Tax penalties are sanctions that may be imposed in cases where tax legislation is not complied with or tax obligations are not fulfilled. Tax penalties may be imposed as a result of a tax inspection or in cases such as failure to submit a declaration within the declaration period, submitting a false declaration, submitting an incomplete declaration, not making a payment within the declaration period.
The calculation of tax penalties is made using the rates and methods specified in the tax laws. Tax penalties may vary according to the period of application of the penalty, the type of tax and the type of penalty.
For example, when a declaration is not submitted within the declaration period or an incomplete declaration is submitted, a late payment penalty of 1% of the tax amount is applied. If the declaration is not submitted within the declaration period, a penalty for filing a declaration may also be applied. In addition, a penalty of up to 50% of the tax amount may be imposed if a false declaration is submitted or tax is evaded.
There may also be exemption, deferral and reduction of tax penalties. Tax legislation may contain detailed provisions for special cases. For example, the tax penalty rate may be reduced for amounts below a certain rate.
Tax penalties play an incentive role for taxpayers to fulfil their legal obligations and comply with tax legislation. Compliance with tax legislation is the best way to avoid tax penalties and sanctions. Taxpayers can avoid tax penalties if they comply with the tax legislation by filing their tax returns correctly and on time, making their tax payments regularly.