Consequently, the relaxation brought by the cancelation of the previous 5% and 15% penalties for late payment lasted only a few months, as new penalties of similar amounts are now being introduced for undeclared liabilities. In addition, taxpayers need to bear in mind the late payment penalty of 0.02% per day, as well as late payment interest of 0.04% per day.
This is merely one of several measures being taken by the authorities to clamp down on taxpayers who fail to meet their obligations. Rules in relation to joint responsibility are being tightened too. New provisions have been introduced into the Fiscal Procedure Code to clarify that an individual can have joint responsibility with others who fail to declare or pay taxes in an act which is deemed to be in bad faith. For instance, a person who controlled directly or indirectly a company that has become insolvent could be investigated by the tax authorities for the operations managed and controlled by that company. The tax authorities may take action against a person who sold the assets of a company in an act which is deemed to have been in bad faith, prior to the initiation of insolvency procedures against that company.
In a further sign of a toughening tax environment, the Ministry of Public Finance aims to recognize “video-audio records” as evidence in tax disputes. In this context, taxpayers are looking cautiously to see whether a new wave of tax increases or other constraints will follow.