New penalty for failure to file tax return

With the publication of the Law no. 207/2015 (Lege 2017/2015) profoundly amended the Tax Procedure Code effective January 1, 2016.

Among the many new features, which we will give more detail about, we highlight a particularly significant one. A penalty for failure to file a tax return was introduced for the first time ever, consequently also enucleating the concept of failure to file returns.

The penalty is 0.08% daily with respect to the principal tax liability not declared or misreported by the taxpayer. The new penalty is in addition to existing penalties and interest for late payment of the tax.

As of Jan. 1, 2016, these will be reduced for interest from 0.03% to 0.02% while for penalties from 0.02% to 0.01% per day of delay. Penalties for local taxes will also be reduced from 2% to 1%.

Finally, we specify that the penalty for failure to file may be reduced by 75% if the unreported taxes are paid on time or increased by 100% for failure to pay the principal tax liability.

We remain available for clarification.