On 23 June 2017, the Commissioner of Taxation issued a notice on how to implement the procedure for settling overdue taxes, the main provisions of which are set out below.
Applications should be submitted within 3 months from the date the law enters into force, which is the 3rd of July 2017 except in cases where the tax liability is assessed after the 3rd of July 2017, whereby the application should be submitted within 3 months from the date on which the tax becomes due.
This regulation relates to the following tax liabilities:
a. All taxes due for the years up to and including 2015 which at the date of the application have been assessed by the Tax Department and appear as payable, irrespective of the way in which they were settled either by agreement with the Tax Department or pursuant to a court order.
b. Amounts which become payable as a result of the submission of a self-assessment in respect of tax years up to and including 2015 where the tax returns for the relevant tax year have already been submitted, but no tax payment was made.
c. Tax liabilities which are assessed after 3 July 2017 by the Commissioner of Taxation and relate to tax years up to and including 2015. In this case, an application for regulation must be made within 3 months from the date on which the tax becomes due.
Relief of interest and penalties will be given on the overdue taxes depending on the number of instalments with a maximum of 60, as per the table below:
|Monthly instalments||% of relief|
|1 (full settlement)||95%|
|2 - 8||90%|
|9 - 15||85%|
|16 - 21||80%|
|22 - 28||75%|
|29 - 35||70%|
|36 - 42||65%|
|43 - 49||60%|
|50 - 56||55%|
|57 - 60||50%|
For overdue taxes which are regulated under the provisions of this law, no additional charges will accrue.
A settlement scheme is terminated in cases where the taxpayer:
* Fails to file tax returns and VAT returns during the settlement scheme, or
* Fails to settle a liability that relates to a period after the 31st December 2015, or
* Delays to pay any 3 instalments, or
* Delays to pay an instalment for more than 3 consecutive months, including the month the instalment was due.
We are at your disposal to discuss with you the above developments and to assess how these may impact your business.