case of a failure to pay an installment, the remaining balance will be subject to 12% interest. The taxpayer is not allowed to benefit from such amnesty on part of the objected tax adjustment. This amnesty covers all points of the objected tax adjustment. The objection committees will stop deliberating on any tax objection covered by this amnesty.
We remain at your disposal should you need any further clarification or information on this subject.
DAHER & PARTNERS