Below are presented some of the key changes.
Changes to administrative penalties
Some administrative penalties have been changed as follows:
- Late filing of a tax return will be subject of a penalty of ALL 10,000 for taxpayers registered for corporate income tax and ALL 5,000 for other taxpayers.
- Prepayment instalments of corporate income tax or simplified profit tax on small businesses will be subject to penalties of 10% on the unpaid balance in case of failure to pay within the respective deadlines.
Changes in the tax appeal process
Starting from January 01, 2017, the Tax Appeal Directorate will be transferred under the Ministry of Finance and will take decisions on tax appeals concerning amounts up to a threshold limit.
In addition, a new structure “the Commission for Assessment of Tax Appeals” will be established under the Ministry of Finance and will deliberate on tax administrative appeals involving amounts above the threshold mentioned above.
The burden of proof for the correctness of a tax assessment notice will not lay any longer with the taxpayers but will be determined based on the Administrative Procedures Code.
The decisions of the Tax Appeal Directorate ot the Tax Appeal Commission will be conclusive for the Regional Tax Directorate, they will no longer have the right to initiate court procedures against such decisions.
Tax audit process improvements
- Tax audit notification
Tax authorities will be required to send to a taxpayer:
– A tax audit notification at least 30 calendar days prior to initiating the tax audit,
– A fiscal visit notification at least 10 calendar days prior to starting the visit.
The tax audit notification will include not only the initiation date and time but also the termination date. The tax audit initiation date can be postponed up to 15 working days, upon approval by the General Tax Director.
- Voluntary re-declaration and payment of tax liabilities after tax audit notification
The taxpayer will be offered a ‘self-declaration form’, sent as attachment to the tax audit notification, for the voluntary re-declaration and payment of tax liabilities for any not declared transactions.
The re-declaration of such tax liabilities and the payment of them and any related interest should take place during the 30 calendar days period prior to the tax audit initiation.
The tax liabilities concerned will be subject to the respective administrative penalties as provided by the Law, to be imposed through the tax audit assessment. However, in case the taxpayer has opted to re-declare and pay the tax liabilities as described above, such penalties will be capped to 50% (in case they are higher).
- Tax Assessment Notice
Tax authorities will determine in tax assessment notices also the value of reduction of the tax loss and of the tax credit balances, where applicable.
- Tax re-audit
The decision to re-audit a tax period already audited, which is signed by the General Tax Director, should be attached to the tax audit notification and should clearly state the reasons for re-audit.
- Revision of deadlines for tax audits following reimbursement requests
In case of a tax audit following a tax reimbursement request submitted by a taxpayer, the audit deadlines (e.g. deadline for drafting the preliminary audit report, deadline for the taxpayer to present its objections, deadline for drafting the final audit report etc.) will be limited respectively to 5 calendar days. This change will ensure the meeting of the 30 and 60 days deadline for the tax reimbursement approval and payment already provided by this Law.