Voluntary disclosure of a tax offense

A misdemeanor is an unlawful act defined as such by law or other regulations issued by a competent authority, for which a corresponding penalty is prescribed.

Tax misdemeanors are violations of the rules set out in tax legislation, including:

• misdemeanors defined by the Law on Tax Procedure and Tax Administration,
• misdemeanors prescribed by other tax laws,
• as well as specific offenses covered exclusively by the Law.

When is a misdemeanor procedure not initiated?

If a taxpayer (e.g., an entrepreneur) commits an act or omission that qualifies as a tax misdemeanor, a misdemeanor procedure will not be initiated against them, provided that:

• this is done before the Tax Administration undertakes any action (such as an inspection or filing a request to initiate misdemeanor proceedings),
• the taxpayer voluntarily discloses the committed offense,
• and simultaneously pays the owed tax along with the accrued interest.

This option allows taxpayers to avoid monetary penalties, as long as they act in a timely and proper manner.

Most common tax misdemeanors

A taxpayer may commit a misdemeanor if they:

• fail to submit a tax return as prescribed by law,
• fail to calculate and pay tax within the legally prescribed deadline,
• fail to pay tax determined by a decision of the Tax Administration,
• fail to submit an informative tax return,
• fail to file a return electronically when required,
• provide incorrect information in a tax return,
• fail to enter their TIN (Tax Identification Number) in the designated field of the return or other document,
• submit an incomplete return, an unsigned return, a return with incorrect data that is not corrected within the prescribed period, or submit it without the required supporting documentation.

How to voluntarily disclose a committed tax offense?

Voluntary disclosure of a tax misdemeanor may be submitted:

• Electronically, in the designated field provided in the electronic form (if such option exists),
• In paper form, when electronic submission is not possible – in which case the taxpayer notifies the competent authority in free form, referring to the relevant article of the law.

It is important that the taxpayer includes all relevant information in the notice sent to the Tax Administration — including any available evidence and explanations for the act or omission — to enable the authority to properly assess and act upon the disclosure.